COLUMBUS, Ohio — When Ohio residents first legally purchased recreational marijuana in the state last week, some customers were turned away because they presented credit cards and did not have cash on hand.
There were ATMs in the pharmacies for people who didn’t have enough cash on them. However, some customers left the stores empty-handed – either because they didn’t have enough cash in their account or because they didn’t want to pay the ATM fees.
This is a learning curve that Ohioans have been through since recreational marijuana sales began – that they need money to buy a little.
Cash – and debit cards in some pharmacies – are the only accepted forms of payment at pharmacies. Visa, Mastercard and other credit cards are not accepted. Marijuana remains illegal under federal law, so out-of-state banks cannot secure transactions at pharmacies.
READ MORE: “It’s electrifying”: Long lines outside local pharmacies on the first day of recreational marijuana sales
Many buyers – marijuana for recreational use is only available to people aged 21 and over – are also preparing for price shock in the first few days of sales.
Prices on IHeartJane.com and WeedMaps.com, websites where many dispensaries upload their menus, showed on Monday that the price of an ounce of flower in the Cleveland area rose from around $300 to $540. Prices have been rising since last Thursday, when they ranged between $290 and $420 per ounce.
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The price increase shows that demand for the product is robust.
When Ohio had a medical-only program on July 22, the average price for an ounce of flower was $222.40, according to state data.
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The higher list price also means that customers have to bring more cash to the pharmacy.
The Ohio General Assembly created “safe harbor” provisions for financial institutions in 2016 when it legalized medical marijuana. It allowed banks, credit unions, savings banks and other institutions to do business with marijuana growers, processors, testing labs and dispensaries. The law stated that as long as the financial institutions complied with state banking and tax laws, they could do business with licensed medical businesses without violating state drug trafficking laws.
The marijuana industry wanted the option of having payroll and other transactions secured by banks. Cash payments would have exposed the industry to the risk of criminal activity.
However, marijuana is still illegal at the federal level, although about half the country has taken steps toward legalization at the state level.
The Biden administration is in the process of reclassifying marijuana from a Schedule I substance – meaning it has a high level of abuse alongside drugs like heroin and peyote – to a Schedule III substance, which sits alongside codeine, ketamine and other substances the federal government considers to be less dangerous.
However, this change does not mean that plastic cards will be accepted as a form of payment in the future. The American Bankers Association told the Associated Press in May that the drugs themselves are illegal in the United States as Schedule III substances.
“A potential government decision to reclassify cannabis has no bearing on the legal issues surrounding cannabis banking,” said Blair Bernstein, a spokesman for the association. “Cannabis would still be illegal under federal law, and that is a line that many banks in this country will not cross.” Laura Hancock covers state government and politics for The Plain Dealer and cleveland.com.
