Amazon is everywhere, and this retail juggernaut is an enormous part of our economy and lives. Like all businesses, Amazon restricts what you can sell. These restrictions hit many products worldwide, including CBD. While the substance is legal in the United States, various restrictions still impact this business sector.
If you want to sell CBD, you’ll need a high-risk merchant account provider to help you navigate these challenges, minimize unnecessary fees and keeps you operating within the confines of the law. With years of experience working with high-risk merchants, Bankcard understands these specific challenges and can help you find the best merchant solutions for your business.
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What is CBD?
CBD, a distant cousin to marijuana, is a specific product of cannabis that comes from the cannabis plant. CBD is short for cannabidiol. Like other hemp products, CBD contains low levels of THC or tetrahydrocannabinol — the specific cannabinoid in marijuana that can cause intoxication. At low levels, THC won’t cause intoxication or get you high.
CBD is legal to consume in the United States. In 2018, Congress passed the 2018 Farm Bill, which removed CBD from the Schedule 1 list of restricted drugs. This allowed businesses to manufacture, purchase and sell CBD in the United States and CBD exploded into a multi-billion dollar industry that continues to expand. The CBD market is a highly lucrative one, generating billions of dollars in transactions every year.
The product is not without restrictions. Per the 2018 Farm Bill, CBD products must contain no more than .3% THC. Furthermore, some states have extensive licensing and testing that a business must pass to sell CBD products.
Why Do Some Merchants Restrict CBD Sales?
CBD vendors face various problems that are remnants of a time when CBD was illegal.
A stigma remains on the product, with many vendors wrongly believing it’s connected to marijuana. It doesn’t help that CBD can sometimes look like marijuana, and the same drug paraphernalia is used for marijuana and CBD.
Unfortunately, the lack of federal regulations on the CBD market has given bad actors a chance to sell CBD products that are incorrectly labeled. Numerous tests have found that this is a common problem with CBD products. CBD products may also come loaded with other contaminants that can be harmful when ingested. As a result, many online marketplaces have restricted the sale of CBD. Some websites and marketplaces refuse to sell CBD altogether.
Can You Sell CBD on Amazon?
Amazon policy is clear: You can’t sell CBD on the website. Amazon explicitly bars the sale of any CBD product, including full-spectrum or broad-spectrum CBD. You can’t sell a CBD product on Amazon, even if it contains 0% THC.
This strict policy forces CBD vendors to find other ways to sell CBD online. CBD vendors have to expand their network of potential websites and find other vendors and payment gateways. Attempts to find these vendors can create a real challenge for any CBD vendor, as other websites also declare CBD a high-risk product. This classification means you will have to pay higher fees on each transaction. Fortunately, Bankcard can help keep your costs low.
Do Some Vendors Sell CBD on Amazon Anyway?
Yes. However, this can lead to real problems.
The Washington Post notes that CBD can still be easily found on Amazon. Vendors often alter the product listing, describe CBD differently or use a codeword. They may also sell CBD oil under the guise of hemp oil. Hemp oil is a separate product from CBD oil, and many businesses sell hemp oil on Amazon. A close examination of hemp oil products sold on Amazon occasionally reveals that the product is CBD oil.
Doing this violates Amazon’s rules, which ban the sale of CBD products. Amazon may warn any seller attempting to skirt this ban not to do so. Repeated violations of this rule can lead to a total ban on the Amazon network.
Where Can You Sell CBD?
The sale of CBD continues to expand, and with it comes more options to buy and sell the compound. Despite Amazon’s ban on CBD sales, you can still find many alternatives to selling the product.
A brick-and-mortar store can sell CBD if you comply with all existing local, state and federal regulations. CBD is now available in many stores, including grocery stores, gas stations and some drug stores. Major superstores, including Target and Walmart, now also stock the product.
As the CBD market has expanded, many CBD-specific stores have been set up. These stores sell CBD, Delta-9 THC and other cannabis-related products. Buying CBD in stores can give consumers many advantages that aren’t available when purchasing CBD from another type of store. For example, staff can be specially trained about what cannabis products are legal and what the potential benefits of each product may be. These stores also go deeper into the array of CBD products on the market.
There are additional things you may want to consider when opening a brick-and-mortar CBD store:
- Speak with the appropriate government officials, as you may need specific permits.
