It’s Time for Card Brands to Allow Cannabis Payments
The card brand’s prohibition on processing cannabis payments has led many businesses to find workarounds that mask otherwise legal transactions with the intention of confusing payment networks, processors, and acquiring and issuing banks. Not only does this restrict law enforcement’s ability to crack down on illegal operators and curtail the illicit market, it also causes confusion and additional costs to consumers. This forces licensed businesses conducting legal transactions to operate in the shadows of payment processing in a largely cash-based system, creating security risks, operational inefficiencies, and regulatory challenges.
Let licensed operators have a path for transparent, underwritten, and appropriately coded transactions.
Other forms of traditional payments such as wires, ACH, and checks are clearing and being processed on national systems at staggering volumes. Offering card payment services to licensed cannabis businesses not only addresses their immediate financial needs but also fosters an environment of transparency and accountability. This approach aligns with the values of modern commerce and demonstrates a commitment to supporting all legal enterprises.
As evidence of this, hundreds of national, regional, and community banks and credit unions across the country are providing financial services to licensed cannabis businesses. They are operating within the guidelines offered by the FinCEN and passing their regulatory exams.
Allow cardholders to purchase products and services that are legal where they live.
Consumers want the ease and convenience that card payments provide when purchasing cannabis products. By prohibiting this method of payment, the card brands are effectively telling their customers that they cannot use their own money to buy products that are legal where they live. Shouldn’t the well-marketed card brand slogan, "everywhere you want it to be,” apply to these customers too?
We believe it is within the power of the leading card brands to further catalyze change.
We understand that serving this industry requires careful consideration. That said, we know the card brands are adept at serving other high-risk industries, for example, online gambling.
Concerns about regulatory compliance, reputational risk, and financial prudence are valid. However, by working in collaboration with industry experts, legal advisors, and policymakers, the card brands can develop solutions that mitigate these concerns while maximizing the positive impact of their services. There are major sponsor banks with sizeable cannabis banking portfolios that will assume the risk of underwriting cannabis payments for licensed businesses today, and others will certainly follow.
Join industry leaders committed to improving access to financial services in the legal cannabis industry and creating safer communities and a more inclusive and equitable economy for all.
However, a significant hurdle obstructs the cannabis industry’s path to full legitimacy: The lack of access to debit and credit card payments.
As advocates for progress, fairness, and the empowerment of the legal cannabis industry, this open letter is a clarion call for the nation’s leading card brands – Mastercard, Visa, Discover, American Express, and others – to reverse their policies of prohibiting financial institutions to offer payments services connected to their networks to licensed cannabis merchants.
The legal cannabis industry has experienced significant transformation in the last decade. Today, 23 states have legalized adult-use cannabis, with 38 states and the District of Columbia allowing the medical use of cannabis products. There is also a steady rise in public support for cannabis legalization, with 68% of adults saying marijuana should be legal.
Meanwhile, the legal cannabis industry is booming, providing jobs, tax revenue, and entrepreneurial opportunities in communities around the country. According to some estimates, the U.S. cannabis industry could reach $71 billion in legal cannabis sales in 2030.
