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The cheques stopped. Not because the business failed, not because of a licensing violation, not because of anything the employer did. The payroll provider simply sent a notice — sometimes two weeks out, sometimes less — and walked away. One day, staff expected their wages. The next, the software returned an error.
This is the scenario playing out across parts of the United States right now, as mainstream financial infrastructure quietly retreats from hemp and cannabis businesses. Last week, Square — the point-of-sale and payments company — gave its hemp-product merchants a final deadline to remove CBD and hemp-derived items from their catalogues entirely. The company cited an upcoming federal redefinition of hemp as its reason. As the US publication Marijuana Moment reported, Square had previously marketed its services directly to hemp beverage and edible sellers before quietly removing that page.
Most coverage fixated on the products. The more consequential story sits one layer deeper, in the financial infrastructure underneath — and specifically in payroll.
Why Payroll Is the Pressure Point
Payroll systems run on bank transfers. Payroll companies depend on banking partners. And when a bank's internal compliance review identifies exposure to a federally controlled substance — as cannabis remains under US federal law — the payroll provider typically faces a binary choice: drop the client, or risk the bank withdrawing its own services. The client does nothing wrong. Its industry simply appeared on someone else's risk report.
According to Marijuana Moment, this pattern already played out in the state-legal cannabis sector in 2023, when the largest payroll provider still willing to serve cannabis companies at that time suspended key services for the sector. By one industry estimate, more than 1,000 plant-touching businesses were left searching for a replacement, often with little warning.
The stakes are higher than they appear. When a payment processor exits, a business loses convenience. When a payroll provider exits, workers miss wages. Tax deposits go out late. Withholding errors accumulate during a rushed transition. And for licensed businesses in regulated markets, timely tax compliance is frequently a condition of holding the licence itself — meaning a banking disruption can cascade into an existential regulatory threat.
The people who absorb the disruption most directly are hourly workers: production staff, retail floor staff, logistics workers. They did not choose their employer's banking relationships. They rarely know those relationships exist. But they are the ones who find the error message where their pay should be.
A Structural Problem, Not an American One
It would be tempting to read this as a uniquely American problem — a consequence of the peculiar federal-state contradiction that defines US cannabis law, where a substance can be legal in one jurisdiction and a federal compliance liability in the next. European operators might assume that a more coherent regulatory environment insulates them from equivalent risk.
That assumption deserves scrutiny. Across Europe, cannabis businesses operating within national legal frameworks still routinely encounter banking reluctance. In Germany, where adult-use cannabis reform advanced in 2024, early-stage social clubs reported difficulty accessing standard business banking. In the Netherlands, the ongoing gedoogbeleid — the tolerance policy that permits coffeeshop sales while leaving supply legally ambiguous — has meant that operators have never fully entered mainstream financial services. Spain's cannabis associations have faced similar friction.
Malta's experience reflects this European pattern. Since Malta's 2021 cannabis reform established the Cannabis Harm Reduction Association (CHRA) framework — licensed non-profit associations through which adult members can collectively access cannabis — CHRAs have had to navigate a financial services environment that remains cautious. ARUC (Authority on the Responsible Use of Cannabis), Malta's regulator for adult-use cannabis, has built an increasingly detailed operational framework for CHRAs, as outlined in our CHRA regulations guide. But regulatory clarity from a national authority does not automatically translate into appetite from a commercial bank or a payroll software provider whose own compliance teams flag cannabis as a sector risk.
A CHRA with ten or fifteen staff — a Key Officer, administrative support, distribution staff — is not a large employer. But it is an employer with statutory payroll obligations identical to any other Maltese business. If a payroll software provider's terms of service categorise cannabis associations as high-risk and withdraw services, the CHRA's compliance burden does not diminish. It simply becomes harder and more expensive to meet.
The Lesson From the US Is About Preparation, Not Panic
The op-ed published by Marijuana Moment, written by a contributor who serves on the National Cannabis Industry Association's Human Resources Committee, frames the US situation as a consequence of treating payroll as an afterthought — something operators assume will simply function until the day it does not. The same observation applies anywhere cannabis businesses operate within frameworks that remain, however unfairly, outside the mainstream risk appetite of financial services providers.
The practical advice is unglamorous but sound: know whether your payroll provider is aware of what your business does, and whether its banking partners are. A provider that has never asked is not a safe provider — it is an uninformed one. Understand where employer-of-record liability actually sits, because payroll software calculates transfers but the legal employer carries every statutory obligation that comes with those calculations.
For European operators, including Maltese CHRAs, the additional variable is that the regulatory environment continues to evolve. What a bank's compliance team classifies as acceptable today may be reassessed as policy shifts — in either direction.
The workers who depend on that payroll will not be reading the compliance reports. They will just be checking their accounts on Friday morning.
Sources:
Marijuana Moment — Hemp Businesses Are About To Learn What Marijuana Operators Already Know: Payroll Can Disappear Overnight: https://www.marijuanamoment.net/hemp-businesses-are-about-to-learn-what-marijuana-operators-already-know-payroll-can-disappear-overnight-op-ed/
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