Have You Ever Wondered Why Dispensaries and Marijuana Doctors in Florida cannot accept Credit cards?
Even though some states have legalized marijuana in the US, Marijuana dealers have, however, encountered stiff challenges; one of this is the fact that marijuana doctors in Florida and other parts of the US do not accept credit cards.
This has posed a significant barrier to individuals and dealers who now have to carry lots of cash around them to exchange this product.
The big question that every consumer ask is, why a drug that generates over $9 billion in the US still faces restrictions in terms of payment with credit cards. Below are three critical factors that have contributed to this ugly development
- Everyone Dreads the Federal Legislation to state legislation
Federal legislation, no doubt, is the most significant setback to the acceptance of credit card by marijuana doctors in Florida. Although most states have lifted their bans against marijuana, the federal law is still against the sale of this drug.
As a result of this, most businesses, industries, and sectors in the U.S chose to comply with the federal laws irrespective of what measures or regulations the states have put in place. Marijuana is still a schedule I substance alongside with heroine (this has caused a recent debate amongst the public).
During the Obama administration, the former U.S president affirmed his interest in relaxing the strict provisions against the sale and production of marijuana. However, in January 2019, when William Barr, in his memo, stated that he would not probe businesses protected during the Obama administration, but can no longer guarantee such shelter or protection. It sent a signal to the marijuana industries, and marijuana doctors are not an exception.
- Who will be the first to test the waters? Definitely Not my Bank!
Here is another problem most marijuana doctors in Florida encounter with the sale of medical marijuana. Perhaps the banking sector is aware of the high volume of money the cannabis business generates. However, none is willing to be the first to test the tides. These banks have decided to abide by the federal laws and avoid any consequences that will result in providing cash services to marijuana doctors and dispensaries.
No bank is willing to take such risk irrespective of the enormous returns the marijuana industry Promises. They will get implicated because such payments have to go through the banking network before the dealer can receive the money from the customer that uses the bank services. In such a case, the payment is traced to the bank, not the consumer, and the bank has to pay for any sanctions that result from this.
Aside from the fact that that the sale of marijuana is legal in Florida, just very few private banks have shown interest to work with licensed marijuana doctors and dispensaries in the state. Currently, these banks are hoping that the Safe Banking Act of 2019 (SBA) gets to become a bill soonest.
The SBA is a bill which is now in review at the federal legislative arm of the U.S government, and it aims to shelter financial institutions which offer services to legally approved marijuana businesses and companies in the states.
- Marijuana doctors in Florida cannot access card networks
The biggest card networks such as Visa, MasterCard have reaffirmed their stand that they will continue to operate based on the regulative of the federal government. Therefore, any individual that tries to use these cards to make any transaction involving marijuana gets an automatic ban from using their services. American Express also have followed this route.
No one wants to appear in the radar of the government. Moreover, some card networks enable customers and dispensaries to exchange payment for marijuana sale, but these companies have made their operation secret to avoid public and government attention.
Therefore, the operation of marijuana business can only see the public limelight when the U.S government, just like Canada reviews its laws and policies regarding the growth, sale, and purchase of this drug. Until this happens, marijuana doctors in Florida will continually exchange these products by cash, because no bank or card network will be willing to provide their services to these dispensaries.
Why Marijuana Doctors And Dispensary Do Not Accept Credit Cards
Marijuana is legal in much of the states, but it remains illegal under Federal Law, which has hindered doctors and dispensaries’ access to card processing options. The vast majority of medical marijuana dispensaries, apparently all of them in Florida, do not take credit cards or debit payments.
In this blog post, we shall be looking at some reasons doctors and dispensaries cannot accept credit cards as payment option.
Medical marijuana is a cash-only business, which customers might find inconvenient. A complex web of business practices and Federal banking laws blocked doctors and dispensaries from accessing the same convenient financial services that most other ventures take for granted.
According to survey carried out by numerous experts, the major credit card providers do not allow their customers to use their cards for marijuana purchases. The customers do not even have a purchasing code for such purposes, and they will shut down any account that violates their policy.
Another reason doctors and dispensaries do not accept credit card as a means of payment is that, card networks have distanced themselves from the marijuana market.
Also, transactions in Florida involving the purchase of marijuana are not allowed on the Visa network. A MasterCard representative said they are monitoring the situation, and they are seeking guidance from regulators to inform customers of any developments.
Many banks and credit card companies are reluctant to do business with marijuana doctors and dispensaries, since marijuana sales are still illegal and marijuana use is against Federal law in Florida and other states in the country.
He further said that, states banks would have been willing to work with medical marijuana businesses, but because of issues with doctors and dispensaries making large daily cash deposits, which are automatically flagged, and their money smell like marijuana which makes banks reject them.
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Why Marijuana Doctors and Dispensary Can Not Accept Credit Cards
Marijuana dispensaries are growing all across the united states. It is popularly grown for its recreational and medical use. In fact, states have a legalized recreational marijuana altogether. However, even with its accessibility growing, people still struggle with proper payment methods.
Many marijuana doctors, dispensaries, and retail points still operate on a cash-only policy. This is something that is hard to believe in the 21st century. A retail shop not having a cashless option can be inconvenient and discourages sales.
From the consumer point of view, it can be a hassle to pay for large sums in all cash only. Not a lot of people travel with cash, and they prefer paying with debit and credit cards. This, however, is a convenience that is not found at marijuana dispensaries.
Why is a debit/credit card not accepted?
The simple answer is- banking policies. Bank policies state that cards cannot be used for marijuana purchases. Credit card merchants also threaten to shut down the accounts of those who do have any activity purchasing Cannabis products. In simpler words, they should be no records of a person purchasing a marijuana product or having a marijuana ‘trail.’
Financial institutions get sanctioned if they provide services to cannabis and marijuana businesses. The company can be successful and legitimate, but the system just does not work in their favor. Surprisingly, supporting these institutions is beneficial for banks themselves. This money can be used in investments all across the country. However, these institutions must abide by the non-marijuana policy set in place. The marijuana industry is considered ‘volatile.’ Banking systems keep their investments away from such industry regardless of the inconvenience their customers might face. Another reason most marijuana doctors or retail points don’t accept cards is due to the delay in the transfer of money. With such industries, the money is not directly transferred to the merchant from the customer’s checking account. The merchant has to be fronted by their bank, and the money is then requested from the customer’s bank.
This process is not only complicated, but it also pulls out all the ‘convenience’ a simple credit card provides a person. The delay can also mean that a merchant does not get their money at all due to many reasons. It provides no financial security to the retailer or marijuana doctors and is too big of a risk for it to be an option.
Are there ways around the cash-only policy?
Yes, there are many ways around the no cash policy. Columbia care retailers have introduced their own card service that can come in handy for their regular retailers. Some merchants go for electronic wallet apps that can be useful to transfer money on the spot.
On-spot ATMs, however, deem to be one of the most effective methods of purchase. It is convenient to both the merchants and their customers. It can dispense cash when needed and however much is needed. Although it will still slightly be a hassle for customers, it is better than having no proper system in place.