Kratom Merchant Accounts After the DEA's 7-OH Action: What Is Scheduled, What Is Pending, What Banks Ask

For a decade the legal footing of a kratom business was simple to state and hard to bank: the leaf is not a federally controlled substance, the FDA says it cannot lawfully be sold as a food or dietary supplement, and a handful of states ban it outright. That footing shifted this summer. On July 1, 2026 the Drug Enforcement Administration announced its intent to place concentrated 7-hydroxymitragynine, the alkaloid sold as 7-OH, in Schedule I on an emergency basis, along with three synthetic relatives. On August 26 the order covering the three synthetics took effect. The order covering 7-OH itself has not been published as of September 19, 2026. This guide sets out what is scheduled, what is pending, how the states have moved ahead of Washington, and what it means when you apply for or try to keep a kratom merchant account.

What the DEA actually did, in two separate notices

The DEA published two notices of intent in the Federal Register on July 6, 2026, both under the temporary scheduling power in 21 U.S.C. 811(h), which lets the agency place a substance in Schedule I for two years without full rulemaking when it finds an imminent hazard to public safety; the Congressional Research Service notes such an order is not subject to judicial review. The two notices cover different things, and the difference matters for what you can sell.

The first notice, Docket DEA-1570, targets 7-OH above a specified threshold. The threshold was adapted from the definition in the HHS scientific and medical evaluation, which was sent to the DEA in a letter dated July 28, 2025. It has two parts:

• Botanical material of Mitragyna speciosa that contains more than 0.050% 7-hydroxymitragynine on a dry weight basis.
• Any alternative article, whether produced synthetically or derived from the plant and further processed into extracts, concentrates, processed edibles or pressed pills, that contains 7-OH above 0.050% by weight or volume, or more than 1.00 milligram of 7-OH in the article.

The notice said the temporary scheduling order would be published on or after August 5, 2026. It has not been. HHS opened a parallel request for information on the threshold, closed comments on July 31, then on August 26, after a request for more time, extended the deadline to September 10, stating that it wanted input only on the threshold number and how it should be measured, not on the safety or utility of kratom generally. A search of the Federal Register on September 19 shows no 7-OH temporary scheduling order. Concentrated 7-OH is therefore still not a federally controlled substance today, and the final threshold could yet differ from the 0.050% and 1 milligram figures in the notice.

The second notice, Docket DEA-1644, covered three 7-OH-related compounds: mitragynine pseudoindoxyl (MP), dihydro-7-hydroxymitragynine (MGM-15) and 9-fluoro-dihydro-7-hydroxymitragynine (MGM-16). That one is done. The DEA's temporary order placing all three in Schedule I took effect on August 26, 2026 and runs until August 26, 2028 unless extended or made permanent. There is no threshold: any quantity of MP, MGM-15 or MGM-16 is now a Schedule I controlled substance, anyone holding stock without a DEA Schedule I registration must surrender it, and the DEA found MP and MGM-15 already on sale to consumers, with MP products marketed to buyers as kratom.

Plain leaf is not the target, and never has been

Both agencies have been explicit on this point. The FDA's 7-OH page states that the actions target concentrated and synthetic 7-OH products and are not intended to apply to natural kratom leaf containing only naturally occurring trace levels of 7-OH. The DEA's notice records that in its natural botanical form 7-OH is a trace alkaloid, under two percent of the plant's total alkaloid content, but that it can be synthesized from mitragynine, the plant's major alkaloid, in a one-step chemical reaction, and that the synthetic and natural molecules are identical. The CRS summary says the same: the scheduling will not apply to the kratom plant or its other derivatives as long as their 7-OH concentration falls below the thresholds.

This is narrower than the DEA's 2016 attempt to schedule both mitragynine and 7-OH, which it withdrew six weeks later after receiving numerous comments from stakeholders. The 2026 notices leave mitragynine alone. Congress could go further: the END 7-OH Act (H.R. 8000) would permanently add 7-OH to Schedule I while carving out 7-OH naturally contained in kratom, but as of the CRS report in July it had only been introduced.

