Things You Should Know About CBD Payment Processing In California
Once the legalization of cannabis started in the world, most of the countries have made sales of recreational and medical marijuana legal. The pace of legalization was also quite amicable in the United States. And it was California to legalize the use of cannabis and CBD products for medical purposes in the first place.
Later on, with the Proposition 64, recreational use and sale of marijuana also became legal in 2016. And around 2018, the state officially began selling products like CBD edibles, hemp, seeds, skin creams, and muscle and hair growth supplements infused with cannabis extracts. Currently, most merchants and vendors that deal with the sales and distribution of such products are setting up CBD merchant account to offer more to the customers. Hopefully, it will also improve the verification process for the consumers as well. That’s why many retailers are looking for CBD credit and debit card processing solutions.
Challenges for Cannabis Merchants
If you run a medical marijuana dispensary or recreational shops or both, then you might face challenges with merchant lenders, document preparation, credit repair, direct marketing, and some other aspects as well. Even though the government has legalized the substance, the federal government and major banks are still skeptical about cooperating with such business financially. Despite being a legal substance, most financial organizations consider CBD storefront dispensary, Cannabis delivery service, and online seller of CBD criminal operations.
While the companies often manage to earn profits, they lack an appropriate way to safeguard their profits. As a result, most dispensaries and retailers had to switch to cash-only payment modes. However, you don’t need to get stuck without an appropriate hemp payment processing channel. Banking for the cannabis industry is possible; you have to maneuver around the laws to avail secure CBD payment gateway.
Current Laws For Medical/Recreational Cannabis Payment Processing
At present, Californian citizens can grow six plants of cannabis and transport up to 1 oz. of the substance. But retailers and dispensaries deal with a much more substantial amount and a variety of products. Luckily, you can set up a CBD oil merchant account or a CBD business account with the help of services like SiftPay.
Although the association of the financial institution is less as compared to the available options, the cannabis industry is still thriving. In 2017, among the 11,000 operational banks in the United States, only 300 agreed to comply with legal marijuana vendors, distributors, and companies. And even after that, most merchant lenders (short term loan financing) charges extra fees and need further efforts from vendors to support them.
As per federal law, cannabis still lies under the Controlled Substances Act. And that’s why major banks refuse to provide support and loans to the companies that deal with cannabis, especially without a secure CBD payment gateway or business account. Any federally regulated institution won’t intentionally get involved with a substance’s purchase or sale that is listed in the Controlled Substance Act and prohibited.
Get Around The CBD Business Banking & Payment Processing Issues
Large scale institutions like Bank of America and JP Morgan & Chase have refused to associate themselves with persons and companies of the marijuana industry. They believe that their business can produce enough profits using other means.
So, most cannabis vendors are left with fewer options to get help for their business. Fortunately, independent banks offer flexible options to such services and willing to cooperate with them fully. Most people don’t realize that while Obama was still President, a directive was issued in 2014 through FinCen (Financial Crime Enforcement Network) that permitted financial institutions to partner with legal cannabis organizations. They only need to comply with the anti-money laundering regulations.
Regardless of this directive, big-names still consider this high-risk business and keep their hands out from the industry. Keep in mind that it is technically legal to support legal marijuana within the regulations.
Get Transparent CBD Merchant Account With SiftPay
No matter if financial institutions deny your requests to avail of banking services and get help, there is one thing that you can do to improve your business processing. Get SiftPay to create a CBD oil merchant account so that you can accept payment in various ways, including credit and debit cards. Currently, most companies don’t use cards as cannabis transactions are prohibited in the branded card network.
It is apparent that the cannabis business also needs a convenient CBD payment gateway for accepting electronic payments. But there have been many cases of fake CBD online banking registration and fraud cannabis banking accounts.
Such activities can blacklist the merchants on TMF or MATCH database. The MATCH merchants won’t be able to get a legitimate merchant account.
If you are willing to improve your brand perception, then you need to set up reliable cannabis payment services. Having a shady CBD product payment processing system will only degrade your reputation in the industry. SiftPay has been providing debit solutions to the cannabis merchants and the entire CBD market to empower them.
The industries that are deemed high-risk business are:
Airlines, Vape/eCig/CBD, Adult entertainment, Agriculture, Alcohol, Accounting, Construction, Cryptocurrency, Financial services, Bad Credit, Dating Websites, Gambling, Insurance, Legal Services, Lending, Manufacturing, Mining, Newspaper Agencies, Liquor/Hard Alcohol Outlets, Auction Websites, Nutraceuticals, Real estate companies, Online Video Gaming, Fantasy Sports, Direct Response/Infomercials, Time Cancellation Services, Online Tobacco, Debt Consolidation, Electronics, Restaurants, Retail, Staffing, Transportation, Travel agencies, Trucking, Utilities, Wholesaling, Collection Agencies, Event Ticket Sales, Pharmacies (Retail), Educational Seminars/Leadership Coaching Centers, Ticket Brokers, Merchant lenders (short term loan financing), Loan Services, Direct Marketing/Multilevel Marketing (MLM) Agencies/Biz Opportunity, US-based online pharmacies, Adult, retail and streaming hubs, Online Firearms and Gun Sales, High Volume Merchants, Continuity/Subscription Merchant Accounts, Credit Repair/Collection Agency, Document Preparation Centers, High-Risk Processing, e-commerce and Credit Repair Companies, Tech Support, Software & E-books, Dropshipping, Foreign Exchange, Stock Exchange, Timeshare services, Weight Loss and Diet Programs, Payday Loans, Social media/ Gaming, Subscription Based Services, Telemedicine, Coaching Centers for Real Estate, Business, and Life, Medicinal/Recreational Marijuana Retailers, CRB Retailers, CBD, Hemp, and Cannabis Lab Testing Centers, Paraphernalia Processing Companies, and Membership Sites.
However, SiftPay also plans to cover various low risk industries including, Auto Repair, B2B, Business & Professional Services, Car Dealerships, Churches/Nonprofits, Contractors/Home Improvements, Coffee Shops/Cafes, C-Store/Independent Gas Stations, eCommerce, Fitness Studios & Gyms, Flooring, Grocery Stores, Legal Services, Liquor/Beer Stores, Lodging & Hospitality, Medical & Dental Offices, Pet Stores, Pharmacy & Drug Stores, Property Management, Restaurants & Bars, Salons & Spas, Schools, Universities & Educational Institutions, Veterinaries and more.
For establishing US-based online pharmacies that sell cannabis-based products like edibles, hemp, seeds, and other nutraceuticals, you need secure CBD business banking and account. SiftPay can help you with the cannabis payment services and get approval for setting up a new business payment model that can accept credit cards and debit cards.
This is an opportunity that most cannabis merchants have been waiting for to establish a good line of credit in the industry. Get rid of having to pay ATM maintenance fee and hiring armed guards to protect your assets as SiftPay will ease up such worries and increase your revenue with cashless programs.