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Cannabis Payments

Legal Status: Processing Credit Cards at Cannabis Dispensaries

Major credit card providers have declared it is illegal to pay for cannabis with a credit card, it's not worth the risk.

Updated:
July 6, 2022
by
Legal Status: Processing Credit Cards at Cannabis Dispensaries

Introduction

Americans are familiar with making everyday purchases with their credit cards using a credit card processor.  Often, it catches the casual cannabis consumer by surprise to learn that dispensaries do not accept credit cards as a payment method and there is no thc credit card processing.

Credit Card Risk

As cannabis is federally illegal and classified as a Schedule 1 controlled substance, major credit card companies, i.e., VISA, MasterCard, and American Express, currently prohibit credit card dispensary payments.

With the cannabis industry's focus on providing sophisticated and tech-savvy consumer buying experiences, archaic cash-only requirements can be off-putting to the customer. Many Americans use credit cards programmed in their mobile phone wallets and prefer cards to cash for convenience and loyalty points.

Any payment processor that currently offers credit card payment solutions to cannabis-related businesses is not compliant with federal law and possibly subject to financial and criminal penalties. Fines, having money stuck in escrow, MID masking, and active lawsuits (including criminal proceedings) are all potential problems of using credit cards in the cannabis space.

Though accepting credit cards may sound tempting, cannabis businesses should avoid it and stick with bank transfers until federal legislation provides clarity and protection around card payment services.

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