While you’d think that various American industries would rejoice and open their doors to lucrative partnerships with CBD companies, it seems that a cloud of uncertainty has cast its shadow, causing industries and government agencies alike to remain cautious and still.
This came with the announcement that Elavon was ceasing all CBD- and hemp-related business, giving their newly prohibited existing merchants 45 days before their accounts would be closed. This decision was apparently sparked when one of Elavon’s merchants was raided and caught selling THC products mislabeled as CBD products.
The 2018 Farm Bill legalized interstate transportation and transacting with CBD. But it also meant that the government would soon start regulating the industry. It turns out, most American companies would rather wait until those regulations are written rather than build a vulnerable business prone to regulatory change.
Traditional payment processors can have a significant impact on CBD merchants. Processors like PayPal, Stripe, and Square are big names in the processing industry that offer traditional services. These services are fine for low risk industries. However, when a business becomes more complex, a CBD processor becomes the best solution.
PayPal CBD and Policy Violations
The Stripe CBD policy has similar restrictions to other traditional payment processors. Their popularity in traditional processing often confuses high risk merchants. Many high risk merchants don’t even think twice when signing up for Stripe’s platform. But unfortunately, a merchant’s high risk business will likely be shut down once discovered on Stripe. Stripe’s policies state that high risk industries are restricted from using any aspect of the platform. Among those explicitly stated is any Cannabidiol product. Stripe’s CBD policy is zero tolerance. This means if a merchant is discovered selling CBD, they’re account could be frozen. Now, it is up to the merchant to establish a high risk merchant account to regain their business and funds. Once this is done, Stripe can release funds and deactivate your account.
Stripe’s CBD Policies
Square is one of the first traditional platforms to delve into CBD processing. However, merchants must undergo intensive screening to make the cut. Square makes sure all products sold on their platform are under the THC threshold. Additionally, the Square early-access program is only a trial for the payment processing company.