CBD payment gateway news – updated 11/10/2021 –
Updated regularly, this page includes information on CBD e-commerce based on what we hear from clients, colleagues, and payment industry experts.
As always, do your own due diligence on all services before you sign up, and please seek qualified legal guidance before launching a CBD business.
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10/10/2021 Delta 8 and 10 are the hottest topics in online payment processing
Over the past few months, we have been reporting on the emergence of payment gateways for two new cannabis-based products, Delta 8 and Delta 10. The national landscape, in terms of finding payment processing for website owners looking to sell Delta 8 or Delta 10 online, has continually improved.
Note: laws vary from state to state, you should sit with a lawyer to educate yourself on all federal, state, and local laws
Delta 8, and its newer cousin, Delta 10 continue to be one of the most common topics discussed by many online smoke shops and CBD businesses. Questions like “Can you sell Delta 8 and Delta 10 online?” and “Are there payment gateways for Delta 8 and Delta 10 that work with Shopify, WooCommerce, etc?” are as common as similar questions for CBD and vape products were in 2019.
New legal buzz is making payment gateways and merchant accounts for Delta 8 and Delta 10 easier and more affordable
The popular legal blog by attorney Rod Kight recently highlighted what we feel is the main reason why payment processors are becoming more open to and more competitive in terms of credit card processing for Delta 8 and Delta 10.
The headline of Attorney Kight’s November 2nd, 2021 blog post on Canna Business Law, “IS D8 FROM HEMP A CONTROLLED SUBSTANCE? DEA SAYS “NO”.” is possibly an oversimplification, but the message came across loud and clear to many in the payment processing industry that we have spoken to.
Delta 8 and Delta 10 payment processing is not something the main CBD payment processors are shying away from anymore.
Below is an excerpt from the Cannabusines Law post by Ron Kight, we have linked to the original article below as well.
DEA ADDRESSES THE LEGAL STATUS OF DELTA-8 THC IN TWO SEPARATE ANNOUNCEMENTS.
We have spent quite a bit of time at Kight Law during the past year writing, speaking, and consulting with clients on the issue of whether or not delta-8 tetrahydrocannabinol (“D8”) and other related cannabinoids from hemp are controlled substances under federal law. Our position, that D8 is not a controlled substance under federal law, is most directly addressed in the legal position statement we prepared for the Hemp Industries Association (“HIA”), the leading national hemp organization in the USA. You can read the position statement by clicking here.
Our position on D8 was recently confirmed by the Drug Enforcement Administration (“DEA”) in two separate public statements.
Because of variance between jurisdictions, we strongly advise that you meet with a lawyer who is experienced in cannabis law and e-commerce before selling items like CBD, Deltas 8, and Delta 10 online.
Additionally, it is important to note that although the payment gateway and merchant account options for Delta 8 and Delta 10 are now broad enough that integration with Shopify, WooCommerc,e Wix, Squarespace, and most other shopping carts is pretty straightforward, the traditional processors like Stripe, PayPal, and Shopify Payments still do not allow cannabis or CBD type products of any kind.
More information on payment processing for CBD, Delta 8, and Delta 10
09/15/2021 Delta 10 payment gateways and merchant accounts emerging for Shopify, WooCommerce, and Wix websites, among others
In addition to traditional Delta 9, which must be below legal levels to be sold under the 2018 Farm Bill, other products, isolates, minor cannabinoids, and derivatives have emerged including CBG, CBN, Delta 8, and now delta 10; all of which require a way to accept payments in order to be sold.
Payment processing demand has picked up for both Delta 8 and Delta 10, and as of now, there are stable, US-based payment processors that do allow Delta 8 and Delta 10.
Credit card acceptance is emerging not only for retailers using POS systems like Clover, Lightspeed, and countertop terminals but also for online merchants who have tested, quality products and a sound legal footing.
Adding more positive news, these payment processors offer integration with most major carts and site builders including not only Shopify and WooCommerce, but also more challenging ones like Wix, Squarespace, Weebly, and GoDaddy, although the latter 4 site builders require a workaround like the one described on our Foxy cart info page.
What is Delta 10, and is it legal?
The popular, Seattle-based cannabis knowledge database and customer acquisition tool, Leafy.com describes delta 10 this way “Delta-10 is a cannabinoid found in trace amounts in the cannabis plant.” Additionally, they describe the legality as follows:
Is delta-10 legal?
Currently, delta-10 products are federally legal because they are derived from hemp, which was legalized in the US when Congress passed the 2018 farm bill. This is what makes delta-10 so appealing—consumers who live in states where cannabis is illegal can purchase delta-10 because it is technically derived from hemp and not cannabis. (Hemp is legally defined as a cannabis plant containing less than 0.3% delta-9 THC.) Although delta-10 is less potent than regular delta-9 THC, people can still get high from it, legally.
However, as is the case with delta-8, some states have taken it upon themselves to outlaw delta-10. Additionally, some delta-10 producers won’t ship to certain states if that state’s laws are unclear.
IMPORTANT NOTE: We are not attorneys. You must seek qualified legal advice before selling or shipping any regulated product including Delta 10.
Testing is essential when looking for Delta 10 payment gateways and merchant accounts
A CoA (certificate of analysis) showing not only legal levels of Delta 9 but also the levels of Delta 8 and Delta 10 among dozens of other trace elements and minor cannabinoids is required in order to obtain credit card processing – regardless of whether or not you sell in a brick and mortar environment or online. All traditional, US-based processors that allow cannabinoids will require a CoA.
Sources and resources:
Leafy on Delta 10: https://www.leafly.com/news/cannabis-101/what-is-delta-10/
How to read a COA and why it’s important: https://acslabcannabis.com/blog/retail/how-to-read-a-coa-and-why-its-so-important/
CBD online credit card processing guide: https://taskerpaymentgateways.com/selling-cbd-oil-online-101/
Cannabis Law Report – Delta 8, 9, and 10 explained: https://cannabislaw.report/confused-with-delta-8-9-it-gets-more-confusing-here-comes-delta-10/
Get a merchant account or payment gateway recommendation: https://taskerpaymentgateways.com/contact-us/
08/19/2021 Payment processing for cannabis seeds and kratom: interest spiking this summer
As interest in Delta 8 processing and CBD payment processing has remained somewhat steady, the demand for stable credit card processing that allows not only cannabis seeds and kratom but also integrates with popular shopping carts and web builders like Shopify, WooCommerce, and Wix has increased.
Cannabis seeds websites, and even kratom websites, do have options that allow for online credit card processing. Still, the number of payment providers is more limited. In addition, the integrations and setup can be more confusing.
Kratom’s legal status, which varies from location to location, along with payment processors’ fear that high-THC seeds could be marketed as low THC CBD seeds, adds to the challenges online business owners face. Therefore, we strongly recommend that all business owners who accept credit cards online for CBD seeds or kratom first sit with a qualified attorney to discuss the risks and what regulations they must follow.
Update 10/31/2021: If you would like to discuss your website’s options with a payment processing expert – free of charge – please reach out to us any time for free friendly advice. Fair warning though, at the time of this post we know of no stable, tested, solution for kratom or seeds.
06/07/2021 Conflicting CBD laws and regulations confirm the need for high-risk payment processing
In early 2019, prior to the massive CBD shut down by Elavon, many in the payment processing community – ourselves included – thought that it was only a matter of time before CBD payment gateways and merchant accounts moved from the realm of high-risk to that of traditional payments.
We expected CBD payments would rapidly become mainstream, supported by the major out-of-the-box providers like Stripe, Shopify Payments, and PayPal. We were wrong.
