Access to consistent financial services has proven challenging in the cannabis industry, even when it comes to recently legalized, hemp-derived CBD products.
This includes everything from acquiring a basic bank account to processing customers’ payments. And while some companies, like PayPal, are participating in the movement to help CBD businesses gain access to mainstream financial services, others are throwing more roadblocks in their way. Thankfully, it looks like Square is of the former group as they announce a new program allowing them to work with certain CBD companies.
According to a spokesperson for the company, “Square is currently conducting an invite-only beta for some CBD products.” Their reason for this is because, “Square closely watches evolving public policies and strives to create new opportunities for clients.”
This couldn’t have come at a better time since many companies are scrambling to find new payment options after Evalon announced they would no longer be processing Visa payments at the end of this month. Evalon was a subsidiary of U.S. bank and one of the most popular card processors in the industry.
However, Square provides a variety of financial services at a low cost to help businesses thrive. They started with a small magstripe CC reader that could be plugged into a smartphone or tablet and expanded from there. Now, they offer a wide range of payment solutions for both e-commerce and brick and mortar businesses, as well as point of sale equipment, payroll software and more.
All this comes right on the heels of the congressional committee approval of the SAFE Banking Act. The Secure and Fair Enforcement Banking Act would allow all major financial institutions to do business with the hemp/CBD industry.
Last week, Rep. Andy Barr (R-KY) pressed federal financial regulators about the issue. “I’ve had constituent businesses tell me that their access to financial products, specifically card services, have actually deteriorated since we descheduled industrial hemp in the Farm Bill,” he said. “This obviously conflicts with congressional intent.”
In April, Senate Majority Leader Mitch McConnell (R-KY) and Sen. Ron Wyden (D-OR) wrote a series of letters to various federal agencies pushing for new guidance about banking access for hemp businesses. The due is responsible for pushing hemp’s legalization through the Farm Bill,
“While some financial institutions have agreed to offer financial products to the growing hemp industry, many of them have not due to confusion over the legal status of hemp,” wrote the bipartisan pair. “However, as hemp is no longer a controlled substance, financial institutions should feel secure in engaging with this industry.”
Morgan Fox, media relations director for the National Cannabis Industry Association, praised Square for taking the plunge. “Forward-thinking companies are stepping in to fill the gap created by outdated federal banking policies, and helping address the problems caused by a lack of financial services in the cannabis industry,” he said. “Lawmakers should take heed and open this space to all financial institutions.”
We couldn’t agree more Mr. Fox.