i’m from an illegal state, so i go to a dispensary and i pay with my debit card and they handed me some cash back. why is that?
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Technically marijuana is still illegal in California since the law which make it illegal is a federal law. But there is no federal police to enforce growing and trading marijuana, only the smuggling. It is up to the state police to enforce these laws. And in California and many other states they have stopped enforcing this law. So it is still technically illegal, there is just no police to catch you.
But debit card processors do not want to be implicated in any criminal activity. There is a small chance that if things change the FBI could arrest a payment processor for helping organizing illegal drug trading. So payment processors want as little as possible to do with dispensaries.
I do not know the details of how things work which allow you to even pay with a debit card. But I would suspect that the dispensary is working more like an ATM. That way you are not paying for drugs with your debit card, you are just withdrawing cash and using this cash to pay for the drugs.
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