{"id":20974,"date":"2026-01-06T05:31:05","date_gmt":"2026-01-06T11:31:05","guid":{"rendered":"https:\/\/reformingretail.com\/?p=20974"},"modified":"2026-01-06T05:31:06","modified_gmt":"2026-01-06T11:31:06","slug":"how-and-when-consumers-will-be-able-to-buy-cannabis-with-payment-cards","status":"publish","type":"post","link":"https:\/\/reformingretail.com\/index.php\/2026\/01\/06\/how-and-when-consumers-will-be-able-to-buy-cannabis-with-payment-cards\/","title":{"rendered":"How And When Consumers Will Be Able to Buy Cannabis with Payment Cards"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Investors in Dutchie have <a href=\"https:\/\/reformingretail.com\/index.php\/2024\/01\/30\/dutchie-raises-100m-at-400m-valuation-an-89-discount-from-last-valuation\/\">really taken a bath<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The thesis, like that of Toast, was to verticalize an industry and then squeeze infinite payments margin out of merchants by owning the software stack.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And it&#8217;s a great thesis: cannabis, like other &#8220;<a href=\"https:\/\/reformingretail.com\/index.php\/2024\/01\/16\/how-high-risk-labeling-means-payments-companies-leave-easy-money-on-the-table\/\">high risk<\/a>&#8221; verticals, will have durable acquiring margins for a very long time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Note that &#8220;high risk&#8221; is mostly a fabrication so the financial system can reap more margin on the backs of merchants that they arbitrarily deem morally reprehensible. For example, imagine a women&#8217;s swimming store being flagged as &#8220;high risk&#8221; because the financial institution was muslim and didn&#8217;t like the idea of women showing skin.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unfortunately for Dutchie&#8217;s backers, legalized cannabis is only marginally closer than when they first piled in their capital. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even with Trump&#8217;s latest Executive Order (EO).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you were betting on cannabis payments to earn your payday, this is how we would think about.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">First, you need to cannabis to <em>actually<\/em> be rescheduled. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Despite the DOJ proposal to reschedule cannabis to Schedule III in <a href=\"https:\/\/crsreports.congress.gov\/product\/pdf\/LSB\/LSB11227#:~:text=On%20May%2021%2C%202024%2C%20the,legal%20consequences%20of%20rescheduling%20marijuana.\">May of 2024<\/a>, it&#8217;s slow going. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Yes, <a href=\"https:\/\/www.bbc.com\/news\/articles\/cp8z684r6vlo\">Trump signed an EO<\/a> asking the US Attorney General to look into moving cannabis to a Schedule III drug, but who knows how long that will take.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is our best understanding of that process as of now:<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"582\" height=\"419\" src=\"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-7.42.25-AM.png?resize=582%2C419&#038;ssl=1\" alt=\"\" class=\"wp-image-27182\" srcset=\"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-7.42.25-AM.png?w=582&amp;ssl=1 582w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-7.42.25-AM.png?resize=300%2C216&amp;ssl=1 300w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-7.42.25-AM.png?resize=370%2C266&amp;ssl=1 370w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-7.42.25-AM.png?resize=270%2C194&amp;ssl=1 270w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-7.42.25-AM.png?resize=570%2C410&amp;ssl=1 570w\" sizes=\"auto, (max-width: 582px) 100vw, 582px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Not sure if the proposed rulemaking and public comments from 2024 will be accepted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Then there&#8217;s the very real roadblock the pro-prohibition groups will have with their litigation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That could add <em>years<\/em> to the approval process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And even if cannabis were rescheduled, it would take even more <em>years<\/em> before you could use cards to buy cannabis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">How do we feel confident in this claim?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>First, because it took the card duopolies over two years to jump onboard the online gaming bandwagon AFTER it was legalized. <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the US, the ability to use credit cards for online gambling has fluctuated due to federal restrictions and varying state laws.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Federal Restrictions (2006\u20132011):<\/strong> The <strong>Unlawful Internet Gambling Enforcement Act (UIGEA)<\/strong> of 2006 prohibited banks and credit card companies from processing payments for &#8220;unlawful&#8221; online gambling. This effectively blocked legal credit card use for online wagering across the U.S. for several years.<\/li>\n\n\n\n<li><strong>Legalization Shift (2011):<\/strong> A 2011 Department of Justice opinion on the <strong>Wire Act<\/strong> paved the way for states to regulate online gambling within their borders.<\/li>\n\n\n\n<li><strong>Initial Consumer Use (2013\u2013Present):<\/strong> Regulated online gambling began in states like <strong>Nevada, Delaware, and New Jersey<\/strong> in 2013. In these early legal markets, consumers could theoretically use credit cards immediately, as licensed operators were exempt from UIGEA restrictions.<\/li>\n\n\n\n<li><strong>Modern Restrictions and Bans:<\/strong> Even where online gambling is legal, use is not universal:\n<ul class=\"wp-block-list\">\n<li><strong>State Bans:<\/strong> At least eight states, including <strong>Massachusetts, Iowa, Tennessee, and Illinois<\/strong>, have explicitly banned the use of credit cards to fund online betting accounts.