Can You Use A Credit Card at a Dispensary?

As you may well already know, the laws and regulations surrounding the dispensaries can be difficult to sort out. Every licensed dispensary is subject to follow federal, state, and local regulations to operate the business legally. And those regulations become especially specific when it comes to what form of payment customers can provide for their purchases. There is a reason cash is still king in this industry -- but what is that reason? And will you be able to pay with a credit card at a dispensary one day? Read on to learn more about what we know and understand at this time, and what we hope the industry may look like in the future.

What Are The Laws Regulating How Dispensaries Operate?

Dispensaries are not choosing to only accept cash from customers to make their lives more difficult. There are many risks involved in running a cash-based business. And those risks only increase when you also sell dry herb and other high-priced products. Operating a cash business increases the risk of being robbed or making accounting errors. However, dispensaries are forced into the corner of only operating in cash due to federal and state regulations on the industry.

In the simplest of terms, this is because dispensaries are currently only legal on a state level. The government, therefore, does not allow federal businesses such as banks, to do business with an industry that is federally illegal still. That means that the government is telling banks and credit unions that they cannot do business with dispensaries. That makes the forms of payment that dispensaries can accept from customers more limited than most other businesses. Even though licensed recreational or medical dispensaries are operating according to state laws and local regulations, they could be violating federal laws by trying to deposit money into a federally regulated bank account. See where the confusion starts to come in?

Does Cash Rule Everything At Dispensaries?

With this sticky situation created between the conflicting approval of federal and state governments, dispensaries cannot operate like most other businesses. The ways that they can accept payments from customers are currently limited by these unclear regulations. So, dispensaries are left to accept cash as the safest form of payment, and the easiest to process as a business. This is because the current federal laws go as far as to prevent credit or debit cards from being accepted as payments at dispensaries. There are some states and dispensaries that are finding and supporting loopholes in these financial regulations though. This will not only make it easier for you to pay for your purchase at a dispensary, but also for the dispensaries to operate with a legal bank account instead of piles of cash.

Will Dispensaries Ever Accept Credit Cards?

There is hope that these financial regulations will change one day, especially with the rapid growth of the dispensary industry across the United States. You may have noticed a handful of dispensaries in your area accepting debit cards for a short period of time. However, these workarounds have not lasted for long thus far, and are technically operating in a gray area of legality. Most banks will not work with dispensaries, let alone payment processors. There is still a lot of risk involved, despite there also being a decent amount of potential profit. Accepting credit or debit card payments is made incredibly difficult by the federal government at this time, so most dispensaries don’t even bother with it. Better be safe and legal than sorry and shut down.

Hope for New Regulations and Opportunity

There is hope that one day new regulations will be passed that will allow dispensaries to operate like most other businesses in the United States, with access to federal banking systems and all. One of the most popular alternative payment systems that is happening, are payments collected with a point of banking system. As a customer, you can use your debit card to authorize a cash withdrawal from your account as a form of payment for your purchase. The rest is handled electronically, and on paper, it looks like a cash transaction on the dispensary’s books. However, these systems are still not offered everywhere and can be risky for large retailers or payment processors to take on still. There is more hope in the future of using cryptocurrency as payments at dispensaries, but we hope that the federal regulations will catch up to the growth of the industry soon instead. For now, though, it is best to come prepared to the dispensary with a handful of cash and your ID ready to make a purchase and even have it delivered to your door step.


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