Due to the complexity and sometimes seemingly conflicting nature of local, state, and federal agencies, accepting credit cards for CBD is still best handled by a high-risk payment provider with specialized experience – and interest – in CBD processing. Additionally, CBD is prohibited by the biggest players in the US e-commerce space – Stripe and PayPal.
The Farm Bill opened up CBD payment processing to high-risk providers, but low-risk payment processors did not follow suit
When the 2018 Farm Bill launched legal CBD into the mainstream by creating a framework for hemp-derived CBD, it seemed as though it was only a matter of time before major payment processors followed suit. March of 2019, unfortunately, was a harbinger of things to come as Elavon – a major North American payment processor – shut down thousands of CBD and hemp-based merchants due to concerns of regulatory issues and compliance.
A major challenge for traditional payment processors like Stripe and PayPal is that there are numerous conflicting CBD rules, laws, and regulations at every level of government. The cost of monitoring these risks for a typical low-risk provider is simply prohibitive.
What about Square and CBD? Isn’t that a low-risk payment solution for online CBD?
For some, it may be – but based on the volume of inquiries we and our colleagues receive from recently shut down Stripe CBD merchants along with the numerous Reddit posts from Square merchants who have recently lost their accounts, it is worth tapping the brakes and digging a little deeper. For many business owners, Square may be a better solution for brick and mortar than for online CBD.
Complaints regarding Square’s CBD program seem to revolve around the additional fees they assess to CBD businesses, their perceived lack of easy tech support access when compared to a traditional CBD merchant account, and their restrictions on many common types of CBD products.
For CBD, high-risk processing through a flexible, well-informed agent is still the best path for many
CBD payment processing is still complex, and integrations – for example, processing payments on Wix, Squarespace, or Weebly, can be very confusing. For many, the no-cost expertise and advice gained from a high-risk payment professional can be of huge benefit.
Our core business is referring business owners that struggle with credit card processing to payment solutions, independent agents, and payment processors that will allow them to accept credit cards online.
We are paid by the agents and providers we recommend which allows us to perform it at no cost to business owners. You can read more about Tasker Payment Gateways LLC on our About Us page.
CBD payment processing
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04/29/2021 – CBD and the vape “mail ban” causing worry and confusion
With the recent updates to the PACT Act, which now includes vaporizers under the definition of “cigarettes,” many CBD and hemp merchants are worried that the wording of the Act may be interpreted as covering their products too.
Even though the primary purpose of the legislation is to help prevent children and underage teens from accessing nicotine-based vape products, it was written so broadly that CBD payment processors are also concerned with getting tied up in regulatory issues.
According to Filter magazine:
“Legal hemp and CBD-derived vapes are an unintended target of the broad language of the PACT Act amendment,” John Nathan, the president of the Massachusetts-based Bay State Hemp Company and a board member of the Northeast Sustainable Hemp Association, told Filter.
What is the status of CBD and hemp at the USPS?
Many merchants are currently awaiting implementation of the rule from the US Postal Service which determines whether or to what extent CBD or hemp ENDS products can be sent through the mail.
If, as expected, the new policy allows for exceptions to the mailability of the products covered under the “ENDS” designation (such as for business or testing purposes), mailers will have to submit an application in order to receive an exception.
Beyond the PACT Act, the USPS has existing rules relating to CBD
Even if some surprising last-minute heroics from the USPS rule-makers or Congress spare CBD from the impact of the PACT ACT, there are still significant documentation requirements in place that all CBD website owners using the postal service must adhere to.
In terms of merchant accounts for CBD, payment processors maintain diligent underwriting and regulatory compliance departments. This means that all online CBD businesses who currently accept or plan on accepting credit cards need to be prepared to document their compliance with federal, state, and local regulations – including those quoted below.
Guidelines from the USPS about the current mailability of CBD products, beyond the PACT Act:
CBD products. For hemp-based products containing CBD with a THC concentration not exceeding 0.3 percent, mailers must retain and prepare to make available upon request, records establishing compliance with all applicable federal, state, and local laws pertaining to hemp production, processing, distribution, and sales, including the Agricultural Act of 2014 and the Agricultural Improvement Act of 2018. Such records may include laboratory test results, licenses, and compliance reports. See Publication 52 section 453.37.
03/29/2021 Does the vape mail ban affect wholesale CBD companies?
Since Congress updated the PACT Act to include all vape-related devices, thereby banning the ability to ship any vape products by the postal service, there have been a lot of questions, including how the new regulations will impact B2B CBD vape.
Based on the proposed rules, the USPS mail ban does appear to have exemptions for vape wholesalers which is a small bit of welcome news for CBD businesses.
Are wholesale vape shipments exempt from the mail ban? https://taskerpaymentgateways.com/vape-payment-processor-updates/#03292021-are-wholesale-vape-shipments-exempt-from-the-pact-act-mail-ban
CBD payment gateways and merchant accounts: https://taskerpaymentgateways.com/selling-cbd-oil-online-101/
Vape payment gateways and merchant accounts: https://taskerpaymentgateways.com/electronic-cigarette-online-processing/
IMPORTANT NOTE: We are not attorneys. You must seek qualified legal advice before selling or shipping any regulated product, including vaporizers, e-liquids, or CBD
03/12/2021 Are cannabinoids like CBG isolates and CBN tinctures allowed by CBD payment processors?
Yes, the newly popular cannabinoid variations, specifically, oils, isolates, and tinctures containing CBG or CBN are allowed by payment processors.
Generally speaking, we have found that our same partners – that allow more traditional CBD products – also allow CBG and CBN.
What is CBG?
CBG, or cannabigerol, is a naturally occurring molecule found in the cannabis plant. As a product ingredient, CBD payment processors at this point have no concerns with CBG. Merchant account approvals should not be hampered by adding products that contain CBG as its legality is not a concern among CBD payment processors. Attorney, Vince Sliwosky, from Harris Bricken categorizes the legality of CBG this way:
“This domestic legal framework, alongside the fact that CBG can be lawfully produced and extracted from hemp under the 2018 Farm Bill, seemingly gives CBG a viable legal runway. Of course, everything here is conditioned on manufacturers and sellers steering clear of unapproved health claims.”
What is CBN?
CBN, or cannabinol, is a little different than CBG and CBD in that CBN is not naturally found among the myriad of compounds within the cannabis plant. CBN is created by a heat reaction when THC is transformed into a less psychoactive substance. Here is Vince Sliiwosky’s take on the legality of the substance, again from the Harris Bricken law firm’s website, which is nearly identical to his comments on CBG.
“This domestic legal framework, alongside the fact that CBN can be lawfully produced and extracted from hemp under the 2018 Farm Bill, seemingly gives CBN a viable legal runway. Everything is conditioned on manufacturers and sellers steering clear of unapproved health claims, of course.”
As of now, CBD payment gateways and CBD merchant account providers are approving CBD websites that also offer CBN as easily as those that do not.
02/23/2021 Will the PACT/Jenkins Act regulations impact online sales of vape CBD?
Yes, it will affect CBD vape, but we do not believe it will hurt the ability of traditional online CBD websites to accept credit cards for, and ship, CBD products in the US.
Most industry insiders we have spoken to expect the March 2021 expansion of regulations that affect ENDS products to effectively end the online sale of CBD vape – or at least drastically impact it – while thankfully still allowing other CBD products to be sold online.
