Access to secure banking is necessary for any industry to thrive, and now one industry is looking to be on extremely shaky ground after a major credit card company moved to stop payments to the industry.
Mastercard (MA) -) has told financial institutions to stop allowing marijuana transactions on its debit cards, Reuters reported, due to the fact that cannabis is still illegal at the federal level. Twenty-three states and the District of Columbia have legalized the drug.
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"As we were made aware of this matter, we quickly investigated it. In accordance with our policies, we instructed the financial institutions that offer payment services to cannabis merchants and connects them to Mastercard to terminate the activity," a spokesperson told Reuters.
"The federal government considers cannabis sales illegal, so these purchases are not allowed on our systems."
Senate Democrats led by Chuck Schumer (NY) have been pushing the SAFE Banking Act in Congress, but the legislation that would grant the cannabis industry access to banking services has been stalled by Republican opposition.
While the Senate has been obstinate, the SAFE Banking Act passed the House of Representatives multiple times, proving that there is political appetite to make a change.
Under current rules, financial institutions that provide services to legal cannabis businesses face strict regulatory and reporting requirements.
Cannabis businesses hoping for salvation from the SAFE Banking Act will have to wait at least until the fall before the legislation is voted on again as a floor vote is not expected before Congress takes its summer recess at the end of the month.
