If you’re in the CBD oil business, you know it’s not the same as selling marijuana or marijuana edibles. However, that doesn’t mean you won’t have trouble finding a credit card processor.
CBD merchants that make “unverified” health claims may have fewer choices regarding credit card processing. It happens mainly due to the lack of information about the product.
How is CBD different from marijuana?
Cannabidiol or CBD doesn’t cause the user to experience the so-called “high”. Despite coming from the same plant, CBD doesn’t have a psychoactive component. This is an important feature for its defenders, who need to use CBD to relieve therapeutic conditions, not as a recreational drug. However, regarding credit card processing, most organisations don’t separate these concepts, so the restrictions are the same.
Is CBD legal?
At the core of this question is the Controlled Substances Act (CSA), the authority that regulates USA drug policies. Manufacturing, importing, possessing and using certain substances are regulated under the CSA. The Food and Drug Administration (FDA) and Drug Enforcement Agency (DEA) are responsible for the type of substances that are added to or expelled from the many Schedules in the CSA.
The CSA has five Schedules for various substances. Schedule I is the most restrictive and Schedule V is the least restrictive. The Schedule I substances are the ones with a high potential for abuse, no current acknowledged medical use and absence of accepted safety for utilisation under medical supervision. Drugs like LSD, MDMA, heroin and marijuana are on this list.
Schedule V substances are said to have a low potential for maltreatment and have an acknowledged medical use. While the DEA has included certain CBD-containing epilepsy medications to Schedule V, marijuana remains on the Schedule I list.
CBD vs. Marijuana according to the DEA
As mentioned before, CBD and marijuana are not the same. So, it may not fall under the CSA by any means. A DEA internal mandate states that products and materials produced using the cannabis plant, and which fall outside the CSA definition of marijuana, are not controlled under the CSA. Such products may accordingly be sold and circulated throughout the USA without restriction under the CSA or its implementing regulations. As universally understood, CBD and the psychoactive component, Tetrahydrocannabinol (THC), are two separate substances.
The DEA also expresses that the presence of CBD by itself doesn’t decide whether a product falls under the CSA. Or perhaps, assurance is made by whether the product falls under the CSA’s definition of marijuana. So, in case you’re uncertain where your products fall, it’s important to talk to an attorney or expert on drug classifications.
Problems for CBD sellers
One of the biggest issues for CBD sellers involves “unsubstantiated” health claims. So, if your product makes a health claim that hasn’t been confirmed by the FDA, it will fall into the class of “pseudo-pharmaceuticals” that are not approved prescription drugs but claim to have benefits like prescription drugs.
What are “unsubstantiated” health claims?
For the purposes of credit card processing, unverified health claims will be the ones that haven’t been assessed by the FDA. Any recommendation that a product will affect health can be viewed as a health claim, even if the claim is as general as proposing the product can decrease anxiety.
How can I obtain a merchant account if my product doesn’t make a health claim?
Owing to all reasons above and the vulnerability of legality and evolving regulations, CBD products will be considered as high risk with credit card processors. This makes it more difficult for a processor to guarantee business is consenting to state and federal regulations.
Don’t forget that those quick sign-up style services such as Square, Stripe and PayPal, forbid CBD. Your account may originally go through, but later will be shut down when the processing company finds out you’re selling CBD products. You should spare yourself the inconvenience and find a merchant service that doesn’t forbid CBD sales.
You might be able to acquire a high-risk merchant account. However, it will be at the processor’s discretion. Offshore merchant service providers may also offer you an account, but it will cost more than a domestic option.
Finding the right payment processor
When searching for a credit card processor for CBD products, start with companies that specialise in high-risk businesses. You can compare services and prices from different processors to ensure you find the best service for your CBD merchant business.
At iPayTotal, we guarantee to assist you in obtaining a merchant account your CBD products.
To apply online for the CBD merchant account, just fill out the form and our team will contact you. iPayTotal provides you not only a merchant account but also assistance through the whole path, with 24/7 support service.
Whether you’re planning on starting a new merchant business or just need help to expand an existing CBD merchant account, we can help you.
Contact us today and start the change in your business to increase your revenue with our credit card processing solutions for your high-risk merchant account.