Customers still have to use cash to buy marijuana at dispensaries because the plant remains illegal in the eyes of the federal government. That means that banks are reluctant to extend marijuana businesses financial services that would make it easier to use credit cards and other forms of payment.

It’s a situation that has caused plenty of headaches for the cannabis industry. Lawmakers at the state and federal levels have proposed solutions, but none have yet to pass. This could change in the near future, but right now it’s best to play it safe and plan to use cash to buy marijuana at a dispensary.

Why Can’t I Use a Credit Card at a Dispensary?

Processing a credit card means interacting with the bank or financial institution that issued the card. Under federal law, conducting a financial transaction with a marijuana dispensary is illegal for a bank to do.

Since the 1970s federal law has listed marijuana as a Schedule I illegal drug, on par with drugs such as cocaine and heroin. There’s a long history around marijuana laws, as well as social justice issues around communities impacted by the War on Drugs. But a dispensary owner can’t do anything about federal law, so they can only accept payments with which they can work.

Credit card companies remain detached from the cannabis industry because of federal law. They offer no merchant code that recreational or medical marijuana dispensaries could use for a transaction.

Can I Use a Debit Card at a Dispensary?

Most people think of debit cards and checks as financial instruments that stand-in for cash, but technically they operate much the same as a credit card. A financial institution has to issue the card or the check. Some dispensaries have found workarounds and will accept debit cards, essentially mimicking an ATM cash withdrawal. Others have partnered with companies that allow them to take cards rather than just cash. But don’t go in expecting this to be the case.

Are There ATMs at Dispensaries?

Many dispensaries will place an ATM on the premises because so many people remain unaware that a customer cannot simply put a dispensary purchase on a credit card. That makes it much easier – you don’t have to walk around with a lot of cash – but expect to pay a fee on the withdrawal as you would at any non-bank ATM machine.

It’s all a terrible inconvenience for the customer and the dispensary, alike. One reason you will find security at most dispensaries is because of the threat of theft because they operate as a cash-only businesses. Until the U.S. Congress works out a way to at least decriminalize marijuana and allow banks to extend financial services, using cash to buy marijuana at dispensaries will remain an issue for both retail store owners and customers.