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American Express Nixes Purchase of Medical Marijuana

  1. Terrapinzflyer
    Starting April 30th, consumers using their American Express cards to buy 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 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.

    While legal marijuana may be used for illegal purposes, a lot of sick patients need the drug. Many would argue that American Express’ move is an audacious one, wondering how the company can overrule a practice that 15 states have made legal.

    Visa, Discover and MasterCard have not established similar policies. Only time will tell if the companies will follow suit, leaving medical marijuana dispensaries as cash and check only enterprises.

    Ilana Greene
    May 22, 20



  1. kailey_elise
    Um, they are a private business & can decide that they don't want their cards to be accepted at certain establishments.

    Discover cards, for instance, *STILL* cannot be accepted for payment at many sex/porno stores (including a certain well-known chain); they have decided they don't want their card associated with those kinds of business & as stupid as it is, they have that right.

    And so does AMEX. Maybe they have some concern because it's still illegal at the Federal level. At least AMEX not letting MM dispensaries use their card makes a LITTLE more sense than Discover not allowing porn. :rolleyes:

  2. Alfa
    Banks are also normal businesses. What if they start to refuse their services or close accounts, like they are doing for Dutch coffeeshops?
    Without such payment services its difficult for businesses. Though I presume that most peple prefer to pay cash anyway?
  3. Terrapinzflyer
    Indeed- the same thing is happening with medical marijuana dispensaries in the US- largely as the result of Federal pressure.

    There is a fine line between the rights of a business and discrimination. While refusing sex related purchases may be a "Choice"- depending on how evenly it is applied, refusing medical marijuana while covering other prescription drugs, not to mention alcohol and tobacco smacks of discrimination.
  4. Alfa
    Without banks, credit cards and other financial means companies will have to resort to using cash. Large quantities of cash always attracts crime. And crime results in the condemning by the people and a political call for action against such shady businesses.
  5. CaptainTripps
    I am sorry but I think it is totally reasonable for American Express to reject the use of their cards to buy medical marijuana. It is totally different than other prescription drugs, other prescription drugs are legal under federal law. To say that medical marijuana is legal in 15 states is a misstatement. It is legal under state law in 15 states, it is not legal in any state. Federal law applies in every state and trumps state law.

    I would say that it is the policy of nearly all credit companies to not allow their services for illegal actions. For them to allow payment for medical marijuana would be discrimination. They would be deciding that the sale of illegal medical marijuana was different from other illegal transactions. What I think is amazing is that other credit card companies actually are allowing their services.

    I think at some prior time there might have been some confusion about the legality of medical marijuana with mixed signals from the feds, but I think the mixed signals are pretty much gone. It is pretty clear the feds are opposed to commercial medical marijuana operations. It is not much of a stretch to say that by providing payment to medical marijuana dispensaries that the credit card company is participating in a federal crime. They are also making money doing it. While no executives are likely to face charges, a corporation can be charged with a crime. The fines involved could be quite large, especially if there are thousands of counts. The management of American Express has a duty to it's share holders to protect their financial interest. These businesses also have to have various permits, licenses etc to operate, which could also be revoked.

    I see advertisements all the time that say "void where prohibited", or not valid in such and such a place. Following the law is the standard, not making exceptions to them. Paying for medical marijuana would be an exception.

    I also think it is interesting they have not given a reason. If they were to say that they were not going to do it because they disagree with medical marijuana on "moral" grounds, then I could see the argument that this "move is an audacious one, wondering how the company can overrule a practice that 15 states have made legal' But until they do make a statement like that, I personally am going to give them the benefit of the doubt, that they are simply acting in a responsible business manner.

    The real answer to all of this it to move for federal legislation to allow the states to have their own marijuana laws, medical or otherwise. The feds should allow for local control and only involve themselves in interstate matters or when help is requested by the states.

    Do I think patients who are prescribed medical marijuana should have a right to have their medication. Of course I do. But wishing don't make it so.

  6. veritas.socal
    while swim no longer frequents dispensaries, there are few that accept credit cards, although many have an atm.
    however it is something swim may try in a day or two, just to see if they would decline swim, as he would bitch about it.(to amex)
    it could be a decision based on skewed morality, misinformation(many people BELIEVE the bullshit about herb) or pressure from certain quarters(not quarters of OG kush, either, lol)
    its not fair, but life aint fair, and the only thing that is fair is the fair...and that price aint fair....they reserve the right to refuse service to anyone, even if they have perfect credit(doubt they would)
    if swim was a loanshark, he wouldnt loan $ to people to buy crack or smack or meth. maybee amex executives think cannabis is an addictive drug that will cause peoples spending to spiral out of control in the depravity of their addiction
  7. kailey_elise
    As I said, I don't think it's a 'moral' issue at all, but a legal one; allowing their card to be used to purchase medical cannabis, they are condoning & actively engaging/profiting from illegal activity (at the Federal level). I can certainly see the Feds being dicks & charging them with 'profiting from crime' or however they officially word it.

