In a potential blow to cannabis smokers around the country, Mastercard has instructed banks that use its branded products as debit cards to bar their use at pot dispensaries because, the company claims, it violates federal law.
The BBC reports the credit card company sent notices to banks to cut off dispensaries that accept debit cards from running transactions. Marijuana is legal to some degree in 40 states, but the federal government still considers it a banned drug, so transactions cannot use the federal banking system. Most states get around this by limiting cannabis transactions to cash.
“As we were made aware of this matter, we quickly investigated it. In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connects them to Mastercard to terminate the activity,” Mastercard said in a statement on Wednesday. “The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems.”