A Big Step For Online CBD Stores

Shopify just announced that they will be allowing the sale of hemp and hemp-derived CBD products on their platform officially for certain states! This news is a big step for the CBD industry because there is finally another a big website/e-commerce platform jumping on the hemp bandwagon.  

The question we get most often from our customers is, “do you know of a platform that allows the sale of hemp?” and usually all we can offer is WordPress and Woocommerce or a suggestion to do your own research and find another platform. We now have another option for our CBD drop shippers and wholesale partners as Shopify has updated their policy.

 

shopify instagram cbd announcement

@shopify on Instagram

CBD Merchant Processing 

The other big blocker in this industry is finding a merchant processor that allows the sale of hemp. That’s where Shopify gets a bit tricky. Shopify will allow you to have CBD and other hemp-derived products on their platform, but they still won’t allow you to use their merchant services to process credit card paymentsThis is the same for Woocommerce and any other eCommerce platform as the banking regulations for CBD have not yet been established. They do however offer a few suggestions as to which merchant processors customers can use including eMerchant Broker, DigiPay, and Authorize.net.  

The other catch with Shopify is that they are only allowing customers in 40 states to sell on their platform. As of right now that excludes Alaska, Delaware, Hawaii, Idaho, Iowa, Minnesota, Mississippi, Nebraska, New Hampshire, South Dakota, along with the District of Columbia. The reason for this is because Shopify is only allowing states where the sale of hemp and hemp-derived products are supported by state and local laws.  

High-Risk Merchant Processors and Banking  

We understand that it can be hard finding merchant processors and banks that support the sale of hempPayment processors like eMerchant Broker, DigiPay, and Authorize.net offer solutions for hemp companies, however, these are known as what is called “high-risk processors.” Due to the banking regulations not being set for hemp and CBD, businesses like ours must use these high-risk processors for the time being.  It is good to note with High-Risk Merchant Processors they’ll likely want 6-8% or more per transaction. 

As a hemp business owner, you will still need to find a bank which will allow you to deposit and keep your funds safelyIn our experience over the last 6+ years, we recommend starting with a smaller bank like a local credit union to begin with as they are more likely to allow you to keep your money with them versus the big banks. It’s also good to know they will ask you for A LOT of information. If you have opened a business account before, prepare to be shocked at how much more difficult it will be.   

One bigger bank that recently got into the CBD space is Chase Bank who is backing Square. Due to the change in Chase’s policy, Square is allowed to offer merchant processing to certain CBD companies. However, they are currently in the trial phase of allowing CBD companies, so only large CBD companies processing more than $10,000/ month have access to this potential solution at this time. (Written on 9/18/19) 

For smaller businesses, eMerchant Broker could be a good solution with processing times in as little as 24 hours. They claim a 95% approval rating.  

DigiPay is also a great option for small businesses, especially if you are planning to have a more niche company with only a few product categories. They offer fast-track approval, a full credit card suite by product offering and 3-7 day underwriting. DigiPay also fully integrates with Shopify making it easy to get set up with both platforms.  

Finally, there is Authorize.net which allows you to pick and choose the services you need. You can get their all-in-one package which includes a processor and payment gateway or go with only their payment gateway. They also offer solutions for large companies processing over $500K per year.  

Though we see these options are available, we are not currently using any ourselves and therefore recommend researching and vetting each yourself to figure out which solution is best for your business.  

Getting Signed Up With Shopify 

So, how do you get signed up with Shopify? Their website includes all of the instructions but in short, you first must have an account with them, after making or logging into your existing account you must fill out a form called an “Attestation for the Sale of Hemp and Hemp-Derived Products.”  

This form is basically your chance to prove that you live in the states they allow sale in and that your products follow their standards so that you are able to sell on their platform. The form includes all of the requirements that you must follow in order to use Shopify for your CBD store. You can read more about this form and the requirements by going here 

How This Affects CBD Dropshippers 

It may not seem like a big deal that Shopify opened up their platform to a few states, but this is a big step in the right direction. With large companies like Shopify beginning to warm up to hemp that means that more will follow and hopefully fast. As more and more companies enter this space it is imperative that customers have access to reliable platforms and merchant services 

As always, we will stay up to date with all the changes in this industry and keep you informed. To get started dropshipping CBD products, fill out our partner form or contact your sales representative at 844-887-4367 and press Option 2.