3 Things You Should Know About the Big Banking Battle for CBD Oil

By Lynn White
Source: newswire.net

The CBD Oil industry is considered to be risky and many banks have been hesitant to support them. The following are several things that you should know about the big banking battle for CBD oil.

CBD oil is becoming increasingly more popular as the days go by. While the oil is made of hemp, the product is considered to resemble marijuana. While hemp oil is legal, marijuana is not which makes selling CBD oil quite troublesome for some distributors. 

In addition, this is quite a challenge for banking industries as the substance is commonly illegal in most if not all of the 50 states in the US. This means that the CBD Oil industry is considered to be risky and many banks have been hesitant to support them. To get around this, supporters such as Thesoutherninstitute.com works to help CBD oil distributors gain access to beneficial business partners so that they can be successful in getting their product out into the hands of consumers. This endeavor is not easy and there are several things that you should know about the big banking battle for CBD oil.

1. Accepting payments. Because accepting payments for a product that is considered to be questionable can be challenging, many retailers often only accept cash payments. While this is feasible, it often makes it challenging for consumers to make a purchase. If you choose to offer in store credit to help grow your business, you are taking a risk as a business owner if you do not have the proper bank to back you and help insure your credit system. Those banks who will back the merchant credit process that you have in place will likely cause you high rates to do business which takes away from your bottom line. It may seem as if there is no way to get around stringent parameters that are placed on selling a product that is not considered to be legal although it is made of legal ingredients. Many CBD Oil merchants find themselves in quite a tough spot as they want to grow their business but do so by maintaining the law.

2. Credit card processing challenges. When looking for a credit card company to partner with, you are going to run in to the challenge of the issuing bank most likely being located in multiple states. The reason that this can pose a problem for you is that while marijuana may be legal in some states, it is not legal in all. Those credit card companies and banks who operate in states that legalize marijuana as well as states that don't’ may deny working with you as the risk is too high. Banks consider themselves as having legal obligation to follow laws in both states that they operate in. Major credit card companies such as Visa, Mastercard, and American Express have a blanket agreement not to work with any distributors at this time. The only way to remedy this challenge is for marijuana to be legalized in all states.

3. Risks. Sure, you can attempt to open an account with a bank and be vague in the information that you provide about the type of business that you are conducting but then you run the risk of getting shut down permanently. To avoid this, it is in your best interest to work with companies such as the Southern Institute to help you find partners who are willing to work with you at a reasonable price