One of the most recognizable card brands in the world, Mastercard Inc., recently joined the crusade against the cannabis industry, ordering its partners to “terminate the activity” with debit cards touching marijuana-related business.
But some large players in the retail cannabis scene remain blunt in their stance, essentially saying, “We’re still accepting cards.”
“There was an announcement, but not a whole lot of action,” said Kyle Kazan, co-founder and chief executive of Long Beach-based Glass House Brands Inc.
Kazan said he is unfazed by Mastercard’s statement, and his 10 retail outlets, including The Pottery dispensary located in Brentwood, will continue using bank cards.
Glass House Brands joins several Los Angeles chains, including Erba Inc. and Sweet Flower IP Holdings LLC, openly allowing debit – and in some cases credit – cards despite warnings from card networks.
Stores have used handheld ATMs for years, allowing staff to round up transactions to the nearest $10 and give back a purchase’s difference in cash. When customers see their bank accounts later, the purchase will show up as a withdrawal.
According to Kazan, it’s the larger cannabis retailers’ strong relationships with major financial institutions that allow these kinds of payments to continue.
“It’s the smaller players that banks don’t want to take the risk of money-laundering regulations from the feds,” Kazan said. “But big companies like mine, we bank with large banks.”
Dance with risk
Premium cannabis dispensaries across Los Angeles now imitate the high-end designer storefronts that define the city’s upscale shopping districts. Clean concrete exteriors with sans-serif signs lead into spaces displaying marijuana strains as if they were works of art.
The industry’s transition to luxurious, photogenic storefronts from its back-alley entrances of steel doors signified companies vying for legitimacy with a consumer base.
While the Field of