Monday, July 9, 2012

UPDATE — Approval Denied: Treasury Department Cuts Credit and Debit Card Use at Local Dispensaries

By David Downs
Mon, Jul 9, 2012 at 10:45 AM

Turns out Visa isn't everywhere you'd want them to be. This week, San Francisco dispensary Vapor Room announced that it must stop accepting Visa and MasterCard credit and debit payments at their Haight St. location. Vapor Room customers will have to go cash-only, joining hundreds of thousands of other patients nationwide, as the U.S. Department of the Treasury pressures credit/debit card servicers and banks to close legal medical marijuana business accounts.

Vapor Room's management wrote on the club's Facebook page Sunday:

“Dear VRC members - due to increasing Federal pressure, Visa and MasterCard are now refusing to accept your credit card charges for your medicine at many Bay Area dispensaries. Unfortunately, they will not let MCD's process your charges any longer. We are working diligently to address this issue quickly. In the meantime, Discover card still works and their are ATM's in the area."

Though medical marijuana is legal in seventeen states and Washington D.C., the federal government is paid to treat it as an illegal, Schedule 1 drug, officially more dangerous than heroin. According to interviews with bank officials and merchant service providers, the Department of the Treasury has been quietly reminding banks and merchant processors that they risk losing everything if they are even accused of facilitating what they consider to be drug trafficking. Most banks and merchant processors have cut ties to known marijuana businesses.

Medical marijuana dispensaries going cash-only decreases safety and convenience
  • David Downs
  • Medical marijuana dispensaries going cash-only decreases safety and convenience

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By doing so, the federal government is actually decreasing public safety, advocates note. Forcing clubs to go cash-only creates large amounts of cash, which any police officer will tell you invites patient and dispensary robberies, and makes bookkeeping harder to verify.

For example, compare the regulated, orderly finances of Wells Fargo customer Berkeley Patients Group to tales of Southern California's unregulated clubs, where garages are stuffed with cash.

Aaron Smith, executive director of the National Cannabis Industry Association, says the Treasury Department can't ignore federal law. However, Smith told MMJ Business Daily, “The Treasury Department in our estimation has the ability to change regulations without an act of Congress,” Smith said. “It doesn’t make any sense regardless of what your position is on medical marijuana to force these businesses into a cash-only situation.”

Other Bay Area clubs are still accepting plastic, while many now have an ATM in the lobby. The pool of merchant service providers, however continues to quickly dry up. Feel free to report back to us in the comments as to which dispensaries are still taking cards, which type of cards, as well as their delivery payment options.

UPDATE: Harborside Health Center in Oakland has stopped taking credit and debit transactions, SF Weekly reports.

The Green Door in SF still takes debit.

SPARC SF no longer accepts credit or debit, but they have an ATM on site and will refund the ATM fee.

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