http://www.forbes.com/sites/jonmatonis/2012/09/29/credit-card-processors-discriminate-against-medical-marijuana/Even the seemingly transaction-neutral bitcoin processor, U.S.-based BitPay, has refused to enter the fray. As a processor, BitPay offers same-day conversion of merchant bitcoin into a US dollar bank account. CEO Tony Gallippi explained in an interview that although several have applied, “medical marijuana is not allowed in our terms of service.” Of course to be consistent, other merchant types not allowed by BitPay include ecstasy, MDMA, any controlled substances, weapons, gambling, and sports betting. They will however support transactions for file sharing, storage/backup services, and VPN services, because “freedom of information is important.”
Fortunately, for individuals and merchants around the globe, a third-party processor is not required in order to accept bitcoin.
I can see Bitpay's position on this. It would put a giant target on their forehead for the drug warriors that want to keep their high paying Federal jobs. It would also add yet another stigma to "legit" Bitcoin businesses.
That being said, have any West Coasters used bitcoin to pay for their mmj?