What exactly does the Agriculture Improvement Act of 2018 include?
Congress just passed a new Agriculture Improvement Act of 2018, otherwise known as the farm bill – that would allocate billions of dollars to farms throughout the United States, address changes to the SNAP federal food aid program, and various measures to help farms under duress due to the sanctions President Trump has put on trade with China.
This bill created some pushback between Democrats and Republicans as it effects the production of food within the US, jobs associated in the industry and the availability/how crops are being produced. Surprisingly, one of the least argumentative portions of the bill was the legalization of hemp production on a federal level.
How does this effect the rapidly evolving CBD business?
This bill would take the regulation of hemp products to a state wide level. It would change the Controlled Substances Act and remove it as a Schedule 1 drug, allowing it to legally be produced and farmed throughout the United States. The FDA is still unsure as to how it will regulate hemp under the new bill moving forward and has yet to comment on policy updates regarding the impending hemp legalization.
How does this effect payment processing for your online CBD store?
This bill allows for the legalization of hemp production and research. The ability for these CBD items to be sold freely would need to be approved on a state level and approved by the FDA before banks and credit card companies would be willing to get involved and sell it as “low-risk”.
What about the domestic solution offering low rates for CBD companies?
Other payment processors are trying to offer a domestic solution for processing CBD within the United States at a lower rate and warning them against the high-costs associated with off-shore solutions they were traditionally forced to use in the past. A domestic solution with low-rates? Sounds great! However, companies that aren’t used to dealing with these types of clients can make some pretty big errors for merchants looking to get their store up as quickly as possible to start processing payments online. Many of the CBD companies getting set up on this domestic solution are finding themselves miscoded as “pharmacies” which can get you flagged, put on MATCH, and could see your account quickly terminated due to the harsh regulations placed on actual pharmacy accounts.
For now, those operating an online CBD store are best suited with a high-risk payment processor. One that particularly knows the business and stays ahead of any issues and can adapt to any issues that could inevitably effect your industry and derail your business. T1 Payments successfully processes millions of transactions a week for CBD merchants. To find out more about our customizable global payment solutions for high-risk merchants – including active account monitoring for fraud, chargeback management and real-time reporting – please visit t1payments.com or call 866-518-2216.