Over 70% of New Jersey Towns Outlawed Adult-Use Cannabis Retail Sales
by Bethan Rose
If you ask just about any cannabis or CBD business owner what the biggest thorn in their side is regarding conducting business, the most common answer you will receive is banking or finance-related. Even though the cannabis industry is one of the most highly regulated industries, and hemp-derived CBD has been federally legalized, businesses operating in these legal industries still do not have normal access to banking and transaction processing. Many cannabis-facing businesses have absolutely no access to banking and have to operate as cash-only entities.
Despite countless bills being introduced within legislation at the federal level including a significant one that we have reported on several times known as the SAFE Banking Act, there has been no significant progress in this arena for several years and it seems that every day we are hearing stories about another company being shut down by their payment processor. One of the payment processing companies that you hear about commonly in these stories is PayPal.
I myself as a business owner in the cannabis sector have faced issues with PayPal despite my company only providing writing services and not physically selling a plant-derived product. Luckily we have been able to work past the issues we have seen but still choose not to utilize their platform due to the stigma they still enforce surrounding cannabis and the businesses operating in its legal sectors.
I had the opportunity to reach out to several individuals who own cannabis or CBD businesses who have had issues with PayPal. All of the stories that I encountered echoed the same thing, PayPal is not friendly to cannabis businesses. The following statement is taken directly from PayPal’s Acceptable Use Policy and is the only statement that would relate to cannabis or CBD-related transactions.
You may not use the PayPal service for activities that:
While in some states cannabis is still considered a drug, at the federal level it remains categorized as a Schedule 1 substance. Meanwhile, in over 30 states it has been recognized as a medicine, and across the entire US CBD has been legalized.
To get an idea of just how bad the problem is, here are just a few of the quotes that I received from business owners willing to open up about their issues conducting business with PayPal despite operating state legal compliant businesses within the cannabis sector. In total, I received over a hundred responses all of which echoed one another in so many detrimental ways.
“PayPal closed my personal account and held over $900 dollars for 6 months because I make CBD-infused bath bombs. I used this account for buying fabric and other fun items, but because I also had a business account they blocked my entire household from ever having a PayPal account. Even if they change their rules, I’ll never use them again for how they treat those in the CBD world.”- Alison Warlitner Founder of Cherry River CBD
“I own a CBD brand in Austin, Texas called Restart CBD, and before we opened up our retail in 2018, we were just operating at farmers markets here and there doing pop-up events and as such decided to use PayPal. After a few months we were shut down from our business account, and in addition to that PayPal shut down every person in my immediate family’s personal account due to us being associated with the business (we’re a family-run shop). Now a few years later and I’ve been kicked off of Venmo (which is owned by PayPal), Stripe, Wave Payments, and I don’t even process cannabis business on those accounts. I simply wanted to leverage them as a blogger and marketing consultant but because my personal account has been flagged, it’s been extremely challenging taking advantage of these small business payment solutions. And I sell a federally legal product!”- Shayda Torabi Founder of Restart CBD
“I lost my PayPal account due to using it on my e-commerce business selling hemp flower and CBD. Thank goodness I only had one sale not transferred that week!! The week before would have been in the thousands!” – Dawn Gordon
“PayPal shut down our account and froze $650. They never gave it back. When pushed for the money, they threatened to sue us for damages for going against their policies, which would be several thousand dollars, and that they were “doing us a favor” for only taking the $650.” – Catherine Smith
“My PayPal account was deactivated over a year ago, out of the blue with no explanation. My business, Cait Curley Media, entails education, advocacy, entertainment, and content creation around cannabis/hemp and sustainable materials. All of my transactions were influencer marketing-related. Brands would pay me to create content for them or promote their business through my social channels. I wasn’t touching the plant directly. Luckily all of my funds had been transferred out of my PayPal account at the time of deactivation as I have heard horror stories from others in the industry about their money being held for months on end. The deactivation definitely added an obstacle to my payment processing and I have lost several potential clients due to it. It’s not rare to have a company tell me PayPal is their only payment option, which means our partnership is a no-go. The lack of clarity and guidelines on behalf of PayPal is sickening; they are hurting people and businesses that are only doing great things for our planet.” Cait Curley
As you can see, PayPal has not only caused major issues for these businesses in their everyday dealings but also within many of these business owners’ personal lives.
It is time that these stories start to paint a different picture. Cannabis isn’t going anywhere, nor are these businesses. Luckily, many of them have been able to move on to other processors with success. The damage that’s been done, however, will never be reconciled. It is absolutely senseless that any of these amazing individuals had to encounter these issues or this type of treatment for running 100% compliant and state-legal businesses.
Note: Veriheal does not support illegally consuming therapeutic substances like cannabis and psilocybin but acknowledges that it transpires because of the current illicit status of both, which we strive to change by advocating for research, legal access, and responsible consumption. Always consult a physician before attempting alternative therapies. Cannabis and psilocybin have both been used…
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