None of this changes the FDA's longstanding position that kratom is an unapproved new dietary ingredient and an unsafe food additive that may not be marketed as a drug, a dietary supplement or a food additive. Between June and July 2025 the FDA issued seven warning letters to companies selling 7-OH tablets, gummies, drink mixes and shots, and on December 2, 2025 the U.S. Marshals Service seized roughly 73,000 units of 7-OH products, valued at about $1 million, from three firms in Missouri.

The states did not wait

The DEA notice is candid that its order will not preempt more restrictive state law, and the state picture is where most of the practical risk now sits. Citing an April 2025 survey and the American Kratom Association's state tracker as of February 2026, the notice counts nine states that prohibit 7-OH consumption (Alabama, Arkansas, Florida, Indiana, Kentucky, Louisiana, Ohio, Vermont and Wisconsin), four that cap 7-OH as a share of total alkaloid content (Arizona, Colorado, South Carolina and Texas), nineteen that have enacted a version of the model Kratom Consumer Protection Act with labelling, age and manufacturing rules, and local bans in parts of Illinois, New Hampshire, North Carolina and Tennessee. Mississippi limits 7-OH to one percent of total alkaloid content or 0.5 milligrams per container. Some of the nine prohibition states ban kratom in every form, not just 7-OH; treat the list as a starting point for your own state-by-state check, not a substitute for one.

Two states show how sharp enforcement has become. Texas capped 7-OH at 2% of total alkaloid content and banned synthetic alkaloids in its 2023 Kratom Consumer Health and Safety Protection Act. On April 21, 2026 the Texas Attorney General sued two California-based online retailers, Pure Leaf Kratom, LLC and Outcast Distribution, LLC, alleging that products they shipped into Texas tested at 86% to 96% 7-OH of total alkaloid content, and that the companies' website promise not to ship non-compliant products to Texas was false. That is a lawsuit against out-of-state e-commerce sellers for what arrived in Texas mailboxes.

California has gone further than any federal proposal. The California Department of Public Health's position, quoted in the Governor's March 3, 2026 release, is that it is illegal to manufacture or sell kratom or 7-OH products for consumption at any age; the release states that foods, dietary supplements and drugs containing kratom or 7-OH are illegal to sell or manufacture in the state. The state enforced it through alcohol licensing: retailers holding an Alcoholic Beverage Control licence were told to pull kratom and 7-OH or risk that licence. By September 2, 2026 the Governor's office reported 8,038 site visits, 181 violations, 7,888 kratom and 7-OH products removed from shelves and 97.75% compliance among ABC licensees, and Pain News Network reported on September 7 that CDPH says it has also acted against out-of-state distributors shipping into the state. If you ship kratom to California, you are shipping into a state that regards the entire category, leaf included, as illegal to sell for consumption.

Why this lands on your merchant account first

Payment processing for kratom has always run on a narrow argument: the product is not a controlled substance, so a bank that underwrites it deliberately, with product testing and state restrictions in the file, can carry it as a high-risk botanical alongside CBD and nutraceuticals. The mainstream platforms never accepted that argument. Stripe's restricted business list, as of September 2026, does not name kratom but prohibits substances designed to mimic illegal drugs, including kava, and nutraceuticals that are not safe or make harmful claims; PayPal's acceptable use policy bars transactions involving certain controlled substances or other products that present a risk to consumer safety. Clauses that broad have always left aggregator accounts selling kratom one risk review away from a freeze, and the DEA and California actions give every risk team a fresh reason to run that review.

