Credit Card Processing for CBD & Dispensaries

The 2018 Farm Bill was a landmark victory for CBD and hemp-related businesses across America, paving the way for the legalized production and sale of certain hemp-derived products. Similarly, legalized marijuana found its home in dozens of states across the US.

Each of these changes to the legal and regulatory landscape surrounding hemp, CBD, and cannabis was the catalyst that drove a multitude of new businesses eager to offer high-quality products demanded by consumers.

According to Forbes, projections regarding the size of the US CBD market alone forecast that it will surpass $16 billion by 2025, leaving plenty of room for industry veterans and new innovative brands to capture market share.

With consumers shifting buying preferences from in-store to online, dispensaries and CBD brands have struggled to adapt, with major hurdles in banking and credit card processing holding them back.

CBD Credit Card Processing

CBD Requires High Risk CBD Processing

Despite its legalized status, CBD is still considered to be a ‘high risk’ industry by most major banking institutions and credit card payment processors. This makes accepting payments online a major challenge for online retailers. 

With the FDA dragging its feet regarding regulatory frameworks for the industry, the unknowns have banks and credit card processors erring on the side of caution.

What it Means to Be Considered a ‘High Risk’ Business

Most large and well-known payment processors such as PayPal, Stripe, Braintree, and banks refuse to do business with dispensaries and CBD brands. 

Operating what is considered to be a ‘high risk’ business can have a serious impact on day-to-day operations. Namely, the ability to use traditional banking, loan, finance, and payment processing.

In a world where few people carry cash, and where debit or credit cards reign supreme, not having access to payment processing is a dark cloud over an otherwise booming industry.

High Risk Businesses Are Often Subject to:

  • Tight limits on transaction volume monthly (limiting growth and revenue)

  • Higher processing fees for debit and credit cards 

  • Complete denial of service or unexpected service disruption leaving brands scrambling to find a new processor 

The solution? High risk processors who aren’t afraid to offer CBD brands and dispensaries the same high-quality services they do for other industries.

CBD Credit Card Processing: What to look for in a CBD Payment Processing Gateway 

1. Willingness to Handle High-Risk Businesses 

With CBD having a history of operating in legal gray areas, you’ll need a payment processor and/or gateway that’s willing to work with what are considered ‘high risk’ industries. The same holds true for dispensaries. Even though cannabis use has been legalized in several states, federally it remains illegal, and because banks are FDIC insured, they are unwilling to offer services to the cannabis industry.

Processors that Work with the Following Niches are Often Open to Working with CBD and/or Dispensaries:

  • Adult entertainment 

  • Online gambling 

  • Online dating

  • Pharma

  • Vaporizers and e-cigarettes 

  • Telemarketing

  • Cryptocurrency

  • Payday loans 


2. Simple Integration with Your Systems  

The last thing you need is an overly complex system that requires significant customization and implementation in order to integrate with your business.

The right credit card processor for your CBD business will be one that seamlessly integrates with your existing shopping cart system, funnels, and eCommerce website.

As an alternative, those credit card processors that offer an API are often the most flexible, giving you the freedom to utilize their services in a way that is custom-tailored to the unique needs of your business and/or systems. 

3. Availability of POS Devices and/or Integration   

For those CBD companies or dispensaries with physical locations, POS (point of sale) integration with your payment processor is mission-critical. Point of sale systems enable you to process credit and debit card transactions in person. Being able to use a debit/credit card in your store is a major value-add for customers, improving their experience with your company, legitimizing your brand, and ultimately resulting in more sales. 

4. Reasonable Fee Structure    

There’s no way around paying fees for credit card or debit card processing, but that doesn’t mean you need to overpay for a high-risk processor.

It is true that most high-risk processors do charge fees above those of standard (low risk) credit card processors, but these fees should still be reasonable. Too many high-risk processors try to price gouge vendors and retailers, knowing they have limited options to choose from.

Fees to Consider When Evaluating Credit Card Processing for CBD Include:

  • Terminal fees

  • Compliance fees

  • Statement fees

  • Monthly/annual fees

  • Chargeback fees

  • Other fees

Always ask for a full breakdown of all fees that you may incur. 

5. Contracts    

A careful review of any contract is always advisable. Some credit card processing providers will require a contract, some won’t. Generally speaking, these contracts detail both your obligations to the service provider, and theirs to you and your company. 

Some contracts lock you in for a period of time, require certain levels of processing as monthly minimums, or offer incentives in reduced rates for higher volume.

In most cases, aggressive long-term contracts should be avoided.

6. Customer Support     

By and large, payment processing runs smoothly when working with a reputable cred card processing company for CBD. However, when things go wrong, it can cause a major disruption in service, with even hours of inability to accept payments causing significant losses.

This alone highlights the importance of working with a processor with a dedicated, responsive, and solutions-oriented customer support department.

PayKings Credit Card Processing for CBD

DankGator is a PayKings partner, connecting its customers with one of the best in the business. With PayKings, CBD and dispensary clients gain access to a leading payment processor for ‘high risk’ canna and hemp businesses, and a true partner committed to their success.

PayKings’ customized solutions keep CBD businesses running smoothly, making access to affordable and reliable payment processing accessible again.

With a streamlined application process, qualifying businesses can obtain a CBD merchant account in as little as 48 hours.

Fill out the form below to connect with PayKings and never lose sleep over processing payments for CBD and hemp products again.


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