Easy As 1-2-3 – Getting a CBD Oil Merchant Account from EMB

Jan 26, 2018

Cannabidiol, or better known as CBD oil, can offer relief to people suffering with long-term conditions, such as seizures and chronic pain. Despite its medical benefits, any business that tries to take on selling CBD oil is up for a challenge. Most of the problems start with confusing laws, individual states and the federal government’s interpretations of laws, and misinformation surrounding CBD. These factors make it very difficult to obtain a CBD oil merchant account, which is critical if you are a web-based business. Merchant accounts allow you to effectively take debit and credit payments. Without them, you must remain as a cash and check only business, which can significantly cut into your profit margins.

Banks avoid working with CBD oil businesses because they are way too risky because there are too many legalities concerning the industry. Though there also aren’t very many other merchant account providers that want to take gamble on these businesses, all hope is not lost on your business. The best way to get a CBD oil merchant account is to know the rules, know what you are up against, and prepare.

What is CBD oil?

Much of the controversy surrounding CBD oil due to misinformation. Hemp and marijuana come from the Cannabis sativa L. plant. Cannabinoids are naturally-occurring compounds found in cannabis plants. Cannabidiol or CBD is one of the many cannabinoids found in hemp and marijuana plants. Hemp is harvested commercially for its seeds and stalks. For cannabis to be considered hemp, it must have a THC level below 0.3 per dry weight. THC is what gets you “high” or gives you a feeling of euphoria. The THC levels in hemp are dramatically lower than they are in least potent strains of marijuana. Due to the low levels of THC in CBD oil, it can’t get you high. What CBD oil can do is offer relief from pain, inflammation, anxiety, seizures, spasms, and other neurological conditions.

Know the laws concerning CBD

Though CBD oil has been acknowledged for its medical benefits, traditional banks and credit card processing services have denied businesses merchant accounts because of conflicting international, federal, and state laws.

Due to the Agricultural Act of 2014, 14 states, including Kentucky, Colorado, Oregon, Tennessee, and California, can legally grow and process industrial hemp and hemp seeds. The law allowed states to pass laws allowing industrial hemp, as long as, their states’ agriculture departments oversaw the pilot programs. However, there are still some major problems with the law. It didn’t clearly specify who could sell products and derivatives of hemp. Though the law is vague, many government officials believe its intent is to permit hemp research to see if the plant can be a viable cash crop for struggling farmers.

Unfortunately, federal laws only make it all the more complicated. Since 2016, marijuana has been classified as an illegal Schedule One drug in the United States putting it in the same class as dangerous drugs, such as cocaine, heroin, and methamphetamines. This means anything that comes from the cannabis plant, including some forms of CBD, are illegal.

On the other hand, medical marijuana is legal in 29 states and Washington, D.C., and recreational marijuana is available in Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Washington, and Washington, D.C. Any states that permit medical and recreational marijuana use legal also consider CBD oil legal. On the legal end, in January 2018, Attorney General Jeff Sessions rescinded the Cole Memo, a 2013 Department of Justice memorandum that permitted state-sanctioned marijuana business to thrive despite the awkward situation between state and federal laws. Despite this federal action, state lawmakers support their pro-marijuana laws and others continue to advance marijuana reform legislation.

If authorities find that the sale or purchase of CBD oil has conflicting legal or material (ingredient) discrepancies, they can confiscate your assets and shut down your business. This can leave merchant account providers and banks responsible for refunds and any related fees they are hit with due to the business being shut down. Therefore, it’s best to understand what laws are where you plan to sell and distribute.

Steps to take to get a CBD oil merchant account

Despite the controversy and conflicting laws, it is not impossible to get a merchant account. Here are three ways to increase your chances of getting a CBD oil merchant account:
1. Maintain a good credit processing history – By keeping chargeback ratios low it will show merchant account providers that you have a solid business model, skilled, trained customer service staff, and quality products. Businesses that are new and don’t have a processing history will need to show bank statements. Financials that don’t show any overdraft fees or periods of low balances will have the best shot at getting a merchant account.

2. Keep high or stable processing volumes – Some merchant account providers won’t invest unless they know there is enough demand or interest in your product or service. Maintaining a stable or a large volume of transactions each month will show merchant account providers that you are worth their investments.

3. Comply with laws – Find out if your specific state permits the sale of CBD oil. If so, get any required licensing or comply with any other necessary regulations. Credit card processors may request a copy of the license when you apply for merchant account services.

The final say

Since the laws and the market for these products are new and ever-evolving, obtaining and maintaining a CBD oil merchant account will be difficult but not impossible. eMerchantBroker.com (EMB) understands the challenges of trying to start and keep a CBD oil business. So, when you are ready to find a trusted, responsible credit card processor, contact us to find out about our merchant account service and payment processing solutions.

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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