Shopify CBD Merchant Accounts: Guidelines and Process
As the CBD industry continues to grow, many startups are looking to sell hemp-derived products on platforms like Shopify. Before launching your Shopify store, it's essential to understand the legal landscape and payment processing requirements involved in selling CBD. Acquiring a CBD merchant account is a critical part of this process, as it enables your Shopify store to accept payments for CBD products.
If you're wondering how to sell CBD on Shopify, this guide will outline the steps and considerations you need to take.
Legal Considerations for Selling CBD on Shopify
Before selling CBD on Shopify, it’s important to understand the regulations surrounding CBD products. CBD, particularly hemp-derived CBD, is classified as a high-risk product due to the varying legal restrictions across states and countries. Consulting with legal counsel is highly recommended to ensure compliance with federal, state, and local laws before setting up your Shopify CBD store.
In addition to local laws, you should also familiarize yourself with Shopify’s policy on selling CBD. Shopify requires that your business comply with all federal and state regulations, and failure to do so could result in your merchant account being closed.
Understanding the Shopify CBD Policy
Shopify has specific guidelines for selling CBD on its platform. In the United States, only hemp-derived CBD products are allowed for sale, and they must comply with federal regulations, including containing less than 0.3% THC. Additionally, Shopify's CBD policy requires compliance with state laws, which can vary widely.
You must also ensure that your Shopify store clearly states your products' ingredients, especially if you’re selling consumables like CBD gummies or CBD edibles, as these products fall under FDA regulation.
Shopify CBD Payment Processor
In order to process credit cards online, you'll need to find a solution that allows you to operate as a Shopify CBD business. Shopify Payments is a payment processor, but it does not currently enable CBD businesses to use its payment gateway. However, there are many alternatives to this service.
You'll want to find a third-party gateway like PayKings that can provide the high-risk account you'll be need. CBD is categorized as high-risk because of the above-mentioned legal stipulations, additionally, banks who support your account don't want to have the risk of bad brand association when it comes to products in this vertical.
How to apply for a CBD merchant Account
To get a Shopify CBD account, you'll have to go through three different processes.
Application – Apply to receive a payment processing account. This entails filling out a general form and then adding details to a more thorough merchant application. Here their processing company will collect important information. Share the details regarding your company such as how long you've been operating and your chargeback rates. You'll also want to share which state you're operating in, and how much sales volume you're processing per month.
Underwriting – Once you have finished sharing all of the necessary documents and company details, the bank will review your application. At this stage, they may also contact you and request adjustments to your site, or possibly verification of documents such as COAs that show THC below 0.3%.
Approval – Once the bank approves your Shopify CBD account, you'll be able to start accepting payments. With your payment gateway integration and a portal through the bank, you can see all of your transactions and revenue flow. You'll also be able to monitor important details like your number of chargebacks and refunds.
In Canada, the restrictions for CBD are a bit different, and the process may not apply. However, there are more opportunities for getting a cannabis merchant account in Canada according to the legal regulations.
Types of CBD You Can Sell:
- CBD Gummies and Edibles
- CBD for Dogs and Pets
- Concentrates
- Ointments and Topicals
- Sprays and Atomizers
- Capsules and Pills
- CBD for Vaping
- Creams and Lotions
- CBD Flowers
Final Thoughts
Selling CBD on Shopify is a lucrative opportunity, but it comes with unique challenges, especially in the areas of legal compliance and payment processing. By understanding Shopify’s CBD policy, securing a reliable CBD merchant account, and marketing your store effectively, you can succeed in the competitive CBD industry.
Remember, selling CBD on Shopify requires careful attention to legal regulations and a robust payment gateway to handle high-risk transactions. With the right approach, your Shopify CBD store can thrive in this growing market.