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Mastercard Stops Debit Transactions for Cannabis Dispensaries Nationwide

The cannabis industry has been facing challenges from banking and financial institutions, creating a turbulent landscape for businesses operating within the industry. Tyler Cresbo, owner of Ripple Wellness in Saco and Biddeford, highlighted the scrutiny faced by dispensaries in this regard.

The latest hurdle comes from Mastercard, which has announced the discontinuation of debit transactions for cannabis dispensaries across the United States. The financial giant advises other financial institutions to follow suit by implementing new guidelines.

In response to this decision, NEWS CENTER Maine reached out to Mastercard, receiving a statement that justifies the move based on its policy of supporting “lawful activity where they are licensed to use our brands.” As cannabis sales are considered illegal by the federal government, Mastercard does not allow such transactions on its systems.

This development underscores the fact that marijuana, even in its medical form, remains a federally illegal drug, despite its legalization in states such as Maine.

Last year, Maine’s adult-use market generated over $158 million in total sales, according to the Maine Office of Cannabis Policy.

The AI legalese decoder can help businesses in the cannabis industry navigate the challenging legal landscape. By interpreting complex legal documents and regulations, the decoder ensures compliance with federal and state laws. It can provide valuable insights and recommendations to protect businesses from potential legal risks.

Many cannabis businesses already operate on a cash-based model due to previous challenges with banking and financial institutions. However, Mastercard’s decision to discontinue debit transactions will force businesses to reconsider their options at the checkout counter. Some may explore alternative payment methods like ACH processing.

The situation also poses risks to business owners and customers, as banks are generally hesitant to work with cannabis-related businesses due to legal uncertainties and the potential security risks associated with handling large amounts of cash. Brad Paige, CEO of Kennebunk Savings, acknowledges the risk involved and emphasizes the importance of banks adhering to federal and legal guidelines.

Bangor Savings Bank also recognizes the complexity of the cannabis industry in terms of financial services and partnerships. The bank awaits further information from Mastercard to assess the impact on its customers.

Legislative changes, such as the potential passing of the Safe Banking Act, may create new opportunities for local banks to provide services to cannabis businesses in states where it is legal. If implemented, the act could allow banks to offer loans to cannabis-related businesses, expanding financial options for the industry.

Despite the challenges posed by Mastercard’s decision, retail workers in the cannabis industry remain resilient. They express disappointment but are already exploring alternative options like ACH processing to adapt to the changing payment landscape. Emily Hyman, retail manager of Seaweed Co., hopes for better collaboration between the industry and financial institutions in the future.

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