CannaBeat is a curated biweekly selection of top news stories impacting business, research, and culture in the cannabis industry, crafted by Emerge Law Group.
Emerge’s Hot Take
Don’t Let People Buy Pot with Debit Cards, Mastercard Tells Banks
After issuing a series of cease-and-desist letters to retailers last week, Mastercard has instructed banks to stop honoring payments made to cannabis merchants through Mastercard debit services. Because cannabis is still illegal under federal law, large banks and credit card companies have historically restricted cannabis purchases via credit card. Some merchants, however, were until recently able to work around these restrictions via cashless ATM and PIN debit options. Echoing instructions issued to banks by Visa in 2021, Mastercard maintains that any cannabis purchase made utilizing a credit card, whether credit or debit, is not allowed in their systems. Cannabis retailers have long battled these restrictions, pointing to the elevated risk of operating entirely cash businesses (cannabis revenue is estimated at $30 billion this year, with the vast majority generated through cash transactions). Cash-only cannabis dispensaries have long been a target of robberies, with many states reporting escalations in such incidents. In the same week as Mastercard’s mandate, a Senate chairman announced that an important piece of related cannabis banking legislation, the Secure and Fair Enforcement (SAFE) Banking Act, will be tabled until the fall session.
Attorney Alex Berger commented: “More disappointing news from one of the world’s biggest payment processors. Does Mastercard honestly believe that the feds are going to go after it merely for allowing its customers to debit funds from their own bank accounts to pay for state-legal cannabis purchases? Especially considering that the federal government has not gone after actual cannabis producers, processors, retailers, etc.? Or, for that matter, any responsible financial institutions which do bank with cannabis companies? Though the real disappointment here, not surprisingly, lies with Congress. With the stroke of a pen Congress could open up safe banking to the legal cannabis industry, which would make it a much safer space in which to conduct business. Safety should be a non-partisan no-brainer.”
For more information, see also (Forbes) “Mastercard Cracks Down on Marijuana Transactions on its Debit Cards.”
Other Noteworthy News
Senate Committee Chairman Says Marijuana Banking Bill Actually Won’t Get A Vote This Summer, Despite His Goal, Lobbyist Reports
“A key Senate chairman says that a bipartisan marijuana banking bill will ‘not’ get a committee markup next week, according to an advocate who spoke with him. And that means it will not be addressed during the summer session as leadership had hoped. Lobbyist Don Murphy of the Marijuana Leadership Campaign said on Thursday that he spoke to Senate Banking Committee Chairman Sherrod Brown (D-OH), who told him that his panel will not be voting on the Secure and Fair Enforcement (SAFE) Banking Act before the start of recess beginning on July 31. Murphy told Marijuana Moment that he posed the question to Brown as the senator was leaving a hearing on Thursday, jokingly asking whether he should make vacation plans early or if SAFE Banking would be receiving a markup next week before lawmakers leave town for the summer. After the end of this month, the Senate isn’t scheduled to return until September 5. The news comes as a disappointment for advocates and stakeholders, who were previously encouraged when Senate Majority Leader Chuck Schumer (D-NY) included the cannabis legislation in a list of legislative priorities for the summer session, even while he acknowledged that it would be challenging.”
Cannabis Brand Cookies Sued by Another Investor Group
“A Cookies spokesperson declined to comment to MJBizDaily, although in a court filing Friday the company’s president rejected ‘many’ of the new lawsuit’s allegations. These latest claims – filed along with a request for a judge’s intervention in company business on Thursday in Los Angeles County Superior Court – mirror separate allegations against Cookies made in two other legal matters filed earlier this year. In those matters, one of which was settled and another that’s still pending, other Cookies partners and investors also claimed that company executives, including CEO and public face Gilbert Milam Jr., better known as Berner, diverted Cookies investor cash into personally owned side companies. But this case goes further. The investors, Wilder Ramsey and Tom Linovitz of Red Tech Holdings and Gron Ventures Fund, claim Cookies ‘burned through cash and ran out of money’ after ‘wildly missing its numbers’ last summer and failing to support a $275 million valuation, according to Thursday’s filings. This year, as lawsuits piled up, Cookies spent ‘most’ of a separate $23 million raised this spring with Dallas-based Entourage Effect Capital, and is currently trying to raise even more money, according to the investors.”
New Congressional Amendments Would End Marijuana Tests for Federal Job Applicants and Encourage Psychedelic Research
“New marijuana and psychedelics amendments have been filed by bipartisan congressional lawmakers as part of large-scale spending bills—including proposals that would end the practice of drug testing job applicants at certain federal agencies for marijuana. Rep. Robert Garcia (D-CA) introduced two versions of the same cannabis measure for separate appropriations bills, one covering Military Construction, Veterans Affairs and Related Agencies (MilCon/VA) and another on Agriculture, Rural Development, Food and Drug Administration and Related Agencies. It would prevent the use of funds to drug test most applicants for cannabis at the agencies covered by the legislation. There’s also an amendment to the MilCon/VA bill from Reps. Jack Bergman (R-MI) and Lou Correa (D-CA) that’s meant to encourage the U.S. Department of Veterans Affairs (VA) to carry out ‘large-scale studies’ into drugs like psilocybin and MDMA that have been designated as ‘breakthrough therapies’ by the Food and Drug Administration (FDA). The sponsors are also the founding co-chairs of a congressional psychedelics caucus that promotes research into entheogenic substances.”
Photographer Sues Over Unapproved Use of Tupac Photo on Cannabis Website
“A US photographer has sued online cannabis marketplace Leafly for allegedly using a photo he took of Tupac on its website without permission. According to a lawsuit filed with the courts in New York last week, the Leafly site used T Eric Monroe’s Tupac image alongside some copy about blunts, i.e. hollowed out cigars filled with cannabis. ‘Defendants [… ] have willfully copied, reproduced, and distributed the subject photography for financial benefit,’ the lawsuit states, ‘by, without limitation, reproducing the subject photography online for commercial benefit, including without limitation at leafly.com, which is owned and operated by Leafly, on a page airing a news report containing Monroe’s subject photography.’”
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CannaBeat by Emerge Law Group
CannaBeat is a weekly brief on news, business, and culture in the cannabis industry curated by members of Emerge Law Group's distinguished Cannabis Industry Group.