The popularity of CBD oil business is witnessing ever-growing growth due to the considerable health benefits the CBD products offer not only to humans but also to the pets. Despite the growing popularity, CBD oil business is not legal everywhere, and legalized CBD business for medical purpose require the business entity to apply for a special license for selling the CBD oil for medical use. The legal regulations relating to CBD businesses are evolving in various states, which make the industry to operate with a high-risk sector tag. The CBD business faces great challenges due to the high-risk nature of the business that attracts stringent legal regulations.
Some of the important challenges faced by the retailers in the CBD oil businesses include:
The international, state and federal laws relating to the conduct of CBD products operations are primarily conflicting and complicated in nature, which completely discourages banks or prominent merchant services to support the risky business. Banks consider CBD business as a high-risk one and do not accept an application that involves selling of CBD oil and hemp products.
Hence, retailers in the high-risk business look for reputed high-risk model consulting firms that have high expertise and experience in offering specialized merchant account solutions to their businesses. The Southern Institute CBD merchant account solutions are seamless and secure and come with significant advantages such as fast approval, affordable rates, easy integration and dedicated client support for the retailers in the CBD business.
Public Perception Of The CBD Business
The biggest challenge faced by the retailers in the hemp industry is the negative perception of the CBD products among the public. Generally, people perceive that the hemp products are similar to that of marijuana, which is illegal in many states. There is a misconception that since both hemp and marijuana come from the same cannabis family, CBD products causes high’s that are generally associated with the illegal drug.
The Reluctance Of Credit Card Vendors
Another great challenge faced by the hemp industry is the reluctance of the credit card vendors to allow CBD businesses to commerce through them, due to the risky nature of the business. This challenge has forced the retailers in the hemp industry to pay all their bills and make sales using cash. The limitation of the alternative payment modes such as credit cards poses a considerable security risk for the business to store cash, which could easily become stolen or lost.
Disruption In Financial Transactions
The retailers in the CBD businesses need to conduct numerous financial transactions in the form of paying salary to their employees or receiving payments from the customers during the purchase of their products. The customer payments are primarily received through credit card or debit cards, and the merchants use the virtual termination alternative or payment gateways for processing these card payments. Due to the high –risk nature of the business, banks or prominent merchant services companies are unwilling to approve these financial transactions or charge exorbitant fees for its approval thereby denting the profits of the retailers in the CBD business.