A New York-based investment bank by the name of Cowen & Co. published a study on the Cannabidiol (CBD) market. The analysts estimated that the revenue of the market is projected to reach $16 billion by the year 2025.
This is a massive leap from the estimated retail sales of CBD-related consumer products back in 2018, where they were approximately from $600 million and $2 billion. As a result of this abundance of opportunity, it is of little wonder why many merchants are flocking towards carrying CBD on their virtual storefronts.
So why the big surge?
In 2018, the Farm Bill, signed by President Trump, eliminated hemp from the definition of marijuana under the Controlled Substances Act (CSA). Now that this obstacle has been lifted, another barrier to entry has come upon merchants…finding a payment gateway that will allow CBD merchant processing.
Navigating The CBD Legal Waters
Even though CBD is “technically legal” due to the passing of the Farm Bill, the legal marijuana economy is still incredibly fragmented as the result of marijuana still being illegal at the federal level.
As it stands, 33 states, including Washington, D.C., have “legal medical markets” and 10 states (plus D.C.) allow it for recreational purposes.
CBD has yet to be tested or approved by the Food and Drug Administration. The government agency has taken firm action against any business that makes medical claims.
As a result of the controversy and confusion, CBD is a high-risk industry. Most of the regulations remain unclear as the FDA struggles to iron out all of the regulatory frameworks within this industry. Furthermore, you will have great difficulty finding a reputable, traditional payment processor to work within this industry.
What makes it more difficult is that there are bad actors in the form of “shady manufacturers” that are desperate to make quick and easy money. These fraudsters are making it difficult for payment processors to work with CBD merchants for online transactions.
CBD Requires A High-Risk Payment Processor
Knowing the choppy legal waters that await your CBD business, it would be prudent to select a high-risk payment processor that knows the ins and outs of, not only the high-risk industries but especially the CBD industry.
Bankful knows how to handle high-risk businesses. They specialize in merchant accounts within the CBD industry. Some of the categories that they have worked with include ingestible, tinctures and oil, beauty products, supplements and vitamins, pet products, and so much more.
To get started, simply go to the bankful.com website and navigate to the “Sell CBD on Shopify” page. Scroll down to the section that reads “We know CBD merchant accounts” and click on “Get started”.
You will then be redirected to a contact form where you will be asked for your location, URL of your business, the industry, services interested in, the shopping cart used, and estimated monthly volume of sales.
You will be asked to create an account in order to fill out an online application. After that, you will be able to check the real-time status of your application. Upon submission, a representative will get back to you within 1 business day.
Closing Thoughts
When it comes to securing the right payment processor for your CBD business, it must be done with great care. With the endless and sometimes confusing regulatory requirements that can change at any moment, your processor must be up-to-date and ready to help you forge ahead.
Your processor must also be well equipped with fraud protection, data security, and managing chargebacks effectively. These are just the bare minimum of services that your provider must offer. With all this in place, you can be sure that your CBD business can not only survive, but thrive.