The expanded PACT act prohibits the mailing of and vape components, even parts unrelated to nicotine, from being shipped by USPS. This, on top of prohibitions by UPS, and FedEx, along with numerous additional, and onerous clauses means that the era of small resellers accepting credit cards online for vape, even CBD vape, is likely coming to a close for most merchants, especially ones that do not have the ability and resources to navigate the miles of red tape created by Congress.
Who would have thought that the Jenkins Act, first passed in 1949, would have sweeping and crushing effects on the Internet CBD business in 2021? Well, unfortunately, that’s where we are. Buried in the thousands of pages of legislation that surrounded the most recent round of stimulus, congress passed an incredibly broad expansion of the 2009 PACT Act, which in itself expanded the 1949 Jenkin’s Act.
Based on this, we expect that CBD payment processors will soon stop accepting applications from online CBD businesses that also sell vape products. The online sale of CBD in general though appears wholly unaffected by this law and payment gateways and merchant accounts for online CBD are still readily available to US merchants.
Listed below are the items that are newly covered by this more than 70+-year-old law originally designed to assist states with the taxation of cigarettes. This new law is so broadly written that it appears to clearly cover CBD vape. For online smoke shops, the only positive, besides the exclusion of traditional CBD products, is the fact that premium cigars also appear to be spared from the vape mail ban and other new requirements included in the revised act. Keep in mind, we are not attorneys. We can provide payment processing advice for CBD websites, but not legal advice. You should consult a qualified attorney with any questions.
ELECTRONIC NICOTINE DELIVERY SYSTEM.—The term ‘electronic nicotine delivery system’— ‘(A) means any electronic device that,
through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device;
‘‘(i) an e-cigarette;
‘‘(ii) an e-hookah;
‘‘(iii) an e-cigar;
‘‘(iv) a vape pen;
‘‘(v) an advanced refillable personal vaporizer;
‘‘(vi) an electronic pipe; and
‘‘(vii) any component, liquid, part, or accessory of a device described in subparagraph (A), without regard to whether the component, liquid, part, or accessory is sold separately from the device
PACT Act 2021 expansion (page 5137): https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-116HR133SA-RCP-116-68.pdf
Original PACT Act, 2009/2010: https://www.congress.gov/111/plaws/publ154/PLAW-111publ154.pdf
Jenkins Act 1949: https://www.govinfo.gov/content/pkg/COMPS-1587/pdf/COMPS-1587.pdf
Attorney Rod Kight: https://cannabusiness.law/new-law-restricts-online-sales-of-hemp-and-cbd-vapes/
02/03/2021 The newly expanded Prevent All Cigarette Trafficking Act will impact CBD vape
Congress has recently passed the expanded Prevent All Cigarette Trafficking Act which may severely impact merchants that also plan on selling vape-related CBD products. Because this act is new and has not even gone into effect yet, we strongly recommend that anyone currently selling, or planning on selling vape products, including CBD, consults with a qualified attorney as soon as possible.
Due to the complex restrictions and ever-changing regulatory environment, we feel that qualified legal counsel is essential. We also expect payment processors to react to this new law rapidly and feel that online merchants should plan on payment processing restrictions as they relate to selling vape online.
Although CBD is not explicitly mentioned, the verbiage of the law appears so broad that virtually any vape-related product of any kind will likely face challenges, not only from a regulatory standpoint but also a payment processing one. Here is a good article on what vape merchants need to know from the well-renowned legal blog, JD Supra.
We will work to stay up to date on this topic and post updates as they become more clear.
01/08/2021 CBD merchant accounts reign supreme as cryptocurrency payments for CBD sputter into 2021
For most “non-CBD” Internet businesses, the biggest challenges are fairly universal: generating website traffic, finding or producing products that can be sold at a healthy margin, handling shipping, and maintaining an e-commerce site. Getting paid, for most non-CBD businesses, is as simple as setting up an out-of-the-box payment gateway like Stripe, PalPal, or Shopify Payments.
Because payment processing is so easy for most e-commerce merchants, the thought of dealing with cryptocurrency rarely enters the discussion. For start-up CBD merchants, though, the idea of an instantly approved cryptocurrency payment gateway is alluring – especially if it is set up in a way that reduces shopping cart abandonment.
CBD merchant interest in crypto was based on the dream of a seamless checkout
For online CBD businesses, the biggest question is fundamental. “How do you accept credit cards online for CBD?” As this ongoing CBD payment gateway news page has documented, setting up a merchant account for CBD requires knowledge of the right shopping carts, payment gateways, and merchant accounts. Even then, it can be challenging for CBD start-ups to accept credit cards.
The realization that Stripe, Shopify Payments, and PayPal do not generally support CBD often occurs after business owners and developers have already built their CBD websites. This causes businesses to seek out alternative payment methods like high-risk aggregators, multi-pay solutions, and cryptocurrency.
The ability to successfully market and sell CBD online by accepting BitCoin or other cryptos has started and stuttered throughout the past year – and, as we move into 2021, things appear to be sliding backward for crypto processing and forward for traditional high-risk CBD merchant accounts.
Accepting “only crypto” at checkout destroys an e-commerce website’s conversion rate as it scares off the majority of buyers. The cart abandonment issue has caused crypto payment providers to try and marry the instant and ubiquitous merchant account approval features of accepting crypto with the ease of use that most CBD customers require. To meet this goal, there have been a few “instant conversion crypto payment gateway” models that, unfortunately, have not produced on their promises.
The goal of these hybrid CBD cryptocurrency payment gateways was simple – allow customers to pay with a credit card – use that transaction to seamlessly purchase crypto, which is then converted back to US dollars and passed on to the merchant. To the end-user- it feels like they are buying something with a credit card. For a time, based on research and feedback from the CBD community, it appeared as though this unorthodox process was working for some, although never near the point where we were comfortable discussing it on this CBD payment gateway update page.
It appears that in late 2020 and early 2021, banks began catching on, and it has garnered scrutiny. Based on our discussions, merchants that tried this method are finding that although their customers can pay them, their payment processor’s bank is often holding their funds. Their dream of seamlessly converting crypto to US dollars has vanished – just as most alternative CBD payment methods do.
A traditional high-risk CBD merchant account is still the most reliable way to accept credit cards
Like most things, there is no shortcut when selling a regulated product like CBD or hemp online. In order for a CBD merchant to accept credit cards on a major platform like Shopify, WooCommerce, BigCommerce, Squarespace, Weebly, or Wix, CBD websites need to go through the proper steps – this involves a professional website, certificates of analysis (CoAs), clear terms and conditions, a well thought through policy on health claims, and the financial ability to promote your CBD products.
Learning what is required to set up a high-risk merchant account and CBD payment gateway can be less stressful if you work with a partner, like Tasker Payment Gateways LLC, to ensure that the CBD payment processor you choose integrates with your existing website.
We recommend you read our CBD Payment Gateways and Merchant Accounts 101 page if you have not already, and review our High-Risk Payments Resource Guide for information on integrating your site builder and shopping cart with a high-risk payment gateway and merchant account. As always, you can also reach out to us anytime for free friendly advice.
Crypto processing for CBD works – if you expect your clients to be comfortable paying in crypto
This is the key. Cryptocurrency CBD payment gateways and payment processing integrations do exist, but not in a seamless way. For online CBD customers that are used to paying with a credit card, crypto payments simply do not work well – if at all.
If you feel like cryptocurrency could add to your conversions by supplementing a traditional high-risk CBD payment gateway, then it may be a fit for you; if not, you need to work with a reliable partner to set up a high-risk payment gateway that allows online CBD and hemp. Feel free to reach out to Tasker Payment Gateways LLC anytime for ideas and recommendations.