For the dedicated high-risk acquirers, the July notices change the file in three ways. First, a product line that includes any MP, MGM-15 or MGM-16 is now a Schedule I line, and no bank will carry it. Second, concentrated 7-OH products are on notice: the order has not issued, but the notice of intent, the FDA warning letters and the Missouri seizure together mean a bank that keeps underwriting 7-OH shots, tablets and gummies is underwriting a product the federal government has said it intends to make a federal crime to distribute. Expect most to stop before the order publishes rather than after. Third, and most usefully, the DEA's framing gives underwriters a number to ask for. A file showing every product tests under 0.050% 7-OH on a dry weight basis, and under 1 milligram per unit for anything processed, documents that the product is plain kratom by the federal government's own proposed definition.

The measurement problem underwriters will catch

There is a trap in the numbers that will surface in underwriting before it surfaces anywhere else. The DEA threshold for leaf is a percentage of dry weight. The Texas cap, and several other state caps, are a percentage of total alkaloid content. Those are different denominators. Whether a product that sits under a 2% of total alkaloids cap also sits under 0.050% of dry weight depends entirely on how much total alkaloid the material holds, and a certificate that reports one figure does not let you derive the other. For extracts and finished units the DEA adds an absolute cap, 1.00 milligram of 7-OH per article, which neither percentage tells you. A certificate of analysis written to satisfy a Kratom Consumer Protection Act state can therefore be silent on the question the federal notice asks.

The practical answer is to have your lab report all three: 7-OH and mitragynine as a percentage of dry weight, 7-OH as a percentage of total alkaloids, and milligrams of 7-OH per serving and per retail unit, with the limit of quantitation stated, because a non-detect from a method that cannot see below 0.1% is not evidence that a product is under 0.050%. A COA that reports only mitragynine, or only total alkaloids, no longer answers what an underwriter has to ask.

What to do now

1. Pull anything containing mitragynine pseudoindoxyl, MGM-15 or MGM-16 today. These have been Schedule I since August 26, 2026, with no threshold, and a catalogue that still lists them ends an application at the first product review.
2. Separate concentrated 7-OH products from the rest of your catalogue and decide, before the order publishes, whether you intend to keep selling them. If you do, you are asking a bank to underwrite a product the DEA has announced its intent to schedule, and the answer is likely to be no.
3. Re-test the remaining catalogue to the DEA's proposed definition: 7-OH as a percentage of dry weight for leaf and powder, milligrams per unit for capsules, extracts and edibles, alongside the total-alkaloid percentages your state laws use.
4. Build and enforce a shipping matrix. At minimum block the states that ban kratom outright and California, and apply the percentage caps in Texas, Mississippi and the other capped states to what you ship there. The Texas lawsuit was brought against sellers whose website said they geo-blocked and whose shipments showed they did not.
5. Clean up labels and claims. The FDA's 2025 warning letters cite unproven medical claims, products marketed for pain, relaxation and mood, and packaging that appeals to children; Kratom Consumer Protection Act states require accurate labelling and bar sales to minors. Underwriters read your product pages, and a wellness claim on a kratom listing is a reason to decline.
6. Read your processing agreement for illegality and change-of-law clauses, and ask your provider in writing what happens to settlement and reserves if the 7-OH order publishes. If you are on an aggregator, assume the answer is a freeze and move first.
7. Keep every product on one honest storefront. Splitting kratom onto a second site under a different name to keep a low-risk account open is transaction laundering under card network rules, and it turns a product problem into a MATCH-list problem that follows every future application.
8. Add a second rail. ACH and bank-transfer acceptance sit outside the card networks and give a compliant leaf catalogue a way to get paid while acquirers settle their positions on the category.

How PayKings approaches kratom

Kratom is placed case by case with acquiring banks that underwrite botanical and nutraceutical products deliberately, and the answer for a given catalogue depends on what the lab work and the shipping rules show. When you apply, expect to be asked for a full product list, current certificates of analysis reporting 7-OH in the forms described above, your state shipping restrictions and how you enforce them, and your prior processing history. Expect a plain answer about which products can be placed and which cannot; concentrated 7-OH and the three scheduled synthetics cannot. If you sell kratom and want to know where your catalogue stands before the federal order lands, talk to a PayKings specialist about a high-risk merchant account with your COAs and product list to hand.