There are many ways the Farm Bill, put forth in 2014, will impact our country. From a high risk merchant services viewpoint, it’s going to make CBD merchant accounts much more attainable.
By far, the most merchant account inquires we receive are from CBD merchants seeking payment solutions. CBD is a burgeoning industry, and the public has witnessed only a fraction of its potential. CBD is a valuable supplement, proven effective with pain relief, anxiety and PTSD, and as an anti-inflammatory agent.
The fact that CBD is extracted from the cannabis plant (and the growth, use and sale of cannabis remains federally illegal) raises red flags for the credit card brands and banks, for fear of violating federal law. Hence the difficulty in getting proper merchant services. At the moment, hemp and CBD merchants are forced to walk on eggshells, so to speak, to operate with caution while navigating regulations that vary by state. It is far from optimal.
The Farm Bill, which includes language from Senator Mitch McConnell’s (R, Kentucky) Hemp Farming Act, would de-schedule CBD from the list of the most potent narcotics (because it is derived from the cannabis plant, it is a Schedule I drug with the likes of heroin and LSD), thus making it legal for merchants to sell.
By the end of 2018, CBD is expected to be a $600 million industry, which is impressive in its own right. But imagine the CBD industry should it be de-scheduled and without resistance: The Brightfield Group, a cannabis research firm, estimates the Farm Bill will boost CBD sales to nearly $25 billion by the end of 2022.
That’s if it gets the signature of our president, who is expected to support it.
The Farm Bill will be boon to American farmers, not just CBD, hemp industries
In 2014, President Obama granted states the opportunity to grow hemp as part of a state-approved pilot program. Four years later, U.S. farmers have gone from growing a several hundred acres of hemp per state to more than 10,000. It is welcome news since the U.S. imposed tariffs on China are expected to curb the income of American farmers (Before the tariff’s, China imported most of its produce from the U.S.).
Speaking of hemp…
Hemp farming offers U.S. farmers a new and flourishing market which means a plethora of possibilities – including more jobs. While CBD has its health benefits, hemp is used in lotions and nutraceuticals while its long stalks are used in fibers, different types of clothing, plastics and bio fuel. As hemp grows, it removes toxins from soil, prevents erosion, requires little water for growth and no pesticides, which is a major pain point for growers and consumers.
In a recent blog, we made a reference to CBD merchant accounts as guilty by its association with the cannabis plant – it has minimal traces of THC, the psychoactive component of cannabis. The perception of hemp is similar – while both hemp and CBD come from the cannabis plant, they both contain minimal levels of THC, yet are classified as Schedule I drugs as part of the 1970 Controlled Substances Act.
Changes (for the better) are forthcoming
It is an exciting time for the cannabis industry, for several reasons in addition to the Farm Bill:
- The STATES Act: Huge benefits could be forthcoming, including the de-scheduling of cannabis and federal immunity for users, growers and sellers in the 10 legal states.
- Legalization in Canada (with other countries considering): As Canada will undoubtedly reap the benefits of legal cannabis, the U.S. is observing and tracking how our northern neighbors are handling its newest market.
- More states considering legalization: As Michigan recently became the 10th state to legalize cannabis for recreational purposes, there are a handful of states that are considering, such as New Jersey, Rhode Island and New York. We’ll go as far to guess that the 21 other states that have legalized medicinal cannabis are also considering legalization for recreational purposes as a result of the tax revenue legal states have generated.
CBD merchant accounts with Instabill
Instabill currently has several options for CBD merchant accounts:
- A debit card solution for storefronts which allows for easy funding.
- A crypto currency solution, also for brick and mortar merchants, which enables them to house a digital currency ATM and POS device that converts cash to crypto (and vice versa) for easy payment.
- A credit card processing solution with a shared billing descriptor.
We value one-on-one conversation with all merchants. Speak with a live merchant account manager at 1-800-530-2444, Monday through Friday from 8 a.m. until 6 p.m.