11/20/2020 CBD payment gateway choices for Wix, Weebly, and Squarespace continue to improve
The ability to set up a CBD-friendly payment gateway, along with a CBD merchant account on the back end that makes it all work, has gotten easier for business owners that use Wix, Weebly, and Squarespace.
If you are wondering why we are highlighting these site builders, here is a little background: Wix, Weebly, and Squarespace do not offer a built-in solution that allows CBD.
Luckily, a lack of built-in CBD payment gateway choices does not mean you cannot accept credit cards for hemp and CBD. What it does mean is that website owners need to utilize plug-ins or widgets that allow them to expand their high-risk payment gateway options by swapping out their site builder’s native cart using a 3rd party shopping cart.
Over the years, we have learned two ways to accomplish this by using one of two 3rd party carts, both of which come with added features that some site owners really come to appreciate.
The two main ways to process CBD on Squarespace, Weebly, or Wix: Ecwid and Foxy
The choice as to whether Ecwid or Foxy is the best way to expand your payment gateway integration options sometimes depends on which CBD credit card processor you decide to work with. Some processors integrate with gateways that work well with Foxy, and others have direct plug-ins with Ecwid. Regardless, finding homes for CBD sites looking to accept credit cards on either of these 3rd party carts has gotten easier over the past few weeks.
More processors are coming on board, and the existing processors are improving and streamlining their solutions. We expect this trend to (hopefully) continue as CBD becomes more mainstream. As it stands, CBD payment acceptance for sites built on Wix, Weebly, or Squarespace is better than it has been in years. Encouragingly, GoDaddy site builder also integrates with Foxy.
If you would like a CBD payment gateway and merchant account recommendation for either Wix, Weebly, or Squarespace, contact us anytime.
10/05/2020 More options for online smoke shops looking to expand into CBD
A positive trend in late 2020 has been the willingness of some traditional head shop or smoke shop, payment gateways, and merchant account providers to allow their e-commerce business clients to also sell CBD online. Until very recently, the payment providers were very much “firewalled.”
This separation often meant that an established smoke shop site would have to create an entirely separate website and also take the time to ensure there was no interlinking.
Want to add CBD to your smoking accessory website? Make sure all your providers are on board
Although the ability to combine niches has improved dramatically, to the point where a site owner can offer CBD, pipes, glass, bongs, and even vaporizers and cigars on one website, it does not mean that all providers allow all products.
We still recommend that all business owners looking to expand into CBD not only consult their attorney but also request a free one on one consultation with one of our independent agents so they can go over the payment gateway, merchant account, site builder, and shopping cart integration together. You can read more about us and what we do on our about us page.
Many headshop-friendly payment processors are still prohibiting CBD, and those that do allow CBD on a head shop website require prior approval.
04/14/2020 Hemp seed e-commerce emerges, and brick and mortar stores move online
With the world reeling from the largest health emergency in over 100 years, CBD and hemp businesses find themselves adapting and reacting.
Main street CBD goes online, and the benefits may be long-lasting
The past couple of weeks have seen an uptick in inquiries from retail CBD stores, pipe and glassware shops, and brick and mortar vape outlets hoping to recover some lost sales by opening e-commerce websites.
One theme surprises us. A lot of the B&M businesses we assist with CBD payment gateways and merchant account recommendations are starting a website only to cater to their regular clientele.
These businesses often have little or no online experience, and the thought of marketing to the entire US (or Canada) sometimes does not even occur to them. They want to help their “regulars” in a safe way and stay in business. That’s it.
We believe that a lot of the savvy retail business owners that are new to online sales will end up with a healthy, wide-reaching online customer base that they will maintain long after their storefront doors reopen.
Hemp seed e-commerce is coming into its own
Like many other things in this crazy year, hemp and CBD is feeling the effects of a newfound desire, or need, for self-sufficiency.
Millions of Americans are learning how to bake bread, teach their kids new math, and manage Zoom meeting etiquette. Additionally, many people are discovering the value and the feeling of comfort that comes with small-scale gardening and farming.
Because of this, we are seeing a growth in the number of sites that are marketing CBD hemp seeds for home growing operations. In addition, we are hearing from online businesses whose focus is industrial hemp farming supplies, cannabis equipment, and even edible seeds.
One thing we’ve learned over the years? Hemp seeds are far more complicated than one would expect. Feminized seeds for high yield CBD flowers, Federal Seed Act compliance, and food-grade hemp seeds are all conversations that are popping up now more than ever.
04/02/2020 The CARES Act & the SBA: Do CBD businesses qualify for loans and grants?
With the passage of the 2.2 trillion dollar CARES Act, which was signed into law by the President last week, we have received a lot of questions about the $377,000,000.00 allocated to small businesses and whether or not it applies to CBD businesses.
Additionally, we have read a ton of confusing information out there regarding the “up to” $10,000 emergency payments to small businesses and the PPP loans – which in some circumstances do not need to be repaid at all.
Below are links to a handful of reputable online resources. We hope this helps you and your online CBD business navigate these uncharted waters.
The answer appears to be YES. According to long-standing guidance first issued by the SBA in April of 2018, legal, hemp-derived, Farm Bill compliant CBD businesses are allowed to take advantage of SBA programs.
We have not seen any information contradicting this guidance in the CARES Act, and the SBA’s guidance is still available on the SBA.gov website. This does not include activities that are still federally illegal.
Where can CBD businesses learn about the different small business programs available through the CARES Act?
There is a lot of information out there on The CARES Act, and much of it is a bit confusing and sometimes contradictory.
Let’s sort this out.
- The Small Business Administration guide on PPP. The SBA’s outline of the PPP, or Paycheck Protection Program discusses ways in which these loans can be forgiven. Below is a relevant section that discusses loan forgiveness.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
- The United States Senate’s guide on the CARES Act. The US Senate’s CARES guide looks like it’s well put together. It outlines some key aspects of the law, including the $10,000 advance that does not need to be repaid. Below is an excerpt.
Economic Injury Disaster Loans & Emergency Economic Injury Grants
These grants provide an emergency advance of up to $10,000 to small businesses and private
non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury
Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the
advance. The advance does not need to be repaid under any circumstance, and may be used
to keep employees on payroll, to pay for sick leave, meet increased production costs due to
supply chain disruptions, or pay business obligations, including debts, rent and mortgage
- The United States Chamber of Commerce Coronavirus FAQs. The US Chamber has put together the answers to 10 common Corona relief small business questions and answers. Their FAQs cover important issues like whether or not self-employed business owners qualify. The FAQs include both Emergency Disaster Loans/Grants and Paycheck Protection Loans. Here’s a sample:
What loans are available to help small businesses during Coronavirus?
– The Economic Injury Disaster Loan from the Small Business Administration (SBA).
– The Paycheck Protection Loan (Part of the CARES Act).
- United States Treasury PPP Fact-Sheet. The US treasury has an online PDF that goes over the details of the Paycheck Protection Program. It details loan qualifications, historical requirements that are being waived for this program, what qualifies as payroll, and a lot more. Below is a sample section that talks about interest rates for any non-forgiven portions, personal guarantee waivers, and collateral.
What is my interest rate? 1.00% fixed rate.
When do I need to start paying interest on my loan? All payments are deferred for 6 months;
however, interest will continue to accrue over this period.
When is my loan due? In 2 years.
Can I pay my loan earlier than 2 years? Yes. There are no prepayment penalties or fees.
Do I need to pledge any collateral for these loans? No. No collateral is required.
Do I need to personally guarantee this loan? No. There is no personal guarantee requirement.
