Third party payment processors are said to be feeling the heat from the federal government. The reason? It’s all about accepting credit cards for the purchase of medical marijuana. If the government has its way, this relatively new sector will soon be a cash-only business in the state of California.
Medical Clinic Transactions
A San Francisco area blog, “The Snitch”, recently published a story outlining the proposal. It calls for merchant service providers – also known as “payment processors” – to refuse any transactions originating from medical clinics that sell medical pot. Now it appears these processors have complied. As of July 1, these clinics are no longer able to accept credit cards.
It’s interesting to note that there is no specific federal agency owning up to drawling the line in the sand; however, there are more than a few insiders who say it’s coming from the Treasury Department. Worse, they’re saying the agency has issued an ultimatum: either stop processing credit card transactions for these clinics or be dropped from credit card networks, including Visa and MasterCard, indefinitely.
Now, some folks who rely on medical marijuana say regardless of who’s making the demands, they’re being put in a tough position of having to carry cash – and sometimes in large amounts – if they wish to purchase what’s been legally prescribed. The author of the article said,
A medical marijuana customer is now a guaranteed cash-carrying target for petty criminals.
There are already efforts being made on a national level. Not only that, but more raids are beginning to occur at those clinics considered “high profile”. Those opposed to the law say this will make it harder to keep track of how much marijuana is being sold and some say it will make it easy to resell on the streets.
In October of last year, a California appeals court struck down a permit system used by the city of Long Beach to better control distributors of pot. For those who say folks are being paranoid, they need only look at Nevada’s efforts to deem the entire sector unconstitutional.
At a minimum, opponents say they want lawmakers to better clarify how medical marijuana can be purchased and used. Like California, there’s a growing trend of law enforcement agencies raiding various businesses. And there’s also a growing focus on payment methods these facilities are being allowed to accept.
As local and state lawsuits continue in both states, it’s not clear if these suits will address the new guidelines about not accepting credit cards. What many do agree on, however, is the need for the lawsuits to stay on the state level versus seeing the Supreme Court make these kinds of decisions. As Assemblyman Paul Aizley said,
The people in Nevada have voted to legalize the use. We need to set up a system in those states that allow the selling of medical marijuana to have adequate systems, just as there are with other legal prescription cards.
That, say supporters is exactly why credit cards should be a payment option.
If you can pick up synthetic pain killers at a pharmacy with your credit card, then those clinics that offer legal pot should be able to offer that convenience to their own patients.
In 1996, California voters legalized the selling of pot for legitimate health benefits. Patients are issued marijuana cards by their physicians, which they then present to the clinics for fulfillment of the prescription.
For now, the government has the upper hand as more residents in California transition from their credit cards to cold hard cash.
- FTC Warns of Prepaid Card Scams – May 23, 2013