- Consider joining a local business organization, like a Chamber of Commerce. The reputational challenges may scare some customers off from buying your product. Networking and inviting individuals to your location can help to break stigma-related concerns about CBD.
- Understand that you will face more restrictions for opening a CBD store than you would another store. Many banks and insurance companies are hesitant about doing business with CBD stores. There are also restrictions for advertising CBD on Facebook, Instagram and other social networks.
- Consider joining a national network of CBD vendors. These vendors can give you critical advice, access to programs you may not know exist and keep you up-to-date with the latest legal challenges in the industry.
- Find a merchant account service with experience in this high-risk industry. You may need a specialty high-risk merchant account processor.
At Bankcard, we have experience in the CBD industry and understand your challenges. We provide the tools you need to access payment processing services.
CBD sellers have created websites that they operate in addition to a brick-and-mortar store or as a standalone website that sells CBD products.
Opening a website can help you avoid some of the regulatory challenges of opening a brick-and-mortar store. However, you still need to ensure you adhere to appropriate local, state and federal regulations. You may also face additional challenges; for example, you’ll need a payment processor to take payments over the internet. You’ll also have to make sure you accept as many payment methods as possible, including echecks or cryptocurrency.
You’ll also deal with shipping regulations. Transporting CBD is legal in the United States. However, you must maintain all records and paperwork demonstrating that your CBD products operate within the law.
One of the greatest struggles that CBD vendors often face is building up credibility with customers. You can address these issues by being transparent in your manufacturing and sales process. Achieve this by:
- Having a section of your website that explains your manufacturing and growing process.
- Conducting third-party testing. The third-party testing company should be a separate entity from your business.
- Allowing customers to review your products and give an honest assessment of their positives and negatives.
- Be honest about what science says about CBD in your marketing. Don’t make any outlandish or unsupported medical claims, but you can discuss the benefits your customers report.
Make sure to check with your website hosts to ensure they allow CBD websites. For most businesses, this isn’t a problem. However, there are reports of website hosts rejecting CBD businesses. You should check with any website host ahead of time.
Other third-party vendors
Amazon does not allow for the sale of CBD on its marketplace or affiliates. However, you can find another ecommerce store that will enable you to sell CBD products. For example, you can use Shopify to sell CBD. Other websites, like WooCommerce, also allow you to use their network to sell CBD. Working with Bankcard as a high-risk vendor can reduce your fees and ensure you keep as much of your money as possible.
Other websites still prohibit the sale of CBD, including Etsy. You will have to research what website allows and doesn’t allow the sale of CBD.
How Can I Minimize My Risk While Selling CBD?
The risks around CBD are extensive. To sell the product, you must take these concerns seriously and ensure you’re doing everything possible to reduce your risk. Consider the following steps.
Speak with local and state authorities. They may have specific licensure or permitting requirements before opening any CBD establishment. They may also have testing or reporting requirements.
Track changes in local, state and federal laws about CBD. The industry’s newness has led to various legal changes, creating confusion within the CBD world. By monitoring any potential changes to CBD regulations, you can stay ahead of these laws and reposition your business as necessary.
Only work with reputable products that regularly test their CBD product. Many CBD vendors use a third-party lab to test their CBD for contaminants and ensure accurate labeling. These test results are then made available with a Certificate of Analysis. You should only use CBD products with a publicly-available Certificate of Analysis.
Develop a comprehensive record-keeping system and track test results. Doing so can protect you from claims of selling mislabeled products.
Don’t make any medical claims about the effectiveness of CBD while marketing the product. The FDA has been extremely clear on CBD marketing restrictions. Making medical claims is in direct violation of FDA regulations. If you violate this policy, you will receive a formal and public notification from the FDA, ordering you to change your marketing. Additional violations may result in criminal or civil penalties.
Work with a payment processor that has specific experience in the CBD market. This vendor should understand the particular challenges in CBD and know how to minimize your risk. The vendor should also be able to help you develop a plan that can minimize your fees and reduce the need for chargebacks.
The payment processor that you work with is important in any business. For an industry like CBD, it’s vital. You need to work with a vendor that understands high-risk industries with experience in your economic sector and can get you the services you need to succeed. At Bankcard, we know the challenges of the CBD sector and can work with you to get you access to all the merchant services you need. Contact us today for more information and how Bankcard can help your business.