***However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue
criminal charges against you.***
- Cooley LLP. Cooley is one of America’s most prominent law firms with hundreds of attorneys. They have put together an overview of SBA Programs Under the CARES Act that discusses who qualifies. Their section on salaries and sole proprietors may be especially helpful to small businesses. In part, it states:
What costs are included in “payroll costs”?
Payroll costs include the total amount of any compensation to (1) employees in the form of a salaries, wages, commissions, cash tips, payments for leave, severance, group health care benefits, retirement benefits, or state or local taxes assessed on employee compensation, and (2) a sole proprietor or independent contractor in the form of wages, commissions, income or similar payments not to exceed $100,000 per sole proprietor or independent contractor in one year prorated for the covered period.
We are not lawyers and cannot provide any advice on whether or not you should pursue these options. You should always seek qualified legal advice. What we can do, though, is provide expert payment gateway and merchant account recommendations to any CBD business owner that needs to accept credit cards online. Contact Tasker Payment Gateways LLC to get started.
03/12/2020 With Bank of Albany tightening, will others fill the CBD payment processing void?
After the Elavon CBD processing shutdowns in 2019, thousands of CBD start-ups, in addition to established businesses, found themselves with no way to accept credit cards. Thankfully, other processors stepped in to assist new and established CBD site owners with payment processors.
A bit of background: The payment processing world operates through a network of independent sales organizations, or “ISOs,” that in turn contract with sponsor banks. In the case of Elavon, their sponsor bank was US Bank, of which Elavon was also a subsidiary.
In the post-Elavon world, many credit card processing companies have aligned themselves with a well-respected financial institution based in Texas. This sponsor bank is commonly referred to by agents, ISOs, and CBD businesses as “Bank of Albany” or “Albany.”
What has changed with Albany’s CBD startup processing?
After speaking with dozens of CBD website owners and payment processing professionals this week, this is what we have learned: Bank of Albany seems to be still allowing CBD websites, but they have tightened their underwriting.
Our take is this: Albany appears to be a reliable, trustworthy solution for many businesses, but they likely became overwhelmed by the volume of CBD merchants entering the market and decided to pull back a little, at least for now. Unlike more established industries, CBD is relatively new, and this means there is a more significant amount of start-up activity compared to other product types.
If you would like to be introduced to an agent that places business with Albany, among other CBD payment processing resources, let us know.
How do the changes made at the Bank of Albany affect CBD site owners?
In practice, it means they are becoming pickier and are only taking established, predictable CBD sites with a stable processing history.
Also, from what multiple sources have told us, Albany’s ISOs are issuing termination notices to some CBD companies. Apparently, terminated merchants were approved for processing over the previous year or so but had not yet launched their business or begun accepting online sales.
Luckily for businesses entering the world of accepting credit cards for online CBD sales, there still are multiple options, even for start-ups.
January has been a great month in terms of our ability to recommend stable payment processors to CBD website owners looking to get started selling online. In this ongoing “online CBD payment processor” update post, we work to provide news and tips to CBD site owners in a clear, helpful way and address common questions when we notice a trend.
This month, questions about the Authorize.Net payment gateway and CBD have been frequent; therefore, we want to address them.
The short answer is yes, but as with many high-risk payment gateway questions, the short answer can be misleading and can cause business owners real trouble.
Here’s why. Authorize.Net is, at its core, a payment gateway. A payment gateway simply “connects” a merchant account to a shopping cart, like Shopify, WooCommerce, PrestaShop, or via a 3rd party like Foxy or Ecwid, to “drag and drop” site builders like Wix, Weebly, or Squarespace.
The distinction between a payment gateway and a merchant account (often called a credit card processor) is often vague. Compounding this is the fact that if one visits Authorize.Net’s website, there is an option to get an all in one solution that includes both a merchant account and a payment gateway – but not necessarily a CBD merchant account.
The software, or payment gateway piece, Authorize.Net, has historically worked very well for site owners when connected to a CBD-friendly merchant account. Often, and unfortunately, site owners do not realize this and end up with a payment gateway connected to a processor that will not allow CBD sales.
For an Authorize.Net payment gateway to work for a CBD oil site, it also needs high-risk processing set up on the “back end.” (Contact us anytime to learn more.)
Admittedly, pairing site owners looking to accept credit cards online with a stable payment gateway and processor is what we do for a living, so we do have a bias. That aside, the only reliable way to accept credit cards online for CBD oil, or other hemp products, is to work with someone that understands which credit card processors are the best fit for your CBD site based on your product type and your website software.
We find that speaking with a vetted, independent payment processing agent is best. Once they fully understand what you are looking for and how they can help, they will then move forward with setting you up with Authorize.Net and connecting it to a CBD merchant account provider that works for you. They also add no direct cost as they, like us, are paid by the processors and gateways – not by you.
If you would like to know more about the CBD payment gateway setup process, please read our “Selling CBD on-line 101” post; it goes over all the specifics. And, as always, please contact us for a CBD merchant account recommendation- we are always happy to help.
12/13/2019 Which banks offer CBD business checking accounts?
One thing that surprises many new CBD site owners is that there are still hurdles when setting up a CBD-friendly business banking account. Luckily, that trend is moving in the right direction.
Twelve months ago, obtaining a checking account for a CBD business was extremely difficult. Now, with the passage of the 2019 Farm Bill, which loosened industrial hemp regulations, among other items, online business checking accounts for CBD are easier to come by. The final passage of the SAFE Banking Act should speed this positive momentum even further.
Over the past week, we have spoken with independent agents that have gathered a list of CBD-friendly banks that offer straightforward checking account set-ups. Conveniently, some of these banks can do the whole thing through email and online, and it only takes 2 – 3 days, typically.
If you would like a CBD business checking account, payment gateway, or a merchant account recommendation, drop us a note using our contact form by clicking here, and we’ll get you the information you need to get started.
12/06/2019 High-risk + high-risk does not always equal higher risk when it comes to CBD and MLM’s
2019 is ending on an excellent note for CBD sites in need of processing. A little more than six months ago, thousands of CBD web-sites on WooCommerce, Wix, Weebly, Shopify, and Squarespace, among others, were dropped by Elavon and left without a way to take credit cards.
The aftermath, for many of these affected CBD businesses, was awful. Many ended up submitting a half dozen or more CBD merchant account applications only to wait months to find out they were declined or that their new solution had so many challenges that operating a business was nearly impossible.
Now, in December, there are multiple, stable, US-based solutions allowing CBD sites.
CBD MLM merchant accounts
Nothing demonstrates the dramatic improvement in the CBD payment gateway industry more than the fact that CBD MLM’s now have reliable US credit card processing options too.
MLM’s are considered a high-risk industry by payment providers – as is CBD – so the ability to recommend solutions to site owners that offer a CBD-based MLM is something we did not expect to see so soon.
11/26/2019 Selling CBD? Consult a qualified attorney – please. FDA in the news
The FDA is making some news. In this installment of “CBD payment gateway news,” we discuss legal advice and selling CBD the safe way. Earlier today, the FDA issued a statement that they have sent warning letters to 15 CBD companies informing them that what they are doing violates the Food, Drug, & Cosmetic act. You can read more about it on Forbes.com.
Don’t set yourself up to fail
There is no better way to wreck your holiday season than to find yourself in a headlock from the long arm of the law, so, please…. before you sell any regulated product, get a lawyer. Before you add any new regulated product types to your website, get a lawyer.
