Create a Merchant Account for Your CBD

What is CBD?

 

CBD (cannabidiol) is a natural compound derived from the cannabis plant. There are more than 100 chemical compounds found naturally in cannabis, the two most commonly known being CBD and THC. Cannabis refers to two different substances: hemp and marijuana- both containing differing levels of CBD and THC. Marijuana contains high levels of THC- the main psychoactive compound that causes you to feel “high”- and low levels of CBD.

Hemp contains low levels of THC (less than 0.3%) and high levels of CBD. A common misconception about CBD is that it is the same thing as marijuana and can cause you to get high. Although CBD is found in small amounts in marijuana, THC is the compound that causes the high, not CBD. There still appear to be benefits of taking CBD, with people testifying that it helps with anxiety, insomnia, and chronic pain and inflammation.

Today, CBD products come in many forms for consumers. There are three main product categories: oils, edibles/gummies, and topicals such as creams, lotions, ointments, and balms.

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Why is high-risk?

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CBD is FDA-approved, technically making it legal in all 50 states, however it is still a legal gray-area in many states. Since the industry is so new and not well-regulated, some states are still unsure about its legality making it a high-risk industry for merchants. High-risk industries are significantly more likely to suffer from fraud and chargebacks, two instances that can put small startups out of business before they’ve even had a chance to take off. 

 

Finance experts recommend small business owners operating in high-risk industries to work with a merchant services provider to lessen the risks of fraud and chargebacks. Unfortunately, many providers won’t accept CBD businesses because of the high-risk nature or they will accept at a high processing cost that sets the barrier of entry too high for new business owners. 

If you are the owner of a CBD business- this does not mean you’re out of luck! Applying for an Approvely merchant account is the first step to securing credit card payment processing. Payment processors require businesses to work through a merchant services provider to utilize all of their available capabilities. Approvely will help you establish a reliable banking channel for funds to be securely processed through.