Selling CBD products on Shopify

Jan 13, 2020

Last September, Shopify made the announcement that all US-based merchants utilizing their platform will be allowed to sell hemp-derived CBD and CBD-type of products only where it’s permitted by state and local law. 

Although Shopify merchants cannot use Shopify’s payment gateways, they can take advantage of their partners Authorize.net, DigiPay, and eMerchantBroker.com, as payment gateway solutions for merchants.

Forbes has predicted that the US CBD market could bring in as much as $16 billion by 2025. Although this is good news for CBD merchants, there are still limitations due to state and local laws. Shopify highly recommends merchants to stay up-to-date with all current FDA guidelines and even consult with an attorney to ensure they are adhering to the law.

Steps To Sell CBD Products On Shopify

  1. If you are a new Shopify merchant wanting to sell hemp-derived CBD and CBD-related products on Shopify, you can start by creating a Shopify store using this link: www.shopify.com/sell/cbd.
  2. Review and submit the “Attestation for the Sale of Hemp and Hemp-Derived Products”. In order to access and complete this form, you need to be signed into your Shopify account as the store owner. If you are not the store owner or your store’s address is not US-based, the link will redirect you to the Shopify admin. Before you begin selling CBD products, you must understand and submit the attestation form. Once submitted, the attestation process is automatic. There is no need to wait for a response from the Shopify team about it. 
  3. Choose and apply for a third-party payment gateway. At this time, Shopify payments is not available for the selling of hemp or any other CBD products. However, Shopify has partnered up with third-party payment gateways that do support the sale of certain types of hemp and/or hemp-derived CBD products.  Research the requirements for approval first as each gateway has its own requirements. You can apply directly to the eMerchantBroker.com gateway using this “Shopify-specific” link: https://embcbd.emerchantbroker.com.

Take note that hemp-derived CBD transactions are scrutinized more carefully by third-party payment gateways than any other transactions.  Therefore, the application and approval process can be more involved. Third-party payment gateways take into consideration several factors in approving payments and rates for businesses selling CBD products, including product type, the date in which the business was created, the transaction history, volume, product mix, and many others. Since all approvals are solely at the discretion of the third-party payment gateway, Shopify cannot guarantee the approval of your business.

With 1 in 7 Americans using CBD or CBD-related products, it is without question an emerging industry that will continue to skyrocket. However, as a CBD merchant, it is your responsibility to comply with federal, state, local laws, as well as Shopify’s policies, its app, “partner ecosystem”, and any other third-party providers. If you have any questions concerning the CBD business and the laws governing it, always consult with your attorney.

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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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