Paypal prohibits payment for tobacco and other stuff.
For adult material they want you to ask permission. They might grant it or refuse it, depending on lots of criteria. Like where your business is located and if you are a business and what kind of adult material it is. (This is speculation. But it obviously is possible, since even Steam accepts payment per paypal for adult content. So you might be too small, there might be tax issues and so on.)
Activities Requiring Approval
PayPal requires pre-approval to accept payments for certain services as detailed in the chart below.
10 | Mature Audience Content | Any adult content delivered digitally including video on demand (VOD) and web-cam activities. PayPal may be restricted from processing payments in certain jurisdictions for adult DVD’s, magazines and other adult themed products or services. |