<\/li>\n\n\n\n<li><strong>Bank Policies:<\/strong> Many major financial institutions (e.g., Bank of America) continue to decline gambling-related transactions regardless of local legality.<\/li>\n\n\n\n<li><strong>Operator Policy Changes:<\/strong> Some major platforms, like <strong>DraftKings<\/strong>, stopped accepting credit cards entirely in the U.S. in August 2025 to help customers avoid high interest rates and cash advance fees.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Second, rescheduling cannabis on the CSA (Controlled Substances Act (21 U.S.C. \u00a7\u00a7 801 et seq.; CSA)) only affects MEDICAL uses cases. <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means it&#8217;s an FDA issue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That&#8217;s because unless there&#8217;s an exception, cannabis and its derivatives are still legally classified as marijuana.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Regardless of a substance\u2019s status under the CSA, if a substance is included in consumer products such as food or drugs, the product containing the substance must <strong>also comply with the Federal Food, Drug, and Cosmetic Act<\/strong> (21 U.S.C. \u00a7\u00a7 301 et seq.; FD&amp;C Act) in order to be legally distributed in U.S. commerce under federal law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The exception would be non-tobacco-based inhalable products, which would require a totally different framework since they fall outside the purview of the FDA, and the FDA has even <a href=\"https:\/\/www.fda.gov\/media\/168778\/download\">mentioned  this to Congress<\/a>.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">The CSA does <em>not<\/em> have purview to regulate recreational use.<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Garnering FDA approval for medical use is a years-long process. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From the above article:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">For the FDA to approve a new drug, the drug sponsor must submit a new drug application (NDA) with \u201csubstantial evidence\u201d that the drug is safe and effective for its proposed use. Similarly, for FDA to approve a biologic, a sponsor must submit a biologics license application (BLA) demonstrating that the product is safe, potent, and pure. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Certain chemicals related to or derived from marijuana may be considered small-molecule drugs, while other components of the cannabis plant\u2014including marijuana itself\u2014may be considered a biologic.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">But to even apply to the FDA you need DEA approval first:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">To obtain approval for a new drug or biologic, sponsors must conduct research, including clinical trials on human subjects, to generate the required evidence regarding the drug\u2019s safety and effectiveness. Before conducting research with marijuana, a researcher must obtain a DEA registration and an FDA authorization of an investigational new drug application (IND) containing details on how the researcher plans to conduct the study. Then, the researcher must use marijuana from a DEA-registered source.<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">For example, it took the FDA <a href=\"https:\/\/www.ncbi.nlm.nih.gov\/books\/NBK230708\/\">about two years to approve Marinol<\/a>, a drug used to treat nausea that includes as its ingredients THC, a chemical found in marijuana&#8230; but that was AFTER the sponsoring company (Unimed) submitted the NDA. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unimed spent hundreds of millions of dollars and upwards of five years (the exact time is ambiguous because the National Cancer Institute was studying cannabis in the 1970s and contributed to the research) to develop the documentation submitted to the FDA.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That would mean Marinol took ~7 years to get to market.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is not uncommon.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">FDA approval of a drug is the culmination of a long, research intensive process of drug development, which often takes WELL OVER A DECADE. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Drug development begins with discovery, that is, the synthesis and purification of a new compound with expected biological activity and therapeutic value. The next major step is the testing of the compound in animals to learn more about its safety and efficacy and to predict its utility for humans. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Those early activities are collectively referred to as the preclinical phase. When evidence from the preclinical phase suggests a promising role in humans, the manufacturer submits an Investigational New Drug (IND) application to the FDA. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The IND submission contains a plan for human clinical trials and includes the results of preclinical testing and other information. Absent FDA objection, the IND becomes effective after 30 days, allowing the manufacturer to conduct clinical testing (testing in humans), which generally involves three phases. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The three stages of clinical testing are usually the most time-consuming phases of drug development, lasting FIVE years on average. The actual time depends on the complexity of the drug, availability of patients, duration of use, difficulty of measuring clinical end points, therapeutic class, and indication (the disease or condition for which the drug has purported benefits).