As if the medical marijuana industry needs another challenge.
Last week, we published an exclusive story about a move by the MMJ industry’s primary credit card processor to stop handling Visa and MasterCard transactions made at cannabis centers as of July 1. We never heard back from the main companies involved – Electronic Merchant Systems (EMS) and its partner Chesapeake Bank. But our sources in the merchant services arena say Visa and MasterCard were behind the decision to sever ties with the MMJ industry, in large part because of the federal crackdown on medical cannabis in states such as California.
Many cannabis professionals have feared this day was coming since American Express stopped processing dispensary transactions last year. Most dispensaries in the nation will be forced to conduct business solely in cash, which could make them a bigger target for crime and will certainly make it much harder to facilitate transactions. (EMS said in a letter to its agents that dispensaries can still accept Discover cards. But some experts we spoke with questioned whether that’s the case and said Discover likely will implement a similar policy against medical marijuana dispensaries in the near future if it hasn’t already.)
Dispensary owners are now scrambling to find an alternative solution. Some companies are peddling other solutions, including pre-loaded cards and other variations of debit cards as well as on-site ATMs. While valid options may exist, dispensary owners are advised to look into the details before jumping on board. Some of these new options could be questionable from a legal point of view and others might not even be worth the money.
Also last week, efforts to revive San Diego’s medical marijuana industry fell flat. We believe this is an important story because it shows what happens when an industry isn’t active enough when it comes to political activism. Organizers behind the MMJ initiative in San Diego couldn’t even get enough people to gather signatures. The measure might have stood a chance if cannabis workers and business owners (including those who had to close up shop in recent times because of the crackdown) had volunteered their time to support the cause. But, as we’ve seen in other cities and states, MMJ professionals failed to get involved politically, and it doomed their cause.
Other top stories in MMJ Business Daily last week: