Cannabis Payment Processor’s Closure May Boost Hemp Industry
- The industry of selling marijuana, CBD, and hemp-related products faces challenges due to payment processing issues, largely stemming from marijuana being classified as a Schedule 1 controlled substance, making banks and credit card companies reluctant to work with these businesses. This issue has been highlighted with the recent closure of a major local processor, FP Omni Technologie, which previously serviced hundreds of businesses and over a thousand merchants.
- Joe Salome, co-owner of The Georgia Hemp Company, has experienced these challenges firsthand, with Citi Bank and Truist ending their relationships with his company. He was able to find a solution through Square processing, which allowed him to process credit cards. Salome, like many others in the industry, is calling for a better set of rules at the federal level to provide them with more financial options.
- The 2018 Farm Bill removed hemp from the list of Schedule 1 drugs, which has cleared a financial path that marijuana businesses do not have. As a result, the less-regulated hemp industry can potentially benefit from these challenges facing marijuana businesses, as customers searching for THC products may turn to hemp offerings instead. However, Salome believes that without regulation, there’s a risk of customers resorting to the black market for these products.
Sandy Springs, GA Cannabis Companies Face Payment Processing Issues
Marijuana, CBD, and hemp businesses are struggling with payment processing, a problem exacerbated by the recent closure of a major local processor. As marijuana is a Schedule 1 drug, banks and credit card companies are often reluctant to serve this industry, even in states where marijuana is legal.
Impact on Local Businesses and Solutions
“Citi Bank closed us, and Truist asked us to leave as well,” shared Joe Salome, co-owner of The Georgia Hemp Company. He revealed that finding payment solutions was challenging, although Square processing stepped in to help with credit card transactions.
Legit Payment Processing is Highly Sought After
The 2018 Farm Bill declassified hemp from Schedule 1 drugs, providing financial avenues for hemp businesses. Demand for legitimate payment processors is high, making the announcement by half-billion-dollar company FP Omni Technologie to cease processing services for hundreds of businesses a significant blow.
New Payment Methods and Industry Impact
Affected businesses had to explore alternative payment methods like cash, Zelle, or Cash App. However, getting companies to transact with cannabis businesses remains a hurdle, leading customers searching for THC products to the less-regulated hemp industry, which could potentially benefit from the situation. “Yes, this could absolutely help us,” Salome said.
Need for Federal Regulation
The alternative, Salome warned, is customers resorting to the black market. While the current situation is advantageous for The Georgia Hemp Company, Salome asserted the importance of federal regulations to provide the industry with more financial choices. “We like regulation,” he said.
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