Introduction
The regulatory environment for hemp, CBD, and THC-drink retailers in the United States has evolved rapidly—and 2025 is shaping up to be one of the most challenging years yet for cash compliance. While cannabis dispensaries have long been subject to the Internal Revenue Code’s Section 6050I reporting requirements for large cash transactions, the increasing popularity of hemp-derived products and THC beverages at events, pop-ups, and retail stores means that more operators in these sectors are now squarely in the IRS’s sights.
This detailed guide addresses how federal cash reporting rules—embodied in IRS Form 8300—apply to the modern hemp market, why the risks in 2025 are rising for both established and event-based retailers, and how to develop bulletproof standard operating procedures (SOPs) to protect your business.
IRS Form 8300 is required under IRC § 6050I for any trade or business that receives more than $10,000 in cash (or related transactions) in the course of their operations. This requirement, originally instituted to combat money laundering, applies not just to cannabis dispensaries but to every retailer—including those selling only federally legal hemp and CBD products.
The Reporter’s Obligation
- Trigger: Receiving more than $10,000 in cash, either in a single transaction or in a series of related transactions.
- Timing: The Form 8300 must be filed with the IRS (and FinCEN) within 15 days of receiving the payment that puts the total over the $10,000 threshold (IRS Reference Guide).
- Parties: Includes both businesses with ongoing retail operations and those operating temporarily—such as at trade shows, festivals, or pop-up events.
One of the trickiest aspects of compliance is the concept of related transactions. According to the IRS:
“Related transactions are transactions between a payer (or an agent of the payer) and a recipient of cash occurring within a 24-hour period. Transactions may also be considered related even if they occur over several days, weeks, or months if the business knows, or has reason to know, that they are part of a series of connected transactions.” (Source)
Signs of Structuring
Structuring, or breaking up payments to avoid the $10,000 reporting threshold, is illegal. Both the act of structuring and the failure to report related transactions can lead to severe penalties and potential criminal exposure.
Example: A customer attempts to pay $6,000 in cash at a festival booth on a Saturday and another $5,000 in cash at a different pop-up stand (same business) the next day—that is a related transaction for Form 8300.
Penalties: Filing failures can result in fines exceeding $28,000 per violation, plus additional penalties for willful violations or attempts to structure (NACATProS).
- Increased IRS scrutiny: With rising cash volume at events, unbanked retailers, and payment processor de-risking, the IRS is focusing on hemp, CBD, and THC drink businesses—not just marijuana dispensaries.
- Growth of event-based retail: Seasonal fairs, music festivals, and hemp expos drive significant cash sales, and pop-ups often lack robust compliance programs.
- Banking challenges: Even federally compliant hemp retailers risk account closure if perceived as high-risk or if found violating cash reporting rules.
AML and Bank Expectations
Aligning anti-money laundering (AML) controls and KYC recordkeeping with the standards of financial institutions is crucial. Inconsistent or missing Form 8300 filings can result in merchant services account freezes, increased AML scrutiny, or permanent loss of banking relationships (Growise CPAs).
To thrive in 2025, hemp, CBD, and THC-beverage retailers need a repeatable, defensible approach to cash reporting. Key elements of a robust SOP:
- POS/accounting controls: Ensure point-of-sale and accounting systems flag cumulative cash receipts from a single customer or agent—regardless of whether the sales occur at one location or across event booths.
- Transaction timeline review: Implement a system for monitoring cash payments and flagging related transactions within any 24-hour period and throughout recurring customer interactions.
2. Customer Identification and KYC
- Identity verification: Prior to accepting any cash payment that could cumulatively exceed $10,000, collect and record customer identity information (name, address, Taxpayer Identification Number or SSN, ID type and number).
- Written notification: Inform customers, using a standard language notice, that you are required by law to report large cash transactions to the IRS.
3. Timely Filing Protocol
- 15-day window: Assign clear staff responsibilities—who files, where documentation is stored, and who reviews the submission.
- Digital and paper filing: Prepare to file Form 8300 either electronically (IRS BSA E-Filing System) or by mail.
- Annual requirement: By January 31 of the following year, provide written notice to all reported parties that a Form 8300 was filed regarding their transaction.
4. Staff Education and Training
- Anti-structuring training: Regularly train staff to recognize and refuse structured payments; create scripts for declining suspicious transactions.
- Event staffing: Brief seasonal or pop-up event workers on cash receipt policies, the risks of aggregation and structuring, and escalation procedures for suspicious customer behavior.
5. Documentation & Recordkeeping
- Maintain records of all Form 8300 filings, related customer identity documents, and internal cash logs for at least 5 years.
- Audit and review: Conduct periodic reviews (especially after events) of all large cash sales, POS logs, and filing compliance.
Red Flags and Real-World Scenarios: What to Watch For
- Frequent near-threshold cash sales: Multiple purchases from the same individual just under $10,000.
- Multiple booths or registers: Customers using different points of sale operated by your business at the same event—these are not "separate" transactions for IRS purposes.
- Refusals to provide ID: Insist on KYC protocols, and document refusals as required.
If you have reason to believe a customer is attempting to structure transactions, consider checking the “suspicious transaction” box on Form 8300 and consult with a compliance expert (IRS Cannabis FAQ).
Key Takeaways for Hemp Retailers in 2025
For the rapidly growing hemp and THC-beverage sectors, Form 8300 is no longer just a cannabis dispensary issue. Increasing scrutiny and enforcement, especially at cash-heavy events, make robust compliance a business necessity:
- File promptly (within 15 days) for cash receipts over $10,000—aggregate related transactions from the same customer.
- Train all staff and event workers on structuring, KYC, and timely filing.
- Align cash management controls with banking and AML standards to avoid account loss.
- Maintain meticulous records—proactive audits could save your business from costly penalty exposure.
Form 8300 noncompliance and structuring attempts can expose hemp, CBD, and THC beverage retailers to five-figure fines, criminal liability, and bank de-risking in 2025.
Stay ahead of the regulatory curve and protect your business—trust CannabisRegulations.ai for the latest cash compliance protocols, SOP templates, and up-to-date regulatory insights.
