SANDY SPRINGS, Ga. (Atlanta News First) – One of the big headaches for companies that sell marijuana, CBD, and hemp-related products is payment processing. The recent closure of a major local processor could hurt or, in some cases, help the industry’s small businesses.
The issue stems from marijuana being a Schedule 1 drug, meaning it’s a controlled substance. That makes banks and credit card companies hesitant to work with the marijuana industry, even in states where the drug is legal.
“Citi Bank closed us, and Truist asked us to leave as well,” said Joe Salome, co-owner of The Georgia Hemp Company.
For Salome, finding a way to accept credit cards was tough.
“Square processing came to our rescue, if you will, to help us process credit cards,” he said.
The 2018 Farm Bill removed hemp from the list of Schedule 1 drugs, clearing a financial path that marijuana businesses do not have.
“There’s a lot of private security, there’s a lot of armored trucks, and there’s a lot of fly-by-night credit card processors,” Salome said.
Legitimate processors are highly sought after. So, when Peachtree City-based FP Omni Technologie–worth nearly half a billion dollars–announced over the holidays that it would no longer provide processing services to hundreds of businesses and over a thousand merchants, the cash flow tightened.
“They have to find a new way to take those funds,” Salome said. “Whether it’s cash, Zelle, or Cash App.”
But getting those companies to deal in cannabis is tough. And with customers searching for THC products, the less-regulated hemp industry steps in.
“Yes, this could absolutely help us,” Salome said.
Which is better than the alternative.
“Where are they going to go? Where they’ve gone the past 100 years: the black market,” Salome admitted.
Marijuana’s loss is The Georgia Hemp Company’s gain. But Salome says there needs to be a better set of rules at the federal level so that the industry has more financial options.
“We like regulation,” he said.
