On April 30th, 2018, the 9th US Circuit Court rejected a petition from the Hemp Industries Association, thus developed the classification of CBD as a Schedule I Drug. This ruling could lead to problems for CBD businesses, who are marketing with all legal ways, a substance on the same level of illegality as cocaine and heroin. However, hope is never lost. As long as the status of CBD is in flux across the country, there will be solutions out there for your business. Let us have a look at finding right CBD merchant account.
CBD or cannabidiol are mostly used for medicinal purpose and this is not used for drug purpose and is completely different from marijuana. Still, it gets difficult for CBD merchants to an account whereas this should not be there in case of CBD. This problem is not new, and it has happened only due to people’s mindset. Unfortunately, you cannot do much to change people’s mind. You need to keep your search on till you find a merchant account service provider.
You must have awareness about the limitations because CBD will follow many of the same restrictions as of marijuana.
Manufacturing of products, importing or distributing, possessing, and using certain substances is regulated under the CSA(Controlled Substances Act). The Food and Drug Administration (FDA) and Drug Enforcement Agency (DEA) are in charge of all those substances that are added to or removed from the various “schedules” in the CSA. Schedule I substance is most restrictive and schedule V are least restrictive. Marijuana is a schedule I substance including LSD, MDMA (ecstasy), heroin etc. Schedule V substances are said to have a low potential for abuse, have a currently accepted for medical use, and, if abused, may only lead to limited dependence.
The most interesting fact of CBD is that it is legal within the United Kingdom and is not considered a controlled substance. Cultivation of hemp is legal within the UK, in alignment with EU regulations. Hence, any CBD oil with THC values of over 0.2% is considered medical marijuana and is illegal. The demand for Cannabidiol (CBD) has increased tremendously because of its ability to naturally treat dozens of chronic conditions. CBD is also accepted in many states across America including California, Colorado, and Kentucky.
CBD may not fall under CSA at all, as mentioned it is not exactly the same as marijuana. Products that are made from cannabis plants such as sterilized seeds, oil or cake made from seeds and mature stalks are not controlled under CSA and these products may be sold and distributed throughout the USA without any restriction.
DEA Indicates that products which do not fall under controlled substances acts or CSA definition of marijuana may be sold and distributed in the United States. According to DEA the presence of cannabinoids or CBD by itself doesn’t determine if a product falls under the CSA. Rather that determination is made on basis of whether the product falls under CSA’s definition of marijuana. If you are not sure where your product falls, it is a good idea to consult a drug expert.
One of the major problems for CBD sellers involves unsubstantiated health claims, if your product makes a health claim that has not been verified by FDA, it will fall into the category of pseudo-pharmaceuticals where it is not an approved prescription drug but still claims to have benefits like prescription drugs.
Unsubstantiated health claims are claims that have not been evaluated by the FDA and this will directly affect health. The product that will impact health can be considered a health claim, even if the claim is as general as suggesting the product can decrease anxiety. Some CBD companies suggest that their products help with difficulty sleeping to inflammation. However, The Washington Post cautions that CBD’s effectiveness is limited at this time. It suggests that there is preliminary evidence that CBD may help with seizures.
As you know that CBD is considered high risk business by credit card processors due to the uncertainty of legality and changing regulations, so, unfortunately, CBD sellers may not get a regular merchant account easily. It becomes more difficult for a processor to ensure a business is complying with state and federal regulations.
Most of the merchant account service providers prohibit CBD seller accounts such as quick sign up style services, such as square, Stripe, and Paypal. You may activate your accounts for once but later this will be deactivated, as reviews are conducted they will find out that you are selling CBD without any prior notice they will discontinue your account. Try not hooking up with such merchant service providers to save yourself from trouble. You will find some high risk merchant account service providers in the market but it will be on his conditions that whether or not to accept your business. You may get offshore merchant accounts but this will be more expensive than the domestic option.
Always look for high risk service providers for credit card processing in case of CBD products. You can compare pricing from various service providers and then select the best one for yourself.
Every merchant account approved by iPayTotal and its acquiring banking partner includes access to the approving bank’s payment gateway. To learn about CBD Oil Payment Processing, call us at +44 800 776 5988 or click here to set up your personalized payment consultation.