• The company sent payment firms cease-and-desist letters last week
• Loss of PIN debit use leaves pot buyers with fewer options; curbing profits and stifling growth for businesses 

The latest in a series of setbacks for the cannabis industry, MasterCard has sent out Cease and Desist letters to payment firms that connect to their debit card network. 

MasterCard isn’t the only payment processor to back away from the cannabis market. Nationwide card networks are reluctant to allow marijuana transactions because the drug remains federally illegal, despite being legalized in many states. 

In a newly released statement, MasterCard addressed the legal challenges, and the direct tie they had to their decision. 

"As we were made aware of this matter, we quickly investigated it," a Mastercard spokesperson said Wednesday. "In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connect them to Mastercard to terminate the activity."

• The statement continues, "The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems." (source) 

Adult-use medical marijuana is currently legal in 38 states, with 23 states allowing recreational use. Cannabis use remains illegal at the federal level.

Painful Second Wave

This announcement comes as a painful second wave after the legal barriers put in place for cashless ATMs for cannabis, grocery, gas stations and convenience stores. 

Dispensaries frequently struggle to understand which payment solutions and processing companies are legal. Consultants on compliance in the US cannabis industry said the shutdowns were already causing tumult for clients.

“My phones are ringing off the hook — people are asking for payment alternatives,” said Peter Su, director of specialty banking at Hanover Bank. Su has run cannabis banking programs and consulted on payment solutions in the industry. Calls started coming in last week and have intensified this week, Su said. (source)

What does this mean for businesses that rely on a variety of payment forms to maintain profit margins?

The crackdown means cannabis consumers will have fewer convenient ways to buy marijuana without cash. Glory is on the front line of cash automation and cash handling with solutions that are specifically geared for Cannabis companies. From front end self-checkout options that accept cash payments, to back-end solutions that simplify and automate cash handling and recognition, now it’s more important than ever to ensure you have an ease-of-use process for cash payments.