CBD & Hemp Sales: What’s Legal and How You Can Safely Accept Payments

Sep 17, 2021

If you’re a merchant that’s selling CBD or hemp products, it’s important to understand everything there is to know about the legalities of selling these products. You also need to know how to obtain reliable, safe CBD and hemp payment processing. 

What Are Hemp and CBD Products? 

First and foremost, it’s important to understand exactly what hemp and CBD are, as well as the differences between the two. Both of these products are related to the cannabis plant but the laws surrounding the production and distribution of them are less restrictive than for medical or recreational cannabis. 


Hemp is a variety of the C. Sativa plant and it’s grown for a variety of uses. The plant can be used to make clothing and other textiles, food, detergents, and even cosmetics. Because hemp plants do contain THC, it’s important for those who produce or sell hemp products to understand what’s legal and what’s not when it comes to these products.

The plant is regulated under the 2018 Farm Bill, which states that C. Sativa plants that contain less than 0.3% THC to be considered hemp or industrial hemp. It can be grown and sold legally throughout most of the U.S., with the exception of Idaho, South Dakota, and Mississippi. That being said, it’s expected that Idaho will legalize the cultivation of hemp in the near future. 


CBD can be extracted from cannabis or hemp plants and while cannabis has a stronger THC content, hemp typically contains a higher volume of CBD and minimal amounts of THC. 

CBD is thought to have an array of health benefits. Some users take it for insomnia, pain relief, appetite, or concentration; however, it’s important to note that these uses haven’t undergone enough testing and therefore, any statement about the health benefits of CBD is not FDA-approved and could subject the merchant to warnings or fines. 

For the manufacture and distribution of CBD to be legal, it must adhere to the regulations outlined in the 2018 Farm Bill, meaning that for merchants, hemp-derived CBD is usually a safer bet. 

CBD and Hemp Payment Processing Options

 It’s anticipated that CBD sales will skyrocket to as much as $22 billion by 2022, which is a clear indicator that hemp and CBD use isn’t just a fad. With higher sales comes a higher volume of merchants requiring quality hemp and CBD credit card processing options but when you’re in a high-risk, recently legalized industry, where do you turn to know your money’s in good hands? 

What To Look For In a CBD Payment Gateway

Whether you’re selling hemp and CBD products that are federally legal or your business takes it a step further by selling recreational cannabis and marijuana, you need to find a payment processor that’s focused on the needs of high-risk merchants.

High-Risk Specialization

You’re considered high-risk in part because of the products you sell, but as a hemp or CBD merchant, you’ll find that you’re also prone to chargebacks and payment card fraud which only adds to the risk that your processor takes on when handling your payments. 

Look for a processor that has longevity and a solid reputation among other high-risk merchants. They might serve those in a variety of other industries that are considered high-risk, such as pharmaceuticals and nutraceuticals, travel, online gaming, and adult entertainment. 

Fair Rates and a Reasonable Contract

Being high-risk doesn’t mean you need to pay exorbitant fees for payment processing. Look for a payment processor that offers you reasonable rates for processing. Before you sign anything, read between the lines and check for hidden fees. You’ll want to check for compliance fees and non-compliance fees, monthly or annual fees, statement fees, and terminal fees, as well as transaction rates, which are typically higher for credit card transactions than they are for debit transactions.

You should also review your contract for things such as long-term agreements and early termination fees. 

24-Hour Support

Payment issues can occur at all times of the day and it’s important to have a processor that’s available to help whenever they arise. Look for CBD credit card processing companies that offer round-the-clock email, chat, or telephone service. On top of that, make sure the processor has procedures in place for handling chargebacks, disputes, fraud, and other common payment processing problems. 

Back-up Plans

In high-risk industries, it’s not uncommon for merchants to face temporary account freezes due to chargebacks or fraud and in some cases, bank accounts can be closed if chargebacks or fraud occur at a high volume. A good high-risk payment processor will have comprehensive risk management plans in place, which might include processing payments through multiple banks, using off-shore solutions, and fraud protection. 

Find a Processing Solution That Works For You

Ultimately, finding CBD and hemp payment processing is about searching for a solution that suits your business and your day-to-day processing needs. Look for a processor that has your company’s best interests in mind and make sure it offers service that’s reliable and backed by a strong reputation in its industry. 

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