Can Credit Cards Pay for Marijuana?

Can Credit Cards Pay for Marijuana?

January 23, 2014         Written By Bill Hardekopf

Can credit cards be used to pay for pot?

This question may have been farfetched years ago, but the legalization of recreational marijuana in Colorado and Washington has made it a prevalent issue in the world of cannabis distribution.

Unfortunately, the answer to an otherwise simple question is a little vague at the moment. Banks don’t know how to react.

The government has said that it will not prosecute states that have legalized marijuana, but technically, weed is still illegal at the federal level. Since banks are guided by federal law, they are obligated to abide by the regulations of the country, not just the state they operate in.

Rob Rowe, a vice president in the American Bankers Association’s Center for Regulatory Compliance, told USA Today, “No matter what way you approach it, the banks are still subject to requirements under federal law. Most banks we’ve talked to have come to the conclusion that there’s too much risk for offering services to these dispensaries.”

Some marijuana dispensaries do allow for credit card payments, but most industry experts assume those dispensaries were not forthcoming about their operations when they signed up for credit card processing. These groups may also hide the type of transaction a customer has with their business as a way of masking the truth behind their sales. Since banks are so leery about dealing with these types of operations, marijuana providers are having to sneak around to operate like traditional businesses.

If more states continue legalizing marijuana, credit card companies may be in greater support of the practice. For now though, banks maintain their loyalty to federal–not state–laws.

The information contained within this article was accurate as of January 23, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Bill Hardekopf

Bill Hardekopf is the CEO of and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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