We are not attorneys, we don’t play one on TV, and we certainly do not give legal advice on the Internet. But, we do try to keep up to date on the CBD industry and work hard to keep our readers informed. A quick search of this site for the word “attorney” comes up with a minimum of 11 pages, with dozens upon dozens of references on topics ranging from cigar payment gateways to vape to CBD.
Why are we so repetitious about this? Because… again.. we are not lawyers, and if you are going to sell online, you need to make sure you are not breaking the law. Don’t get legal advice from a website; sit down with a trusted lawyer who knows CBD.
11/22/2019 The list of shopping carts that work for CBD is growing
We hope all our readers have a turkey in their freezer, canned cranberry sauce in their pantry, and are fully prepared for Thanksgiving! We want to pass on a little good news that CBD site owners can be thankful for before this upcoming holiday week.
Over the past year, since the Elavon pull-out, CBD e-commerce has been in flux, especially when it comes to finding a CBD payment gateway that works for all the popular carts. As we have discussed below, though, the situation continues to improve.
We have spent some time this week speaking to independent agents and providers, and we have come up with a list of popular shopping carts and site builders whose users have been able to successfully set up credit card processing for CBD in the past week.
This list is not comprehensive, but it covers most of the big ones.
- Foxy.io / Foxy cart
As always, if you would like a CBD payment gateway and merchant account recommendation, we can help.
11/12/2019 CBD merchant account approvals: doc prep and site work
November has been a busy month, and CBD processing, as always, is ever-changing.
First, the good news: every day, we are seeing more CBD site owners approved for a payment gateway and a merchant account that works for their products and with their shopping cart.
Now the harder part: approvals this month are, at times, requiring a more careful and thorough preparation of documents and more careful website updates than ever before.
Over the past week, we have seen a consistent theme – more documents are required, and fewer website deficiencies are acceptable. Below is a sample of some of the website requirements we are seeing some processors implement, and below that are some of the documents those CBD merchant account providers commonly request.
NOTE: Not all the site requirements and documents below are needed for all processors. If you need help accepting credit cards for CBD, let us introduce you to an agent who can assist. Contact us here to get started.
Common website requirements for online CBD processing
- Shipping Policy
- Refund Policy
- Terms & Conditions
- Visa & MasterCard Logos
- Contact Us link including phone number, email, and city, state & zip
- Photos of all products being sold Pricing for all products must be clearly shown
- Must have age verification upon entry or at checkout on the site
- Certificates of Analysis for products must be posted on the site
- Customers cannot make product claims specific to ailments (for example, stress or anxiety)
- A disclaimer stating “no THC” or “xx.xx% THC content or less” must be posted on the site
Lastly, many CBD processors require websites to have an FDA Disclaimer; here is an example:
The statements made regarding these products have not been evaluated by the Food and Drug Administration. The efficacy of these products has not been confirmed by FDA-approved research.
These products are not intended to diagnose, treat, cure or prevent any disease. All information presented here is not meant as a substitute for or alternative to information from health care practitioners.
Please consult your health care professional about potential interactions or other possible complications before using any product.
The Federal Food, Drug, and Cosmetic Act requires this notice.
Examples of documents that may be required to accept credit cards for CBD
Again, this list does not apply to all processors, so please reach out to us if you need help getting started or if you need a CBD payment gateway and merchant account recommendation. Some processors do require all or nearly all of these items, so if you are planning on applying soon, it does not hurt to familiarize yourself with the list of possible documents below.
- Articles of Incorporation or Organization
- Operating Agreement for LLC OR By-Laws for Corporation
- SS4 or 147C IRS EIN letter (If you don’t have this, it’s fast and easy to get from the IRS — call
- the IRS Business & Specialty Tax Line toll-free at 1-800-829-4933, or contact us for more details)
- Business license (If selling a product that requires a license)
- Voided Check OR signed & dated Bank Letter
- 3 Months most recent Processing Statements
- 3 Months most recent Business Bank Statements
- Current business utility bill in DBA or Legal name with business address
- Personal utility bill confirming owner(s) home address
- Copy of Driver License or Government-issued ID
- Domain registration screenshot verifying domain ownership
- COA (Certificate of Analysis) for every CBD or hemp product sold. Also known as lab result/test
- Export of all products sold on the site
- Any fulfillment center or 3rd party call center agreements (If you handle fulfillment, let me know)
10/31/2019 CBD payment gateway updates: multi-pay still working well for many, traditional solutions are opening up, and approval times are getting shorter
Happy Halloween – we are delighted to say that for many, CBD processing has become a lot less scary lately. Here’s a rundown of the most impactful CBD payment topics we have been discussing with site owners this month.
For many site owners, integrating via one of the “big dog” high-risk payment gateways like Authorize.Net or NMI is a far simpler solution. Unfortunately, for smaller CBD site owners, this has been challenging since Elavon dropped out of the CBD market in the spring of 2019. Lately, we have seen movement on this front.
Using either a high-risk Authorize.Net integration or an NMI gateway is important to many business owners for many reasons. Shopify CBD merchants, for example, are limited to either a processor with a direct Shopify plug-in or processors that allow Authorize.Net integration. This is due to Shopify’s somewhat limited payment gateway options and the restrictions around Shopify’s version of Stripe – called Shopify payments. BigCommerce merchants often prefer NMI, and a site owner that has stored recurring billing info in either Authorize.Net or NMI will often want to retain that functionality without having to transfer data.
New options (and old options that are new again)
We have seen 3 “new” traditional, US-based, Authorize.Net, and NMI compatible CBD solutions open up this month. We put “new” in quotes as 1 of them is a processor that is accepting new applications again after a long hiatus. The distinctions between these new processors revolve mostly around underwriting criteria, cost, products allowed, and their willingness to accept smaller businesses.
Monthly fees, not including separate gateway fees charged for the Authorize.Net or NMI piece, run from as low as $0 per month to over $100 a month, and the types of products allowed range from hyper-restrictive “topical only” solutions to processors willing to accept a full range of oils, tinctures, and other ingestibles. Not surprisingly, some of the less expensive options often require either bank balances exceeding $5,000-$10,000 or prior processing history. But, for smaller, less capitalized folks, the somewhat more expensive options are still a way for them to establish themselves and, over time, negotiate better rates.
Approval times are getting better
Approval times for both traditional and non-traditional CBD processors were historically terrible earlier this year. Some site owners were forced to wait literally months before they were able to find, and get approved for, suitable CBD processing. One very positive development we see this month is the dramatic improvement of CBD merchant account approval times.
We are seeing CBD site owners get approved for merchant accounts and payment gateways relatively quickly, often in less than two weeks. Non-traditional credit card processing solutions are sometimes approving CBD sites in as little as a week.
CBD payment processors are integrating very well with a host of shopping carts like Shopify, PrestaShop, WooCommerce, Wix, Weebly, and Squarespace – although depending on the solution – integration sometimes requires an additional software piece – like Foxy or Ecwid.
10/04/2019 “What does ‘multi-pay CBD option’ mean?” and “how do I sign up for Square’s CBD beta program?” dominate the questions we’ve received lately
The first week of October has ….so far… been one of the best we’ve seen for CBD site owners since Elavon was in the CBD business last spring. We are seeing a lot of businesses find suitable CBD processing and start to move the inventory they have built up since the Elavon CBD fiasco. We hope this trend continues. Here are the highlights and some “how to’s”:
What is multi-pay checkout processing for CBD?
Multi-pay, also known by many other names, like split-pay, flex-pay, or easy-pay, is a really interesting solution that’s come about lately. This solution is VERY CBD friendly as it allows virtually any legal form of CBD out there. Additionally, it integrates seamlessly with WooCommerce and Shopify, and – via ECWID, works with limited functionality for Wix and Squarespace sites too.
