Many of the most popular website building platforms (Content Management Systems) are banning CBD products from being sold, & shutting down merchant accounts that sell CBD or hemp products.

We can tell you all about it – or you can ask all our clients who we’ve migrated from Shopify to Woo.

We’ve seen in hundreds of times already. A reddit user below experienced his Shopify store closing with no alternatives in sight.

“My online CBD store is being shutdown! My company was using shopify to sell our CBD isolate and skin care products, but I just received an email saying we’re getting shut down. Has this happened to anyone else?? I don’t know what to do now, and I’m starting to get worried (I am currently warehousing a fair amount of product). If anyone can point me in the right direction from here I would be very grateful, as this is a good chunk of my income.”

https://reddit.com/u/dsp0121

Shopify is one of the world’s leading Ecommerce platorms, and seemingly an easy choice when wanting to start a store quickly and with no programming skills.

But it’s also a private company, you’re playing in their sandbox, and you have no implicit right to use their software for whatever product you desire. In fact, due to the legal grey area of CBD, they’ve opted to shut down CBD Ecommerce stores – often without warning.

Related: Advertising CBD Products: What Options are Available to Use?

WHY CAN’T I USE SHOPIFY?

One of our clients heard it right from the CEO himself – CBD exists in a legal “grey” area and it’s not worth risking Shopify’s reputation or viability by accepting what they consider a “prohibited product.”

Square, Stripe and PayPal don’t like it either, and they put pressure on Shopify for allowing so may CBD companies who in turn try to use those payment processing methods.

Here’s where things get interesting. In my research of over 200 companies, I found that most (read: 99%) of American based companies would not offer any website associated with cannabis processing. And I’m talking any website, even if you’re in lifestyle selling apparel — if it’s got a leaf it’s a scarlet letter.

If you’re working in the online space and you’re looking for a quick option to sign up and get going — there are few and far between. And the handful that are listed only work with non-cannabis selling entities, you’d basically have to be slinging only CBD.

What should you pick?

Your easiest bet is to go with Woocommerce I tried going directly to Authorize.net, Shopify’s payment processor, and they denied any form of cannabis business. But they informed me that their resellers can offer payment services to cannabis companies at their own risk. Which Woocommerce does — albeit not openly, you can find plenty of paraphrenalia and CBD shops on their platform.

Related: While Mainstream Social Media Platforms Block Cannabis Advertising, this Channel Remains a Closely Guarded Secret

My Advice?

  • Never settle for check processing. It’s a scam. In this day and age, there’s no reason you can’t be processing with credit or even debit. If the salesman offers you check processing and can’t offer credit, walk away, they’re a waste of time. Don’t give any percent of your profits to people who can’t even provide you a standardized experience.

  • Go hard. Never hide anything. Show all your cards from the start and see what’s allowed. The hidden cards will be played out on the table eventually. Most processors will work with you and advise you on what particular aspects failed their criteria. It’s easier to go back and forth a few rounds in the preliminary process, than lose profits when your site is booming due to a random spot check.

  • Have a backup plan. Make sure to have a minimum top 2, or top 3-5 options. With the flaky relationship of finance and cannabis due to federal limitations, a processor that seemed reliable for years may disappear in a day. It happened to dispensaries in Florida recently when their banking solution closed all cannabis accounts. The bank wanted to clean their slate due to a buyout from a federally regulated institution.

Oh and don’t fall for any of those phony “potcoin” fads. Cryptocurrency has proven to be an excellent way for businesses to facilitate sales. However, it comes at the cost of pouring money in a volatile micro-economy often controlled by a small subset that have been known to steal funds. But if you’re seriously interested in cryptocurrency, I’d recommend going with a mainstream coin like Bitcoin. And services like Bitpay can get your sales going.

Still need help?

If you’ve gotten this far and you’ve already expended all the options I’ve laid out — welcome to the club! Our clients are coming to us with all of the same problems– It’s pretty likely we can help you too.

You can schedule an appointment with a member of my team here.

It’s not impossible!

You can sell cannabis, and cannabis-related products, with a credit card. It is totally possible, and it’s happening every single day with countless businesses. The most important thing is to not feel defeated, because the battle for payment processing will be an uphill struggle. That’s why most people lean on simple solutions like Woocommerce, or run to consultants who solve everything for small percentages of everything.

Whichever you decide, I wish you the best of luck on your entrepreneurial journey!

2 thoughts on “Big E-Commerce is Shutting Down CBD Merchants & This is a Serious Problem.

  1. Mark H says:

    Hi Alex,

    Shopify does allow CBD companies to operate on their platform, but they will not let CBD companies use “Shopify Payments” which is powered by Stripe. Nor is Paypal, Apple Pay, Stripe, or any other major payment provider an option.

    In order to process payments on a Shopify CBD store, you must use an alternate payment gateway that is associated with a payment processor and merchant account that allows CBD sales. I run an eCommerce CBD retail and wholesale site and we are set up with a payment processor and use authorize.net as the gateway. The problem we are having is that the acquiring bank our processor uses shut off Visa transactions without warning on April 30th. We are lucky to still have MasterCard as an option, but with the previous experience of immediately shutting down visa transactions, we worry that MC could be short lived also.

    The issue is that there are only a few acquiring banks that are processing CBD right now, and the largest processor, Elavon/US Bank, is getting out of the business shutting down all the accounts at the end of the month. Due to the volume of applications the currently accepting banks are receiving, the minimum per month processing requirements are in the $100k-$500k per month (or so I hear).

    To put it simply, it is very difficult to get an account for CBD eCommerce sales right now, and everyone is trying to get one right now! Hopefully some things will get cleared up soon.

    Best Regards,

    Mark H from EarlybirdCBD

    • alex says:

      Hey Mark,

      Thanks for the insight! You’re totally correct in that it ultimately comes down to the payment processor in running a functional site. It’s totally possible to still run on Shopify, but at the same time it’s a much higher risk/benefit of getting your account shut down. As far as Visa transactions – Visa has come out & stated they will no longer process CBD transactions – which I believe made 70% of all CBD purchases.
      It’s the wild west of payment processing right now, & only time will tell our next available options. While we do specialize in designing & developing websites, payment processing definitely isn’t our alley. Best of luck to you, Mark!

      -Alex Collins
      CEO/Co-Founder
      Sapling

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