PayPal wants the SAFE Banking Act approved
PayPal (PYPL) is lobbying lawmakers in Washington to approve a piece of legislation that would allow banks and payment companies under federal regulation to handle cannabis money without the risk of being punished. According to a Bloomberg report, in the first quarter, PayPal joined the growing number of entities lobbying Congress to approve the SAFE Banking Act.
Although many states have legalized cannabis consumption and trade, cannabis remains banned under federal law. Therefore, federally regulated entities such as banks and payment companies run the risk of being punished if they handle cannabis transactions. The SAFE Banking Act promises to provide a safe harbor for banks and payment processors regarding the handling of cannabis money.
US cannabis economy headed to $80 billion
PayPal’s decision to join in on cannabis lobbying shows its eagerness to do business in the cannabis industry—and for good reason. The global cannabis market in the United States is expected to reach $80 billion annually by 2030. Therefore, joining the cannabis economy could be a boon for PayPal.
PayPal generated revenue of $4.1 billion in the first quarter, representing an increase of 12% YoY (year-over-year). PayPal’s payment rivals Square (SQ), Fiserv (FISV), and First Data Corporation (FDC) recorded revenue rises of 43%, 4.0%, and 1.0% YoY, respectively, in the first quarter.
Shopify (SHOP), the company whose platform many digital cannabis shops in Canada are built upon, recorded revenue growth of 50% YoY in the first quarter.