Get a Hemp Merchant Account as Crop Production Soars

Feb 26, 2019

Most states in the United States are onboard with the cultivation and use of industrial hemp, according to the 2018 U.S. Hemp Crop Report released by the advocacy group, Vote Hemp.

The report details state-by-state progress of legislation, lists acreage of hemp grown, identifies states with active pilot farming programs, showing that many states are on the same page with the federal government, which last year adopted a law decriminalizing hemp.

Most states in the nation have defined industrial hemp as “distinct,” and removed any obstacles to its production. The only states that have not made this move and cannot take advantage of the pilot program under the 2018 farm bill are: Iowa, Louisiana, New Hampshire, Mississippi, Georgia, Ohio, South Dakota, Idaho, and Texas.

With more than triple the number of acres of hemp planted compared to 2017, hemp advocates believe this shows the public is embracing hemp. Therefore, all interested parties should invest energy in expanding hemp cultivations and the market for hemp products across the country.

What Changed Under the New Law

The 2018 Farm Bill, which was signed into law in December, essentially removed roadblocks from the growing hemp industry in the U.S. It removed hemp from the Controlled Substances Act and gave the U.S. Department of Agriculture full regulatory control over the crop.

Prior to this law, hemp and CBD extract were classified as a Schedule 1 substances, which is the U.S. Drug Enforcement Administration’s most restricted category. Now, 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.

Also, the new law gave state departments of agriculture to submit hemp program plans for approval and regulate hemp cultivation under the specific programs for their states. The law also removed restrictions on banking, water rights, and other regulatory roadblocks the hemp industry currently faces.

Facts About Hemp Production

Vote Hemp’s report shows that hemp cultivation in the U.S. is growing at an unprecedented pace. In 2018, the number of acres of hemp grown across 23 states totaled 78,176, which is three times the number of acres grown from the previous year. Additionally, 3,544 farmers and researchers were issued state licenses to cultivate hemp and 40 universities conducted research on the crop. The number of licenses issued almost doubled from the previous year.

The Many Uses of Hemp

Hemp has become a major component of the natural foods industry. Hemp seed is a rich source of omega-3 and omega-6 essential fatty acids (EFAs), as well as a good source highly-digestible protein. It is considered a complete protein because it contains all 10 essential amino acids.

Advancements in hemp research and manufacturing demonstrate the versatility and product-potential for hemp. Hemp fiber can also be used to create eco-friendly packaging materials and hard bio-plastics that can be used for things, such as airplanes cars. Hemp houses also are a growing part of the industry. These houses are made with hempcrete, which is energy-efficient, non-toxic, mold-resistant, fire-resistant, and insect-resistant.

Getting in on the Hemp Industry

Though the public, many states, and the federal government have shown their support for hemp production, do not expect it to be easy to get a hemp merchant account. The law is still new and not all states have embraced the cultivation of the crop, so expect many traditional financial institutions to not be too eager to work with your business. Often, they will not want to deal with products and services that are considered too risky due to legal ambiguities.

Get Hemp Payment Processing

As hemp production and its uses become more mainstream, expect banks to slowly begin working with these merchants. As they continue to dip their toes slowly into the pool, turn to third-party merchant account providers that will offer services to hemp merchants. As high-risk merchants, anticipate paying higher processing rates, putting up a rolling reserve, and to be monitored more closely.

When You Are Ready to Apply

When you are ready to apply for a hemp merchant account, turn to eMerchantBroker.com (EMB). EMB works with high-risk merchants, including those in the hemp industry. Apply online 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.

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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.

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