Remember those old Visa commercials used to highlight places where they “don’t take American Express.” Well for legal medical marijuana dispensaries, it looks like a reversal: American Express won’t take them.
As of late April, paitents using their American Express cards topurchase medical marijuana received notice that their cards were declined. The rejection of the cards is due to American Express’ decision to no longer allow purchases of such medicinal products with their cards. American Express made this move despite the fact that the purchase of medical marijuana is legal in 15 states.
So far, American Express has given no reason for the new rule, leaving medical marijuana dispensaries and their customers guessing at possible causes. One theory is that the card issuer has received complaints from companies about their employees using their American Express cards to purchase medical marijuana. American Express may also have received a high number of fraudulent or unauthorized charges from medical marijuana dispensaries due to people using forged or stolen cards to obtain pot.
Many may argue that American Express’ move is an overly arbritary and caprious one, wondering how the company can overrule a practice that 15 states have made legal. Visa, Discover and MasterCard have not (yet) established similar policies. Only time will tell if the companies will follow suit, leaving medical marijuana dispensaries as cash and check only enterprises.
In the meantime there may be hope on the horizon for the disenfranchised credit card holders.
“I haven’t seen it (the prohibition) with other credit cards,” said Aaron Smith, executive director of the National Cannabis Industry Association.
“I don’t understand why they would turn their back on a $2 billion industry. It’s perplexing.” Colorado Rep. Jared Polis has said he will introduce legislation that makes it clear that banks can maintain normal business relationships with legal medical marijuana businesses without fear that they are in violation of any federal laws. His office said the bill will be introduced soon–possibly this week.