Multi-pay credit card processing solutions can also work alongside traditional processing too, meaning both options could appear at your checkout.
Multi-pay has been working well for CBD folks. It integrates with standard carts and, with full integration, auto-populates a simple multi-pay option (often a four-pay) showing what the payments would be – alongside the products before they are added to the cart.
It creates a familiar, straightforward, interest-free, multi-pay like many folks are used to seeing online or on TV shopping channels.
Online shoppers see a “4 easy payments of …” amount and are instantly approved for easy pay purchases. Because multi-pay works well with Shopify and WooCommerce, it’s been very popular. Contact us anytime for details or for a recommendation on a CBD-friendly multi-pay solution.
Here’s some feedback we have heard from folks who use a multi-pay CBD solution as their only processor:
- Set up is straightforward as the provider does the integration for free.
- Costs are low, especially fixed monthly fees.
- Without a detailed explanation of the payout process clearly listed on your site, there can be some checkout confusion when multi-pay is your only processing option. Our partners have sample verbiage that converts well. Feel free to contact us for recommendations
- Site owners are happy with the payouts as the business is paid their money in full, net fees, even when customers pay by credit card over time.
- Business owners find their average sale amount generally goes up when customers can split their payments.
In addition to being a stand-alone solution, it also can exist alongside other processing solutions, such as the Square CBD Beta program discussed below.
Square’s CBD beta program
So far, we’ve heard ok feedback from a handful of folks using the Square beta CBD program. It can be tricky to get into and has some restrictions, but for those using it, it works. Here are some highlights:
- The “easy” integration options feel pretty limited. WordPress folks and, interestingly enough, Sticky.io, formerly LimeLight CRM, users appear to have the easiest path to integration as those solutions have the Square API as a “native solution,” meaning it is built into their platforms and does not require additional layers of software.
- Allowed CBD product types are a little limited. Items like vape, e-liquid, flower, etc., are completely off-limits.
- Support is “virtual.” We have heard that getting live human support is a challenge, but often Square’s program is “referred” by a payments pro who generally can provide a layer of support without adding any significant cost – or any at all – depending on the situation.
- Shopify integration is possible, but we recommend working with a company familiar with the integration process as the Shopify/Square connection for CBD is not intuitive and requires workarounds that can be costly. Contact us for a referral.
08/13/2019 Topical CBD, high volume USA CBD sites, and Canadian CBD businesses are all hot topics
As the ever-changing world of CBD merchant accounts continues to….. well… ever change… we are hearing some consistent themes, and for the most part, the trends feel like they are going in the right direction.
The good news we are hearing so far this month:
Topical CBD vs. ingestible CBD and tinctures- It has long frustrated site owners that sell CBD creams and skincare products that they were classified at the same risk level as CBD merchants selling products designed to be ingested. This seems to be changing- to the point where some CBD oil merchants are marketing their product not as an ingestible, but rather as a topic oil. We recommend ALL CBD site owners consult an attorney and ensure that their products and their marketing are well within the current regulatory structure, but for site owners that do sell true, topical-only, CBD, the payment gateway market feels stable. This is good news.
Canadian CBD merchants selling to Canadians in Canadian dollars- This type of account has really matured, it feels. Canadian site owners that need a payment gateway to accept CAD from Canadian clients are now, for the most part, able to accept credit cards in a fairly straightforward way.
Large US CBD sites selling to US clients- Much to the frustration of smaller CBD business owners, the options available to stores and websites selling more than $50k per month is still more diverse and generally less expensive. The processors are – believe it or not- still digging out from the rubble of the Elavon shut-downs and many of them still strongly prefer established business with credit card processing history showing $50,000 per month in processing. Over the past few months, there have been many processors that “opened up CBD processing” to larger merchants- often to abruptly stop accepting applications almost immediately – sometimes with little or no communication to the site owners or merchant account agents caught up in the policy change. We hope this recent trend of stable solutions for larger merchants remains stable. As for new sites, there are still options for start-ups, just not as many.
Zen cart, cube cart, and CBD payment gateways seem to be playing well together. In addition to WooCommerce, which has been leading the way in terms of flexibility, both Zen Cart and Cube Cart have some CBD-friendly integrations we have heard some good things about. Shopify does as well, but that integration, like many others, is imperfect for CBD but functional.
- Card association audit talk and a lack of all card types for many processors- One item that seems to still be a real issue for some processors is the ability to accept all four major card types for extended periods of time. It is often described to merchants as an “audit” by a card brand, and disruptions are usually temporary – but they also often come with additional restrictions. Regardless of the reasons, it is still an issue, and many e-commerce merchants are patiently awaiting the green light from their processors that they can accept all major US credit card brands again. This tends to affect “start-up friendly” processors more than those few processors working with larger, more established CBD businesses.
Need CBD payment gateway and merchant account advice?
If you are a CBD site owner that would like to speak with a vetted, independent CBD payment gateway specialist, please contact us here for a recommendation.
07/17/2019 Retail, wholesale, and major cart credit card acceptance feels more stable
After the big Elavon shut down in March of this year, the CBD market, in terms of payment gateways and credit card processing, was in real turmoil. The news changed daily, and providers struggled to not only keep up with the flow of applications but also to interpret the requirements of their processors and sponsoring banks.
Many well-meaning brokers, agents, and processors inadvertently gave out payment gateway and credit card processing information that ended up no longer being accurate by the time it was delivered.
The situation appears to be improving – albeit slowly. Although the CBD payment gateway market is still developing – and is not nearly as established, affordable, or predictable as other payment gateway verticles – like smoking accessories, vape, or cigars, for example, there has been a small but noticeable slowdown in the rapidness of changes in the CBD payments arena.
Based on our many ongoing conversations with CBD site owners, merchant account brokers, and site developers- a few areas, in particular, seem to have become somewhat more reliable and consistent.
Here are some highlights of what we are hearing this week:
- Retail – brick and mortar businesses that accept chip or swipe transactions are having an easier time finding traditional terminals and the back-end processing that goes with it.
- Wholesale CBD websites – e-commerce CBD sites that sell to retailers and other e-commerce merchants are able to find solutions that allow for emailed invoicing, credit card payments, and ACH’ed invoice payments
- Major card and site builder consumer CBD websites (“normal” CBD sites) – business owners that sell CBD oils, soaps, lotions, and other common CBD products online are still greatly affected by the site builder they use. Accepting credit cards for CBD is far more straightforward when using a site builder like WordPress/WooCommerce, OpenCart, Shopify, or Magento than many other solutions. Website owners using highly limiting integrations such as GoDaddy GoCentral are still having a very hard time with processing.
- Larger marketers using name brand CRMs – integrations are seemingly opening-up for folks using enterprise-level, or highly scalable marketing software. CRM systems used by many larger marketers tend to be fairly well supported by those processors willing to work with CBD. Customer relationship management systems like Sticky.io, Konnektive, and Response CRM generally have better options than those using smaller, or custom CRMs.
If you would like an introduction to an independent agent that can give you the latest updates on what CBD merchant account options are available, please reach fill out our short contact form and we will get back to you right away.
06/18/2019 A pause in “big” approvals – WooCommerce, and B2B still viable as are mid-sized established CBD sites
As we discussed last week, the talk of the industry lately has been the major player who was boarding “domestic” or USA-based credit card processing for large, established CBD merchants at great rates.
According to multiple sources, that processor has sent out notices saying that although the first few businesses that applied for a CBD merchant account are approved and things are looking great, any applications not yet approved (likely hundreds of them??) are in a holding pattern until the processor has time to review the existing book of CBD business on their systems. This could take days, weeks, or be indefinite.
