Get a CBD Merchant Account as States Mull Edibles Industry

Mar 19, 2019

The future sales of food and dietary supplement products containing CBD, which are commonly referred to as edibles, remain stalled at state and federal laws.

Despite the passage of the 2018 farm bill last year, which decriminalized hemp and made it legal to cultivate the crop for certain purposes, some states have banned the sale of food, such as gummies and cookies, and drinks with added CBD.

Reasons CBD Edibles Are in Jeopardy

Under the farm law, any part, extract, or derivative of the Cannabis plant that has a THC concentration of not more than 0.3 percent on a dry weight basis is legal. Nothing in the federal law legalizes marijuana, which also comes from the Cannabis plant. After the farm bill passed, U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb released a statement, warning that the law did not change the agency’s position on food, drinks, or dietary supplements that contain CBD. According the U.S. Food, Drug, and Cosmetic Act, it is illegal to market or sell food and supplements that contain CBD even if they are hemp-derived. The problem is that federal laws prohibits the sale of any food or supplement that contains an ingredient that was investigated in clinical trials or approved as a drug by the FDA. Since CBD was approved as a drug ingredient in the FDA-approved anti-epilepsy drug, Epidiolex before it was marketed in food, selling any edible infused with CBD is prohibited.

States That Have Banned CBD Edibles

In light of the FDA’s statement, many states have banned edibles to be in compliance with it. Maine’s Department of Health and Human Services informed businesses that they must rid their shelves of any food or supplements that contain CBD because it is not a federally-approved food additive. Maine requires shoppers to buy these products from marijuana dispensaries. CBD products that can be smoked, vaped, or applied via patch or lotion can remain in stores.

Also citing that CBD has not been deemed safe by the FDA as a food additive, the New York Department of Health banned CBD-infused foods. In Ohio, the state’s medical marijuana law “strictly prohibits” CBD from being sold anywhere other than its 56 licensed dispensaries. It has not addressed hemp regulations since the farm bill was passed.

Currently, Texas views CBD products in the same light, noting that the FDA does not recognize it as an approved additive. Last month, HB 1325 was introduced, which would allow Texas to join in hemp cultivation, and further clarify that hemp products, including those that contain CBD, can be sold at retail stores. Both the state House and Senate would not need to pass bills, and, then, it would need to be signed into law by the governor.

Other Factors Complicating the Situation

Gottlieb has said that his agency could consider re-examining its current policy and would hold a public hearing on the matter. Those CBD-enthusiasts who felt they had Gottlieb’s ear and felt changes were probable are now worried. Gottlieb announced that he is resigning, effective in April.

Now, many worry that talks about regulatory changes to the CBD edible industry will slow down or come to a screeching halt. A new commissioner for the agency has not been announced, and many worry that no matter who replaces Gottlieb they will not make CBD regulations a priority.

What CBD Edible Merchants Should Do Now

As the agency transitions, merchants interested in marketing and selling CBD edibles should start developing business plans that include engaging with the FDA. The best path to get your products on the market will put you on the path to success.

If you sell CBD lotions, patches, and other products and you need merchant account services, then turn to eMerchantBroker.com (EMB). EMB specializes in working with high-risk businesses, including those that sell CBD products. Apply online to get a CBD merchant account.

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

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

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.

Live Chat