<\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">And even when the FDA granted approval, Marinol was unmarketable because marijuana was still Schedule I. It further took the DOJ months to <em>years<\/em> to reschedule drugs like Marinol despite their FDA approvals, at which point drugs like Marinol could be marketed and prescribed.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">We&#8217;re not sure how much acceptable human research already exists for FDA submission, and moving to Schedule III will make data gathering easier, but it means that the fastest outcome for legal, medical use is no sooner than two years away.<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Third, once cannabis garners FDA approval, consumers will be able to buy medical cannabis <em>only<\/em> with a valid prescription. At this point they could pay with their credit card\/FSA\/HSA, just how they currently buy <a href=\"https:\/\/www.drugs.com\/schedule-3-drugs.html\">Schedule III<\/a> drugs today. For reference, Tylenol-codeine and testosterone are Schedule III drugs, and you can get this pretty easily (the latter too easily) from a physician.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Fourth, assuming medical cannabis is the only legal route to acquiring cannabis at the federal level, every dispensary will offer a doc-in-the-box so you can conveniently acquire a prescription and use your credit card to check out.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Dispensaries know how costly managing cash is, and if they can push consumers to a widely accepted digital payment method they will. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s a graphic to summarize how this will unfold.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" width=\"657\" height=\"487\" src=\"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-10.27.21-AM.png?resize=657%2C487&#038;ssl=1\" alt=\"\" class=\"wp-image-27186\" srcset=\"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-10.27.21-AM.png?w=657&amp;ssl=1 657w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-10.27.21-AM.png?resize=300%2C222&amp;ssl=1 300w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-10.27.21-AM.png?resize=370%2C274&amp;ssl=1 370w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-10.27.21-AM.png?resize=270%2C200&amp;ssl=1 270w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-10.27.21-AM.png?resize=570%2C423&amp;ssl=1 570w, https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/12\/Screenshot-2025-12-30-at-10.27.21-AM.png?resize=80%2C60&amp;ssl=1 80w\" sizes=\"auto, (max-width: 657px) 100vw, 657px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Sure, there&#8217;s an infinitesimally small chance that Congress could remove marijuana from the CSA and the FDA&#8217;s purview, but it really should be positioned like this:<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<span class=\"embed-youtube\" style=\"text-align:center; display: block;\"><iframe loading=\"lazy\" class=\"youtube-player\" width=\"770\" height=\"434\" src=\"https:\/\/www.youtube.com\/embed\/cbrTKw50X6U?version=3&#038;rel=1&#038;showsearch=0&#038;showinfo=1&#038;iv_load_policy=1&#038;fs=1&#038;hl=en-US&#038;autohide=2&#038;wmode=transparent\" allowfullscreen=\"true\" style=\"border:0;\" sandbox=\"allow-scripts allow-same-origin allow-popups allow-presentation allow-popups-to-escape-sandbox\"><\/iframe><\/span>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">In summary: legal, medical marijuana is likely the fastest path to card payments for cannabis. The time it take to reach that status is ultimately a function of the Phase I-III research that exists in human trials. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the data is sufficient for immediate submission, the fastest outcome is two years away, while a timeline of 5-7 years is more realistic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Absent this path, Congress could remove marijuana from the CSA and appoint an alternative agency to handle legalization. We have to imagine the absolute fastest this happens is measured in years given the torpidity of the government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Good luck Dutchie investors: B2C cannabis card payments are still a pipe dream given your venture timescales.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Investors in Dutchie have really taken a bath. The thesis, like that of Toast, was to verticalize an industry and then squeeze infinite payments margin out of merchants by owning the software stack. And it&#8217;s a great thesis: cannabis, like other &#8220;high risk&#8221; verticals, will have durable acquiring margins for a very long time. Note [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":21067,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"image","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5,4],"tags":[],"class_list":["post-20974","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-solutions","category-merchants","post_format-post-format-image"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p81nA2-5si","jetpack_featured_media_url":"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2024\/10\/Screen-Shot-2024-10-07-at-2.15.22-PM.png?fit=650%2C495&ssl=1","_links":{"self":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/20974","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/comments?post=20974"}],"version-history":[{"count":14,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/20974\/revisions"}],"predecessor-version":[{"id":27248,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/20974\/revisions\/27248"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media\/21067"}],"wp:attachment":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media?parent=20974"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/categories?post=20974"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/tags?post=20974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}