CBD, or cannabidiol, is an active ingredient found in marijuana. It is claimed by many users that it delivers much-needed pain relief from a host of health conditions. All of this pain relief is delivered, without “getting them high.” Users also use CBD for relief against inflammation and anxiety.
A study by investment bank Cowen & Co. projected that the estimated revenue that CBD products would earn would be $16 billion by the year 2025.
What Is CBD Oil?
CBD oil is a liquid solution that has CBD isolates that are mixed with carrier oil. The carrier oil can be palm kernel oil or coconut-based MCT oil. The CBD isolates are withdrawn from raw hemp that is broken down by cannabis plants.
CBD, or Cannabidiol, is a phytocannabinoid that is naturally found in Cannabis sativa strains. This compound is organic and does not have the capacity to produce any intoxicating side effects.
Legal Concerns Still Plague The CBD Industry
In 2018, the Farm Bill legalized the production, growth, and manufacturing of hemp. In addition, it allowed CBD oil as well as other products sourced from hemp plants to be sold.
However, the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) prohibit merchants from making any sort of “unproven health claims.” They believe that making these sorts of false claims or any promises of improved help can actually deter consumers from seeking professional medical care.
Additionally, CBD oil is legal in the U.S., only if it is sourced from industrialized hemp. Legally, it can only contain less than .3 percent THC (another chemical compound taken from a Cannabis plant).
It would be best to stick to selling hemp-based CBD oil as it is a cannabis-derived product that is most closely aligned with the current regulations set forth by the U.S. government. It is made from industrial hemp that already contains less than .3 percent THC.
In the end, it is the state that ultimately determines whether or not CBD can be used legally, as well as allow the manufacture and distribution of such products.
Why Do You Need A CBD Oil Merchant Account?
CBD businesses are still considered a high-risk industry, meaning that these businesses will experience great difficulty in acquiring a CBD Oil merchant account to process their card payments.
That is why you will need to seek payment processing services from a high-risk merchant account provider. You will especially need to find one that is well-equipped and well-versed in the regulations and the CBD industry.
What To Look For In A CBD Merchant Account
CBD merchants have enough legislative hoops to go through and cannot afford to choose an inexperienced payment processor. That is why you need to do your due diligence to research each merchant account provider thoroughly to ensure that your business will have the right save and legal processing solution to accept payments.
1. High-risk specialization
It is imperative to find a processor who has a considerable amount of experience working in the high-risk sector, especially the CBD vertical. These providers should stay up-to-date with the latest and often confusing regulations.
Since this industry is prone to higher than normal incidences of fraud and chargebacks, they need to be fully equipped with the tools and the technology to combat these issues.
2. Competitive fees
Fees will be higher for high-risk merchants. However, fees should never be outrageous. If you find that their fees could financially cripple your operation, it would be best to walk away and seek an alternative.
Also be aware of a number of additional fees that can be charged, including non-compliance fees, monthly and annual fees, and chargeback fees.
3. Fair contracts
Depending on the provider, some may not require you to sign up for a contract. Others will only work with you if you are willing to bind yourself into a contract with them. This is not advisable, especially if they do not demonstrate a long history of positive feedback from current and former clients.
4. Excellent customer service
When it comes to running an online business, you should have immediate access to your provider’s customer service team to get you out of a problem or to help you resolve any technical problems such as payment gateway issues. Customer service representatives should be available either online via chat or email and phone most days and times of the year.
How To Get A CBD Oil Merchant Account
To ensure that you have positioned yourself to be approved for a CBD Oil merchant account, follow these steps:
- Get familiar with your hemp laws
Ensure you are up-to-speed with all of the CBD laws. Also, make sure that you are selling CBD Oil that meets regulations. For that, you need to be familiar with where it’s sourced and how it is manufactured.
- Processing history
Make sure that you have proper documentation which demonstrates your processing history for the next six months. This can include the total volume of orders, the number of transactions, and chargebacks that you have incurred.
- Secure website
All pricing and shipping must be transparent. Your website must also ensure that all credit card information is kept secure and only released to those responsible and on a “need-to-know” basis.
Open Your CBD Oil Merchant Account Today
When all the aforementioned is in place, you would then submit any other required documentation as requested by your provider, fill out the online application form and wait for the approval. If everything is found to be legitimate and in place, you will be granted a CBD Oil Merchant Account to begin accepting payments.