Text messaging provider Twilio cuts service to cannabis industry

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Twilio, one of the nation’s largest communications-service providers for retailers, is prohibiting cannabis companies from using its software to reach customers, MJBizDaily has confirmed.

The publicly traded San Francisco company provides a communications platform and software that helps companies talk to their customers via text, voice and video.

A company spokesperson told MJBizDaily the sale or promotion of cannabis via Twilio’s platform violates “long-standing” policies put in place to comply with federal law.

However, according to the company’s list of restricted-use cases, marijuana, CBD and accessory-products companies are prohibited from utilizing its SMS or MMS text messaging in the United States or Canada, “regardless of the federal or state legality.”

Other banned categories include:

  • High risk financial services, such as cryptocurrency.
  • Debt collection or forgiveness.
  • Gambling.
  • Sex, firearms and tobacco.

“If we discover a customer is violating the law or another provision of our policies, we take the action necessary to stop the activity, up to and including account suspension,” spokesperson Caitlin Epstein said via email.

“This approach applies not only to cannabis but any other violations of federal law.”

Twilio did not disclose when the policy took effect or its previous business dealings with marijuana operators, though it indicated more than a year it was joining the likes of T-Mobile and AT&T in banning such services, according to the Washington DC-based National Cannabis Industry Association.

In a blog post last year, the NCIA described Twilio as a huge SMS platform used by some major players in the industry for such services as delivery, marketing and loyalty points.

Twilio’s position highlights another roadblock for cannabis companies, particularly retailers, in their efforts to partner with industry leaders because of the federal prohibition of marijuana possession and sales.

In July, Mastercard issued a hard-line demand that banks and payment processors immediately halt marijuana transactions involving its debit card, fueling a scramble for retailers to find payment processors and other solutions for handling more cash in-store.

In the wake of the Mastercard decision, retailers told MJBizDaily they’re improving in-store communication with customers and the overall shopping experience as well as reassessing internal processes.

Many are concerned that global financial giant Visa will follow suit, further strengthening competition from the illicit market while putting their increasingly cash-heavy operations even more at risk to crime rings targeting cannabis retail locations.

Burglaries involving cannabis stores last year doubled from 2021 in California, the world’s largest marijuana marketplace.

Given Twilio’s size and market position, the company might have found it easier to cut ties with the industry rather than risk regulatory scrutiny.

The company topped $1 billion in sales in the June quarter and has a market cap of nearly $11 billion.