    If I owned a huge business like AMEX, I certainly wouldn't want to take that risk.

    Discover Card's not wanting to be associated with porn, however, *IS* a moral issue & should be complained about by anyone who holds a Discover card, IMNSHO. ;)

    I brought up Discover to make the point that any private business *DOES* have the right to refuse service for any (or no) reason at all (although I think it does have to be across the board; Discover Card, for instance, can't just say 'we don't want Amazing Video to be able to accept our card', but they can say 'we don't want any adult video store to be able to accept our card').

    Do I think it's 'fair'? Well, maybe - I don't really have an opinion on that part yet. Do I think it's a smart move? In general, no - why deprive the people who want to give you money the ability to do so? ;) But in the case of the transaction being something that is/is for something that is illegal, I totally think it's within their rights as a corporation to protect their assets.

  8. Alfa
    I think that companies have no right to that at all. It is the same as the cable company interfering with what TV you watch. Whether you watch church tv or porn does not affect their business. Nor are they affiliating themselves with the program.
    They offer a service and they have no business whatsoever controlling how you can or can not act.
    In the Netherlands credit card companies will not allow legal companies like coffeeshops, headshops and many other legal businesses to accept credit cards.

    Yes, I do think that you have a good point there. But this can be dealt with. Credit card companies can make sure that they provide service under approval and guarantee of the state.
  9. Terrapinzflyer
    coincidentally today a couple of heavyweight congress critters introduced a bill to bar just this sort of discrimination (and provide protection to financial institutions from the federal government).

    see: Three pro-marijuana bills introduced in Congress today

    I have been trying, and failing, to come up with an analogous situation in the US. Traditionally federal law outright trumps state law, but while at least one supreme court decision upheld the feds right to prosecute medical marijuana- there have been numerous supreme court rulings (as well as tacit approval by refusing to hear cases) upholding state medical marijuana laws.

    The closest analogy I can think of is DOMA, the defense of marriage act (1996?) that defined marriage in the US as between man/woman and left individuals, banks, insurance companies, hospitals, employers, etc in limbo of how to deal with rights in states that had legalized gay marriage.
  10. CaptainTripps
    US Constitution, Article IV, Section 1: "Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof."

    The DOMA is really more about full faith and credit, rather than federal supremacy. It is about jurisdictions respecting the legal decisions of other jurisdictions. This provides for an orderly way of doing things. A state can set the age for getting a drivers license at 18, but it will honor the drivers license of a 16 year old from a neighboring state. Marriage is another area where certainty is important. Children should not become "illegitimate" simply because their parents move from one state to another. People s preexisting property rights should not change just because they cross state lines. Suppose you were a lender and were loaning money to a married man, knowing that the wife would also be responsible for the debt. They move to another state, husband loses job, wife wins lottery and the lender can not collect the debt because the couple do not meet the legal standard for being married in the new state. This would be a mess. So for marriage the general rule is a marriage valid where celebrated is valid everywhere. Of course like any other constitutional principle, a government can refuse to honor the standard if they can show a compelling state interest. While a state can not refuse to recognize the legal marriage of a 16 year old from another state, when they move to the new state where the legal age is 18, they could refuse to recognize the marriage of a 6 year old. The same would hold true of the marriage between a brother and a sister

    The question is would a state have a compelling interest in not recognizing a gay marriage. If it could not be shown that the a state did have such an interest, they would have to recognize the marriage. Rather than let the courts decide this congress is trying to decide this issue by saying states do have a valid interest in preserving traditional marriage The federal government would also have an interest as marriage has certain financial consequences to the government.

    An interesting full faith and credit situation would be if states were allowed to have their own medical marijuana laws. So an AIDS sufferer in California who is legally prescribed marijuana goes on vacation to another states that does not allow for medical marijuana. An argument could be made that the prohibitionist state would have to honor the out of state prescription. But they certainly would be under no obligation to fill it.

    The medical marijuana issue is about federal supremacy. I think you will find that federal law almost always will prevail. I think that if the courts do decide in favor of medical marijuana it will be based on the right of the individual not to be deprived of their medicine, not on the basis of states rights. The answer to this problem is not with the courts, but rather with congress. It was great today reading that they are looking at important reform. I would like to thank Terrapinzflyer for consistently providing important information regarding legal issues in this area.
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