Written by Rob Kennedy
Whether you’re an established CBD merchant or are planning to become one at some point in the future, there are a few things you need to know regarding payment processing. CBD merchant processing can be tricky. There are myriad laws and regulations related to the Cannabidiol industry, and navigating them can be like walking backward through a minefield. What’s perfectly legal and acceptable one day might cause endless hassles with a veritable phalanx of government agencies the next. This can become especially worrisome if you’re planning on doing business across regional or even national borders. Fortunately, Nuvei specializes in North American cross-border payment methods. Let’s take a moment and dive into a few issues that you’ll need to know about as you move forward.
Is CBD worth the extra hassle?
The short version is “yes if that’s your business model.” Quince Market Insights report that the global Cannabidiol (CBD) market is expected to grow by a CAGR of 51% in North America (Cannabidiol (CBD) Market Size, Growth Analysis Research Report 2030, 2020). For a market that’s already hit three billion, that means that the CBD market is expected to reach $55 billion by 2028 (Global Cannabidiol (CBD) Market Size Expected to Reach $55 Billion In 2028, 2021). It’s a growth market that’s probably only going to grow faster as uses for CBD expand, therefore increasing global demand.
Is CBD difficult to board?
CBD is certainly considered to be a strategic account type. The reason for this is because, like any relatively new industry, CBD can be susceptible to payment card fraud and chargebacks. Your partners at Nuvei can help you with this, as we provide in-house underwriting. We also have a great deal of experience boarding accounts of this type. Make sure you discuss the exact nature of your CBD enterprise with your Nuvei team, and we’ll be happy to provide more details, but in most cases, we’ll be able to board your CBD business within days.
Is CBD legal?
This is a question that is asked time and again, probably because there’s no simple, one-size-fits-all answer. Generally speaking, Cannabidiol is legal, but there are some caveats. For example, CBD is generally legal throughout Canada, but only licensed cannabis processors are allowed to sell it. In the United States, CBD is generally legal as long as the THC content is lower than 3%, but that can change from State to State. Remember, it’s up to you to make sure that you’re compliant with the governing laws of your particular region. The last thing you want is to have your merchant account shut down because of an arcane local regulation.
In the United States, CBD remains illegal at the federal level. This makes the task of accepting CBD online payments fairly restrictive, even for merchants who have no intention of ever selling recreational products. If your product is derived entirely from low-THC hemp, the process becomes easier, but still has its hurdles.
Is the hemp market different?
Yes. Hemp is usually (but not always) marketed differently from “hemp oil”. As a general rule, hemp products are related to clothing, fabrics, and food items. CBD refers to hemp oil extract, which is usually marketed as a health supplement. Keep in mind though that even hemp clothing can run afoul of local regulations.
Online vs In-Store payment process for CBD
If you are going to be selling CBD online and from a brick-and-mortar location, you’ll want to select services that can accommodate taking online and in-person payments. Secure, reliable eCommerce payment processing or hosted checkout solutions are crucial to a positive, successful, and profitable online experience.
Nuvei can assist you in choosing from a wide array of user-friendly countertop and mobile POS device options. Most of these devices can accept all payment types, and can also support promotions, loyalty programs, and other revenue generation mechanisms. It’s safe to say that today’s young, tech-savvy consumers are more likely to opt for the convenience of buying products, including CBD, online; and probably via their mobile devices. Purchasing online has become ubiquitous and anything less than a positive experience can result in a lost customer.
Nuvei can seamlessly integrate with your chosen eCommerce and POS software systems. By having all of your client data, inventory, and transaction data synchronized, your business will be more efficient and profitable. You’ll be able to make important decisions at the touch of a button. Our POS software makes business data available in real-time. We also provide you with dashboards and customizable reports via web-based or mobile access. This is important if you run or have plans to manage a multi-location business. In this case, relevant data, stored in a central, accessible system can be put in the hands of appropriate staff to help effectively manage the business.
Customer Service and Support
Quick, straightforward onboarding and full-time support of a CBD online and credit card payment processing system can be the difference between potential profits and losses. Nuvei is an experienced payment processor, and we have a well-defined onboarding and training process. We provide guidance that can assist you as you set up your online CBD business. We also have dedicated account managers who you can talk to if any problems arise.
Nuvei offers outstanding support with over 99.99% uptime so that our merchants can process payments securely and reliably. Don’t be afraid to ask for help. Guiding you through each stage of the process is part of what makes us the leaders in North American processing!
Selling CBD online or in-person is still a relatively new, albeit potentially lucrative, business venture as more and more jurisdictions, particularly in the US, make cannabis products legal and more readily accessible. The demand for these products can’t be questioned at this point, and it is only expected to grow as CBD products become more generally accepted. Nuvei can fully, safely, and cost-effectively support your needs and those of your end customers. Having the right partner for payment processing will significantly affect how safely and quickly your business will grow.
Contact us at Sales@BaseCommerce.com to learn more.
- Cannabidiol (CBD) Market Size, Growth Analysis Research Report 2030. (2020, January). Quince Market Insights. https://www.quincemarketinsights.com/industry-analysis/cannabidiol-market
- Global Cannabidiol (CBD) Market Size Expected to Reach $55 Billion In 2028. (2021, June 2). Cision PR Newswire. https://www.prnewswire.com/news-releases/global-cannabidiol-cbd-market-size-expected-to-reach-55-billion-in-2028-301303716.html
- Statista. (2019, November 1). Annual CBD usage rate in the United States from 2018 to 2024. https://www.statista.com/statistics/1065834/annual-cbd-usage-rate-us/
- Statista. (2021, June 17). CBD product dollars sales in the United States from 2019 to 2026. https://www.statista.com/statistics/1067467/cbd-product-dollar-sales-us/