Does PayPal Accept CBD Sales? The Answer May Shock You

PayPal’s CBD policy has proven to be one of the most misunderstood within the larger cannabidiol market. Since CBD technically falls under the high-risk banner, it is subject to the potential for chargebacks as well as reputational risk, thus making it an uncertain prospect for a premier brand such as PayPal.

A longtime payments industry juggernaut, PayPal accumulated $31.8 billion in net revenue last year alone, with over 434 million active users ^[1]ChargeFlow. “PayPal Statistics and Facts 2025 (Updated)“. Accessed March 20, 2025. PayPal remains an elite choice for business owners and consumers alike. The platform has also earned a reputation for its strong policies regarding prohibited items.

As CBD’s popularity continues to grow in the United States, so too does the number of merchants wondering if their business can process CBD-related payments on PayPal. We’ve got the answers for you in this guide, where we’ll explore everything you need to know about using PayPal as a CBD business and providing reliable payment solution alternatives. Let’s dive in!

Does PayPal Allow CBD Sales?

The short answer is that PayPal does not allow CBD sales on its platform. CBD, or cannabidiol, is derived from the cannabis plant. Since cannabis is still considered a narcotic according to PayPal’s Acceptable Use Policy, it stands to reason that PayPal cannot process transactions for cannabis-derived products.

It is important to note that CBD does not contain the same volume of psychoactive-stimulating substances as traditional cannabis. THC, or tetrahydrocannabinol, is the other factor in the cannabis equation. To sell CBD products online, you must choose another payment solution provider to handle credit and debit card transactions.

PayPal’s CBD policy

Per PayPal’s Acceptable Use Policy, last updated in 2022, the company states that merchants may not use PayPal’s service for activities that “relate to transactions involving (a) narcotics, steroids, certain controlled substances or other products that present a risk to consumer safety.” ^[2]PayPal. “Acceptable Use Policy“. Accessed March 20, 2025.

CBD remains legal on a federal level, although many states still enforce restrictions on cannabidiol-related products. Still, PayPal harbors something of an illicit association with cannabis-derived products as it relates to their business practices. Hence, these products are therefore ineligible for payment services.

Admittedly, this is a complex discussion. While most don’t see CBD as a drug, the fact that it is derived from the cannabis plant complicates matters considerably.

Can You Do Anything To Change The Policy?

Considering the popularity of CBD in today’s market, you might be wondering if it’s possible to modify PayPal’s CBD policy. Unfortunately, the fact remains that merchants cannot sell CBD on PayPal. As one of the most prominent players in the digital payment space, PayPal has decided to avoid processing CBD-related transactions altogether. Of course, there is always the possibility that this policy could change. However, there are no readily apparent indicators that PayPal will start servicing CBD businesses anytime soon.

CBD merchants aren’t alone in their suffering from PayPal’s conservative standards. Many other regulated, higher-risk industries cannot access PayPal’s payment services. Steep fees, possible delays, and other complications all play a role.

What are the Consequences of Violating PayPal’s CBD Policy?

Per its user agreement, PayPal reserves the right to remove merchants from its platform for violating regulations related to restricted products. Having said that, it’s best not to question PayPal’s willingness to hold your funds or freeze your account if you persist in selling CBD products despite the platform’s policy. In fact, PayPal was sued in 2022 for freezing customer accounts without providing reasoning.^[3]Bloomberg. “PayPal Sued for Freezing Customer Accounts Without Explanation“. Accessed March 20, 2025.

An account suspension and subsequent loss of payment processing capabilities could create significant financial losses for your business. Since it can take weeks to approve a new merchant account, it is in your best interests to set up alternative payment solutions immediately to avoid processing setbacks and revenue snags.

PayPal Alternatives for Selling CBD Online

The CBD industry is forecasted to reach a valuation of more than $59 billion in 2030, making it an incredibly fast-growing sector within the United States.^[4]Global News Wire. “Cannabidiol (CBD) Market Size Worth USD 59.3 Billion by 2030 at 18.2% CAGR – Report by Market Research Future (MRFR)“. Accessed March 20, 2025. To that point, certain U.S. state lawmakers are becoming increasingly more comfortable with the CBD industry.

Even with this growth, entrepreneurs launching CBD businesses have limited options when it comes to payment processing. Much of this is due to the regulations that have come to define the industry. PayPal is not the only payment service provider restricting access to CBD-related transactions; many other payment service providers maintain a no-CBD stance. Regarding processing payments, both Shopify and Stripe present complications for CBD merchants.

Certain payment service providers may lack the tools and resources to protect your business from chargebacks, fraud, and other unwanted hindrances. To successfully capitalize on CBD’s popularity within the U.S. consumer market and avoid all pitfalls, merchants are advised to acquire a high-risk merchant account from a merchant services provider.

Not only do high-risk merchant accounts offer the necessary support to businesses carrying an enhanced level of financial risk, but they also come with a range of other advantages:

Get Your CBD Merchant Account with PaymentCloud

Many processors are unable or unwilling to offer payment services to businesses within the CBD industry—but not PaymentCloud! We’ve leveraged our experience servicing businesses in high-risk sections to provide a robust suite of advanced payment solutions, personalized customer support, and the most competitive rates. Apply for a CBD merchant account from PaymentCloud and get the approval you’ve been looking for ASAP!

We’ve helped high-risk businesses just like yours for over a decade!

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