You may have noticed that cannabis dispensaries don’t accept credit cards. With few exceptions, most dispensaries don’t accept debit cards, either. That’s because the major credit card companies (Visa, MasterCard, and American Express) from directly processing all cannabis-related transactions using their cards. strictly prohibit businesses Online payment processors like PayPal, Shopify, and Stripe also refuse to allow their services to be used to pay for cannabis products. To stay in business, dispensaries and online CBD retailers are starting to accept cryptocurrency payments. Aside from cash and checks, it’s the only option left on the table. CBD isn’t psychoactive, so what’s the problem? CBD is derived from the cannabis plant, but it’s derived from hemp, not marijuana. Although people use the words cannabis and marijuana interchangeably, they’re not the same. Cannabis is the species of plant, while marijuana and hemp are two different varieties of cannabis. Unlike the marijuana plant, hemp naturally contains extremely low levels of THC. CBD products like gummies and oils that contain no more than 0.3% THC are federally legal, which makes the situation all the more frustrating. It’s all about avoiding liability The reason payment processing companies won’t process cannabis payments stems from the potential for liability. While it’s true that the , there’s no regulation that forces manufacturers to comply with the requirements. There are stiff penalties for manufacturers producing products with high levels of THC, but the CBD industry is largely unregulated. 2018 Farm Bill made hemp-derived CBD legal With the CBD industry being unregulated, credit card companies and online payment processors might end up named in a lawsuit if they process payments for illegal products. The other problem is that marijuana is only legal at the state level in certain states. It’s not federally legal. Since marijuana and CBD are often sold in the same store, payment processors don’t want to risk processing payments for a controlled substance. The problem with accepting cryptocurrency payments On the surface, cryptocurrency seems like a great option for CBD businesses. It’s anonymous, for starters. Cryptocurrency is widely popular and easier than ever to obtain. However, there’s a dark side to accepting cryptocurrency that makes running a CBD business even more  complicated and expensive: cryptocurrency taxes. Accepting cryptos like Bitcoin is easy, but it comes at a price. , not just as business income but as a capital gain. This increases the cost of doing business and makes record-keeping extremely tedious. Cryptocurrency transactions are taxable The IRS doesn’t consider cryptocurrency money. According to the IRS, Bitcoin and other , and transactions are subject to the same tax regulations as other investments. cryptocurrencies are classified as property investments Cryptocurrency taxes push some companies to only accept cash If a CBD business holds any amount of cryptocurrency and that particular crypto increases in value during that time, they owe capital gains taxes. There is a way to avoid this legally, but it costs more money. When accepting cryptocurrency as payment, the only way to avoid the capital gains tax is to convert it to fiat currency instantly. This process requires yet another service with another fee, adding to the total cost of doing business. However, this process helps businesses avoid paying capital gains taxes on top of business income taxes. The tedium required to accept Bitcoin and other cryptocurrencies, along with the taxes, pushes many CBD companies to run cash-only businesses. For those who operate entirely online, there are payment processors willing to work with high-risk industries, but again, those services are costly. Despite difficulties, CBD business owners are committed Thousands of people rely on CBD for , pain, stress, and insomnia. Business owners know this and are committed to providing access to their products. relief from anxiety Since the industry is unregulated, many businesses get away with of their products. Reputable companies  take on the expense of lab testing each batch to ensure quality and potency. making false claims about the CBD content For example, Hemp Bombs lab tests every batch of every product made, including their , and makes those results available to the public. CBD gummies Other companies are also starting to provide lab reports for each batch of consumable CBD, like Pure Kana. However, companies selling CBD-infused topical products rarely offer lab results. For example, Just CBD body lotion seems to be a popular item, but there isn’t a lab report to confirm the amount of CBD in the product. What does the future hold for CBD companies? Are CBD companies stuck with paying additional fees for relying solely on cryptocurrency for payments? Maybe not. Although PayPal won’t accept payments for CBD products, they are one of 20 companies . The SAFE Banking Act would make it legal for the bank to  work with licensed cannabis clients and avoid federal prosecution. As it stands, cannabis companies can’t get business loans, open business bank accounts, or generate credit. This legislation would change everything, and with PayPal on board, it would provide much-needed relief to the CBD industry. supporting the SAFE Banking Act

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