The 2018 Farm Bill Passes—What CBD Oil Retailers Need to Know about New Payment Processing Opportunities

This week, the 2018 Farm Bill was passed and signed into legislation by the president. What’s exciting about this bill is that it changes the way in which cannabidiol (CBD) is handled by law enforcement. The bill does legalize the hemp plant but does so with strict guidelines. Also, marijuana still remains illegal federally. The critical difference is that the hemp cannot contain more than .3 percent of THC, which is the compound in marijuana that causes people to feel “high.”

In short, hemp will not get you high. For decades, federal law did not differentiate hemp from other cannabis plants, and the law to make these plants illegal goes back to 1937. The 2018 Farm Bill is a new step for the country, catching society up to the fact that the hemp product CBD has proven medicinal value.


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Does the Farm Bill Make CBD Legal?

Not exactly. CBD is a non-intoxicating compound found in cannabis. Section 12619 of the Farm Bill removes hemp-derived products from the Schedule I status under the Controlled Substances Act. However, the legislation’s language does not spell out that CBD is legal. The Farm Bill does name exceptions to the Schedule I in certain situations.

The Farm Bill ensures that any cannabinoid that is derived from hemp will be legal, only if that hemp is produced in compliance with the Farm Bill, federal regulations, state regulations, and by a licensed grower. So, that’s a few more hoops to jump through to be able to legally offer CBD oil. Any other cannabinoid produced in another situation will remain a Schedule I substance under federal law. One additional exception is pharmaceutical-grade CBD products approved by the FDA.

Even though there is still room for interpretation, most in the industry are calling this a major game changer. In 2017, the market accounted for $350 million before it had any legitimacy. Signing the bill into law is expected to create a boom. The previous Farm Bill from 2014 eased some regulations regarding the purchase of CBD but this new bill relaxes those even more.

Hemp vs. Marijuana

The key here is that hemp-derived products like CBD have been separated from marijuana. This distinction is important because, in reality, one gets you high, the other doesn’t. Hemp has lots of applications beyond CBD oil, so the entire industry will likely grow.

There are still differences in the way laws interpret CBD. In the DEA framework, CBD requires a prescription from a physician. Under the Farm Bill, it does not. This could mean that CBD is broken into two classes: prescription-only and over-the-counter. As the law becomes implemented, it will be interesting to see which course CBD takes.

Farm Bill Offers Payment Freedom

After being stalled in negotiations for months, mostly around disputes over SNAP, the farm bill the conference report has been released. Pictured above corn is harvested in Walnut, Illinois.

The language in the bill doesn’t allow for a completely free system wherein individuals and businesses can grow hemp. It will be heavily regulated. However, this news is positive for any retailer of CBD oil. As long as your product is acquired in line with the language of the bill, you are legally able to sell it. This means it can also be purchased with credit or debit cards.

Even with the ability to now accept card payments, you’ll find that you will still fall under a high-risk label. This means it’s rare that you’ll find a big bank to process your transactions. You may also have to wade through lots of payment processors who say they can help but then don’t deliver. Further, it may be costlier as a high-risk retailer.

The answer is to work with a company like Pinpoint Payments. We have a domestic payment processing solution for CBD purchases. We created this prior to the Farm Bill being passed, and with its passage, the program is even more advantageous for retailers.

We have a program that can offer you better rates, quicker processing, no reserves, and eliminates issuer declines.

Even though your business is considered high-risk, that doesn’t mean you should have to scavenge for a processor. Work with a team that understands your industry and its challenges. We make the setup and implementation of your merchant account simple and stress-free.

Our approval process is quick and easy, allowing you to focus on more important endeavors like growing your business. Our in-house underwriting, risk and technical team work together on your behalf to ensure that you are ready to go as soon as possible. Once you get started, you’ll also find that we can assist with support and strategies to deal with things like chargebacks so you can reduce them and receive funds you are entitled to.

We invite you to contact us today regarding merchant processing for CBD oil. Whether you’ve been selling it for a while or plan to begin after the new bill is law, we can help. Contact us today to learn more or get started with an application.