It’s no secret that there is a disturbance in the world of CBD. Even after the extremely helpful Farm Bill, there are still many obstacles in the way of companies just trying to legally process their revenue. The Farm Bill acted as a declaration for hemp to be a legal substance, and effectively allows farmers to harvest it as a cash crop. At the same time, hemp could be used to make clothes, rope, and even build houses or fuel cars.
In case you don’t know, CBD, also known as cannabidiol, is a chemical component found in the hemp or marijuana plant, and has been studied several times with its effects on anxiety, pain, and even diabetes or hypertension.
It’s no secret that there is growing publicity for CBD, in both the commercial world as well as the medical world.
So why is it so difficult for CBD companies to process payments? To put it simply, banks run a great risk in processing payments for CBD, as it’s a gray area on the federal level. Laws require that CBD products contain less than .3% THC, the psychoactive component that causes a high. As of right now, there isn’t any regulation on the products, and there is no secure way for banking (and federal agencies) to know that the product follows this law. At the same time, this truly applies for CBD derived from hemp, and not marijuana, which is still a schedule I drug.
For years now this has been a problem for companies trying to sell CBD, but it seems there is one major credit card processor wanting to change this.
Square is a processing company that essentially takes a cut out of processing, but is a means of legally crediting the revenue made by the companies. While it’s still in the opening phase, this could be good news for other CBD companies. There are only a select few that are allowed to practice this at the moment, but perhaps the numbers will grow and so too the processing companies.
The problem with having such difficulty processing payments is that it can create a deeper black market for other things. A common approach is to branch off into foreign banking, which is a high-risk element for higher fees, and an inefficient method for startups.
There are interesting developments trying to stop this. The SAFE Banking Act is moving along swiftly and will allow companies to legally process payments for CBD, as well as hemp.
Related: Grandmother Arrested for Carrying CBD Oil in Texas