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Selling CBD On Shopify: Your Comprehensive Guide

In the last few years, Cannabidiol (CBD) has shown tremendous promise for its health benefits. But, at the same time, it is fraught with legal complications.

CBD products are not yet approved by the FDA and they are regulated by both federal and state laws. As a result, many banks, payment gateways, and payment processing companies categorize CBD sales as high-risk transactions and don’t support them.

While the CBD market is complex and regulations are still evolving, it is a lucrative business opportunity for online vendors. It’s estimated to represent a $16 billion opportunity by 2025. In 2022 alone, some estimates say that online sales of CBD reached about $3 billion. 

Thankfully, there are some payment processing companies, such as Von Payments, who provide high-risk processing solutions for small and mid-sized businesses in non-traditional verticals—such as selling CBD.

In this article, we discuss all that you need to know about selling CBD on Shopify and how to acquire a high-risk merchant account.

What Is CBD?

CBD is a derivative of the Cannabis plant. But it can also be derived from hemp—a subtype of the Cannabis Sativa plant species—which produces a range of cannabinoids. Both cannabis and hemp contain a psychoactive chemical called tetrahydrocannabinol (THC), but hemp contains significantly less THC and makes it an uncontrolled substance.

 

By US federal law, CBD derived from hemp containing less than 0.3% THC can be sold legally on online platforms and in stores as it’s a non-addictive and non-psychotropic substance. 

CBD derived from cannabis is considered a Schedule 1 substance and is illegal to sell, so it’s important to know the source of CBD if you want to sell it online.

 

CBD is now widely acknowledged as useful in treating major ailments and illnesses such as depression, cancer, epilepsy, and more. However, it has not yet received FDA approval, and scientists are still researching the veracity of its medicinal benefits. 

 

Can I Sell CBD Online?

The 2018 Farm Bill authorized the production of hemp and removed hemp from the schedule of Controlled Substances. So, in short, yes, CBD derived from hemp is permitted to be sold online.

First, however, you must find the right platform that gives you a systematic framework to safely sell CBD products while complying with all the associated regulations.

Shopify has stringent yet vendor-friendly policies for selling hemp-derived (not marijuana-derived) CBD products online. 

However, you cannot currently use Shopify Payments (Shopify’s payment gateway) to process CBD sale transactions online. Instead, Shopify recommends integrating a third-party CBD merchant account into your CBD e-commerce store.

But first, let’s look at what you need to do to start selling CBD on Shopify.

 

What Do I Need To Sell CBD On Shopify?

While Shopify supports CBD stores on their e-commerce platform, it’s recommended that you consult a legal expert to verify federal, state, and local laws for the sale of hemp-related products and follow updates from the FDA.

For example, some states have laws preventing people under 18 or 21 years from using or buying CBD products. In that case, you’ll need to verify that people purchasing CBD products meet the legal age requirements for that state.

Before you start your Shopify store, ensure you have the right license your local government body mandates to allow you to sell CBD online.

Also, your state may have different laws for ingestible CBD and topical CBD products, so get the right advice from an expert before you finalize which CBD products you want to sell.

 

Shopify CBD Payment Processor

CBD sales are considered high-risk transactions. The FDA is still developing a regulatory framework for the CBD industry. As a result, many payment processors don’t support CBD sellers. 

So, your first job will be finding a high-risk payments processing company to support your Shopify CBD store.

A payment processor mediates between you (the merchant) and the financial institutions to ensure you get paid on time by facilitating funds transfer. 

Some payment processing companies, like Von Payments, also provide equipment for accepting card payments, fraud-detection solutions, PCI compliance, and other related services.

Within a few seconds of an online transaction, the payment processor forwards the payment details to the card’s issuing bank or card association for verification and initiates anti-fraud checks against the transaction.

Payment processors play an important role in securing online payments. They protect the merchant’s interest by ensuring the buyer’s bank has adequate funds or the card account has a sufficient credit line. At the same time, they also ensure that the buyer’s sensitive payment information is safe from malicious actors.

That’s why it is important to choose an experienced payment processor that specializes in high-risk transactions. 

Shopify CBD Policy

It’s crucial for every seller to carefully understand and abide by Shopify’s terms and conditions for selling hemp-related CBD products online.

The process should be fairly straightforward as they align closely with federal and state guidelines and regulations. Any Shopify store that violates FDA guidelines will likely be shut down or frozen.

  • If you aren’t already a Shopify store owner, the first step is creating a shop for your online business.
  • Next, while you are signed in to your Shopify accounts, complete and submit the Attestation for the Sale of Hemp and Hemp-Derived Products form.
  • Once your store is automatically attested, select a third-party payment gateway—such as DigiPay or Bankful—that supports Shopify CBD transactions.

As a note, always remember to keep a close eye on FDA updates on CBD-related regulations during your selling. 

 Apply For A CBD Merchant Account

A CBD merchant account allows retailers to accept credit card payments against CBD sales. You will need to use payment processing services from a high-risk merchant processing provider—such as Von Payments—to start a CBD merchant account.

We provide comprehensive, full-suite payment solutions to maximize your CBD business potential. 

We also offer services such as 3DS, RDR, Chargeback, and PCI solutions that will mitigate risks and ensure the merchant accounts stay healthy and compliant for the lifetime of our clients’ processing needs.

As your partners in payment processing, we aim to enhance all aspects of your processing capabilities so you can focus on scaling your successful business.

Apply for a Von Payments account to get the following:

  • Quick and easy application process
  • 24-48 hours approval
  • Zero-Fee Processing Program—convert processing fees into a convenience charge paid by your customers
  • Modern safeguards and fraud detection systems
  • Prevent chargebacks at source to maximize 
  • Extensive reporting capabilities

And much more. Connect with us to learn more about how to apply for your CBD merchant account today!

FAQs

Q: What types of CBD can I sell on Shopify?

You can sell hemp-derived CBD products in various forms:

  • CBD oil
  • Vape oil
  • Topical creams, lotions, balms, shampoos, and other skin and hair products
  • Edibles include CBD-infused beverages, gummies or lollipops, sublingual sprays, and tinctures.
  • Supplements in the form of capsules and soft gels

Q. Why are hemp-derived CBD products considered high-risk?

Many people think CBD is high-risk because of the complex laws guiding its sale and purchase. However, many banking institutions and payment processors consider CBD transactions as high-risk due to various factors. These include high chargebacks, frequent refunds, large-ticket pricing, or because the acquiring bank deems them as high-risk. 

 

Find Your Solution With Von Payments

High-risk credit card processing is necessary for merchants who want to seize the business opportunity offered by the growing popularity of hemp-derived CBD products. While traditional gateways and processors are reluctant to work with CBD merchant accounts, Von Payments already specializes in high-risk payment processing.

You can count on us to provide expertise on all aspects of starting your CBD merchant account and accepting payments online.

At Von Payments, security is our topmost priority. We work with cutting-edge encryption technology, advanced security, and fraud prevention measures.

Get your Shopify CBD online store off the ground with a CBD Merchant account and payment processing from Von Payments.

Our dedicated team is readily available to address any questions or concerns. Connect with us to start your CBD merchant account today!

 

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