As if you didn’t already have enough to worry about, given the oft-changing regulations and procedures, public misconceptions and – the biggie – complicated and confusing legal issues tied to medical marijuana.
Now, you have to deal with a new headache on the customer payment side of the equation.
American Express reportedly no longer allows transactions from medical marijuana dispensaries, according to this segment by The Young Turks online news report as well as this story in the Medical Marijuana Business Report confirming the move.
There are valid arguments on both sides of the debate.
But the move likely won’t have a huge direct impact, as many dispensaries opt not to accept Amex payments anyway given the relatively high fees the company charges on each transaction conducted with the card. In fact, a fair share of medical marijuana centers only accept cash.
Still, it’s a very worrisome sign for the industry. It’s never good when a major company in effect refuses to do business with your industry, and it gives more ammo to the side questioning the legitimacy of the medical marijuana business.
The list of large financial firms that are shunning the sector is ballooning.
From the MMBR article: “The denial of American Express credit card services to medical marijuana customers comes amid ongoing banking issues in the sector. National banks have ceased taking marijuana businesses, and merchant processing services have also refused to provide credit card readers and access to their networks to dispensary operators.”
The real fear is that other credit card firms, banks and financial companies will follow suit, which would make it difficult if not impossible to run a profitable business.
There’s no indication that this will happen – Visa, MasterCard and Discover still process such payments, and you can find a willing bank with a little work. But dispensary owners will obviously want to keep a close eye on developments related to this topic, as the landscape could change quickly.