As of June 18th, here is the state of the CBD processing world as we know it:
- CBD Businesses processing $75,000 or more a month no longer have a much easier path than smaller sites doing a fraction of that -at least as it stands right now.
- Businesses processing more than $15,000 per month, with financial backing and well-thought-out growth plans, do have an option that does integrate with Shopify, Wix, WooCommerce, and BigCommerce, among others. This CBD solution has quite a few “hoops” involved and is pricey, but it works and has been around a while.
- CBD businesses using WooCommerce still have additional options available, even if they are start-ups.
- B2B, or wholesale CBD business also have additional options. These include secure, “card on file” options that allow wholesalers of CBD to have their business-to-business clients buy CBD inventory using a credit card that is securely stored for repeat business. This B2B option does allow start-ups and smaller growing companies.
- Canadian CBD website owners also have more options than US businesses with more favorable terms and easier integration with big site builders like WooCommerce, Shopify, WordPress, Wix, etc.
Contact us here to learn more or request a call with an independent agent who has their finger on the pulse of the industry.
06/12/2019 For the big dogs, communication resumes but slow approvals persist for smaller companies
The biggest buzz in the “Big CBD” processing world this week was the excitement around, and subsequent frustration following the “new” 75k per month and up, NMI/Authorize.Net compatible, solution. Based on our conversations with the independent agents doing the hard work during this time of “CBD’ageddon,” hundreds of applications have likely been submitted to this new solution and precious few have yet to be approved… If you are a “grass is greener” type, the good news is that some have been approved.
As we suspected the “straight to voicemail” underwriting situations and delays are being caused by the wave of high volume applications this provider is seeing. So, as it stands we are expecting the high-volume merchants who have already submitted applications to be approved, and are hoping that new merchants with a history of more than $75k per month will also be approved once the backlog dies down.
In terms of credit card processing and payment gateway integrations for small CBD companies and start-up websites, there are some solutions, but they are imperfect. As always, if you would like some information or an introduction to an independent agent with their finger on the CBD payments pulse, feel free to drop us a note any time here, and follow us on social media for updates. (Social media links at the top of this post).
05/30/2019 New US CBD solutions, and more props for WooCommerce
New US processor enters the CBD market – (again, if you are big enough)
We are still learning all of the details, but one thing is pretty clear. The future of CBD processing in the USA is looking brighter than the recent past. We are able to recommend this simple, domestic CBD processor to established US CBD companies who have a recent history showing their ability to process $75,000 or more per month.
On the negative side, this minimum volume requirement leaves out the majority of CBD websites, but we expect over time that requirement to come down. The logic behind the minimum volume is pretty solid, even if it is not what we all want to hear. The truth is, Elavon set up a huge amount of CBD merchants, many of whom are still scrambling to set up their processing. Any processor that wanted to open up CBD publicly to all merchants would be buried in applications. The minimums simply keep the initial workload manageable.
One of the best features of this new option is the ability to integrate it with a correctly set up NMI, or Authorize.Net account. This gives the larger CBD merchants that qualify tons of flexibility in terms of website builders. If you are processing more than $75k in CBD and need a processor based in the US that integrates with BigCommerce, Shopify, and – via Foxy.io – Squarespace and Wix, contact us for a recommendation. If you are small, or a startup, please read the section below.
WooCommerce leads the way in terms of CBD flexibility
When it comes to CBD start-ups and small CBD sites, one site builder stands out. WordPress, with WooCommerce. The “WP and Woo” combo offers almost unlimited integrations which allow us a broader range of possible solutions to recommend. Although larger merchants have more options, small merchants are best served setting up their sites using WordPress and WooCommerce.
04/22/2019 “Normal” CBD credit card processing does exist
US-based CBD startups do have processing options, but they tend to be more restricted in terms of card types allowed, and more expensive. In contrast, large, established CBD companies who process in the millions per year have more options. We have found that US processors, known as “domestic processors” in the processing world, have stable affordable payment gateway and credit card processing options. This is a new trend and we are working hard to keep up with the details.
Bigger CBD sites have a “leg up” in terms of taking credit cards
As of now, it does seem clear that large, US-based CBD processors have a real advantage in terms of taking cards. Big sites can set up a payment gateway that works with almost any site builder, including the popular ones like Shopify, WooCommerce, BigCommerce, & Foxy. Larger CBD business owners can also take cards without delays in funding or an excessive amount of false declines. Again, this is a rapidly changing environment, so please contact us here for the latest news or a processor recommendation.
04/09/2019 Elavon and CBD- here’s the latest-
UPDATE: Elavon has given existing CBD site owners an extension. CBD site owners using Elavon were told as early as March, 14th 2019 that they had only 45 days to stop processing CBD sales on Elavon’s system and find a new processor – this worked out to be April 28. Luckily, for site owners who did not immediately move forward with a new solution, there has been a reprieve, albeit a small one. Based on our conversations with site owners, agents, and sales organizations, Elavon has extended the shutdown date to May 16th. All CBD merchants will have to have a new processor in place by May 15th to avoid interruption.
Due to the recent shakeup in the US regarding CBD e-commerce merchant accounts and payment gateways thousands of hemp and CBD site owners are now finding themselves without a way to accept credit cards. Below we go over some of the top issues facing CBD site owners in terms of payments and discuss solutions as well.
CBD payment gateways in Canada unaffected by the industry turmoil
One item we want to make clear: Canada was by and large not impacted by the large CBD account terminations that affected US-based CBD website owners this year. We are finding it very easy to assist Canadian website owners with payment gateways and merchant account recommendations. Unlike US CBD merchants, the Canadian site owners we work with that ship to Canada are still able to use the same processors this year as they were last year.
Canada to US CBD more complex
One important note: Canadian website owners who intend to charge US cards and ship to US residents for CBD do need to consider far more in terms of options than site owners engaged in simple Canadian to Canadian B2C sales. Contact us to learn more
Payment processor requirements for online CBD in the USA
Be careful about what products you sell through your credit card processor. While there are card processors that work for CBD oil and hemp-based products, you need to be careful to read the fine print. At the same time, you need to be sure that your products cannot be interpreted or defined as marijuana products. This means that you need to check that the products you intend to sell are allowed by the Controlled Substances Act, administered by the United States Department of Justice, Drug Enforcement Administration. Our trusted, independent agents can go over the processor agreements with you in detail – just contact us to get started.
Only sell hemp or CBD products through your CBD processor account. You want to make sure that you only process products that fall within the specific criteria outlined when you applied with the card processor. Many will outline that only a particular product type is allowed to be processed through it. In other words, if you sell pipes, glassware, or other paraphernalia, you should use a separate payment gateway or credit card processor for these different product types – likely on a different URL. Some products, like vape and CBD, can be combined, but it depends on your business. Again, contact us with any questions.
Make sure your products meet legal and processor requirements. As a high-risk merchant selling products with many regulations and legal scrutiny, your products must meet all relevant requirements. This includes that your CBD products have less than 0.3 percent tetrahydrocannabinol (THC) by dry-weight. Your products also need to be in line with all local, state, and federal regulations. You need to consult a qualified attorney before selling CBD online – we are not attorneys, and you should not consider anything on this page to be legal advice.
Your distributor needs to be licensed and should be local. It’s important for you to know that you should only buy cannabidiol/CBD from distributors licensed within the state you’re operating from. Additionally, most CBD credit card processors do not allow you to ship or deliver your products outside of the United States.