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Digital payments platform Square welcomes US marijuana businesses

[NEW YORK] Square Inc has become one of the first US payments platforms doing business with cannabis providers, just as marijuana legalisation gains traction and the industry is booming.

The company this week started allowing cannabis businesses to sell products on its platform while keeping track of payment and inventory management.

Square's programme will be available to US businesses that sell cannabidiol, or CBD products. CBD derived from hemp was legalised last year, while the intoxicating THC compound remains illegal at the federal level.

"We saw this as an opportunity to make our tools available to sellers" in the pot industry, Square said in a statement.

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The move comes as more US states legalise marijuana, unleashing a surge in demand. The legal marijuana market, estimated at US$13.8 billion globally last year, is expected to increase at 24 per cent annually by 2025, according to Grand View Research.

Payment is also getting easier. Last month, US House advanced a bill designed to let banks do business with cannabis companies in states that permit marijuana sales, a step that some supporters see as helping to pave the way to nationwide legalisation.

Shares of Square climbed 3.7 per cent as of 2.41pm in New York, extending their gains for the year to 11 per cent.

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