A British shop that sells bath bombs claims that PayPal has frozen its account because some of its aromatherapy products contain CBD.

Retailers are permitted to sell CBD-based products in the UK as long as they contain no more than 0.2% THC. Yet CBD remains illegal at a federal level in the USA and PayPal is an American company, so it has apparently decided to freeze the company’s merchant trader account.

Jane and Mike Wood, the owners of BonneBomb in Deal, Kent, said that PayPal’s decision has led to other payment providers freezing their accounts and affected card payments to their ecommerce platform. They also claim that eBay, another American company, has banned them from buying and selling all goods as a result of the CBD furor.

PayPal said the store is in breach of its acceptable use policy because it sells products with CBD in them. “It makes you feel dirty when they say that – you feel like you’re selling top shelf products,” said Jane Wood.

PayPal said it does not permit use of its platform for CBD sales, while eBay added that products containing CBD oil are prohibited because “there is no way to determine how much THC is in the product”.

Hemp-based CBD is now legal across the U.S. due to the Farm Bill, but cannabis-derived CBD remains illegal at a federal level. More than half of all states have legalized cannabis for medicinal purposes and many have also legalized it for recreational purposes, but they are at odds with the feds.

American cannabis companies are therefore unable to access the banking system and they are largely reliant on cash payments. They are also unable to use providers like PayPal, but it is interesting to see companies outside of the U.S. prohibited from using its services too.

The global cannabis market is expected to reach $66.3 billion by 2025 and CBD is a major health craze, but PayPal could be shooting itself in the foot by banning companies that sell products containing it.

The owners of BonneBomb claim that PayPal still works with major health store chain Holland & Barrett, despite it selling CBD-based products, which has further fuelled their annoyance.

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