CPS – Does PayPal Accept Cannabis? Answered

Eric Ives
By Eric Ives
October 16, 2019

Answered Throughout the majority of cannabis’ history in the USA, pretty much all transactions and trades were conducted using cash,…

Answered Throughout the majority of cannabis’ history in the USA, pretty much all transactions and trades were conducted using cash, usually in the form of handing money over to your dealer; after all, you couldn’t exactly use your credit card to fund an illegal purchase.

However, the growth of the cannabis industry has also seen the rise in general cannabis acceptance, as well as a relaxation of the various, formally strict laws surrounding purchasing and owning cannabis. Since it is now legal in many states in the USA to buy cannabis with no problems with the law whatsoever, you might think it obvious that there would be other methods of paying for your cannabis.

Unfortunately, there are still numerous problems surrounding our ability as consumers to actually pay for the cannabis we want – one of these problems is about the hugely popular and widely used payment network, PayPal.

So, does PayPal actually accept cannabis? Is it safe to use this platform to buy your cannabis, without risking your account being deactivated?

What is the Problem with PayPal & Cannabis?

On first thought, it would seem like there wouldn’t be a problem – why should PayPal care about you using their service to pay for cannabis?

The problem isn’t anything fundamental with the core ethos of PayPal, but rather with the clumsy, awkward position of cannabis within the US legal system.

Despite the fact that marijuana is legal in so many different states, including the state where you are probably hoping to purchase cannabis from, PayPal isn’t a business located within any particular state. Instead, it operates as an international company that needs to conform with all manner of different state laws as well as operating under federal law and, because cannabis is still formally illegal on a federal level, it puts PayPal in a very awkward position.

Although it is extremely unlikely that anyone would actually be prosecuted on a federal level for crimes relating to cannabis, if PayPal were to be seen to have allowed purchases associated with cannabis, they might be in legal trouble as well.

The repeal of the Cole Memo has only compounded this issue. This memo was something that was published during the Obama administration, by the then Deputy Attorney General, James M. Cole. Cole issued this memo which, in essence, urged all federal prosecutors and law enforcement agents not to pursue any kind of indictment of charges relating to cannabis if those possible crimes were committed in states with legal cannabis.

Essentially, Cole wanted the federal government to leave the states alone and allow them to enforce their own laws and permit their own citizens to use marijuana if they so choose.

When this was repealed in 2018 under the Trump administration, it left companies and individuals alike in a precarious position when it comes to marijuana, as they were now not sure what would happen to them if they tried to conduct cannabis-related businesses. This is why PayPal will likely ban you from using their service if they find out you used PayPal to pay for cannabis.

However, this might not always be the case, thanks in part to the efforts of PayPal and various state legislators across the USA in trying to create the SAFE Banking Act.

What is the SAFE Banking Act?

The SAFE Banking Act, known properly as the Secure and Fair Enforcement Banking Act, was introduced in 2018, originally so as to try and create some system of fairness with regard to banking regulations when the business in question is dealing with federally illegal substances, but it has quickly become known as a primarily cannabis-focused piece of legislation.

In short, the act makes it illegal for federal regulators to treat depository institutions (like PayPal) differently or punish them as a result of allowing cannabis-related business, so long as that business was conducted within a legal state.

At present, thanks to the relatively hard-line reaction to cannabis use across the USA, many federal regulators and politicians in Washington are doing whatever they can to get in the way of normalizing and legalizing the process of buying and using cannabis. As it is rather challenging to prosecute a cannabis-related crime that was performed within a legal state, (despite the repeal of the Cole Memorandum, it is still pretty hard) it is easier for federal regulators to go after institutions like PayPal so as to try and make it as difficult as possible for cannabis users to actually buy anything.

Although cannabis users across the world are used to having only ever to buy their supplies with cash, it would make it a great deal safer, more secure and more convenient if we could all use credit cards or PayPal.

The SAFE Banking Act will permanently enshrine banking institutions' safety when conducting cannabis-related business, allowing you to whip out that American Express or PayPal account when at your local dispensary.

Many people that are used to the inconvenience of constant cash use might wonder why so many people support this act, as they have never had a problem with buying with cash, so why should others?

The key value of using your bank account or something like PayPal is that it adds another layer of protection and security for your purchases. For example, if you buy something with your credit card, but it turns out to be not what it claimed to be or is somehow defective, you can then use your credit card protection to ensure you get a full refund, allowing your credit card company to fight the issue with the retailer themselves.

This is why the SAFE Banking Act is not just beneficial for PayPal, but also for us consumers as well, as it affords us the necessary protections that we all deserve and are entitled to.

However, the SAFE Banking Act is still many months, or even possibly years, away from being passed and fully recognized, so we have to make do with the legal situation as it is right now.

So, are there any steps you can take to avoid having your account terminated by PayPal, just for using their service to buy Cannabis?

What Can You Do to Make Paying for Cannabis Online Easier & Safer?

The first, most obvious thing you can do to avoid losing your PayPal account is not use their service to begin with, instead only using cash to buy cannabis. This doesn't really solve the problem of course, and is instead something that leaves you having to deal with all the inconveniences that cash imposes, while also letting those that oppose your use of cannabis win. Instead, it’s better to be a bit sneakier.

It is important to remember that, while PayPal will most likely ban you if they discover that you are using their service to purchase cannabis, they don’t really want to. The fact that they are supporting the SAFE Banking Act implies that they are especially cannabis friendly, meaning that they are more likely to look the other way if it is possible to get away with it.

This means that you simply just need to be incredibly ambiguous with your PayPal purchases when it comes to cannabis. If you are shopping at a smart cannabis retailer, they won’t have the word “cannabis” written anywhere, nor will they have any kind of link between their PayPal account and their actual storefront, so as to minimize the risk of being shut down.

So, whenever you buy cannabis using PayPal, simply make sure that you don’t make any reference to cannabis at all; if you need to include a reference number or a note in the payment order, make something up, such as “Rent” or “To pay for dry cleaning.”

While it might seem a bit nefarious to lie on these sorts of forms, it is equally heinous to attempt to curtail your ability to purchase cannabis safely to begin with; despite the saying that two wrongs don't make a right, sometimes you are left with no other option than to do a little bit of light fibbing.

Final Thoughts on Whether PayPal Accepts Cannabis

The situation that retailers, banking establishments, and you the consumer find themselves in is pretty ridiculous at the moment; cannabis is both legal and illegal, accepted and not accepted, safe yet somehow dangerous. You can legally go and buy some from a regular retailer in thirty-three different US states, yet if you were to try and use your bank account or your PayPal account to pay for it, you might find yourself banned from their services entirely.
Until the country wakes up a bit and realizes that making it needlessly difficult to buy cannabis safely isn't helping anyone, you are going to have to make up a small amount of white lies on your PayPal account, so as to ensure you can actually use the service that you deserve to be able to use to pay for cannabis.
Don’t give up hope, though, the SAFE Banking Act is coming eventually; it might take a little while longer, but the country will get there in the end.
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