Confusion and excitement often go together, and this has certainly become the case within the financial back-end of many CBD startups.
Luckily, new developments from established companies that handle many enterprises’ finances could help to clarify how companies selling CBD can move forward into the promising market for hemp products. In particular, one of the most popular transaction processing apps and hardware companies, Square, recently rolled out a new program for CBD sellers.
Square is a high-profile software and technology company that is ubiquitous among restaurants, retailers, bars and nearly anywhere you might want to sell anything. Actually there’s even a good chance you might find a girl scout troop or two that has a Square chip in their mom’s phone to process your credit card.
In most areas of business — financial rules surrounding lending, credit and interest among others, entrepreneurs can rely on relatively easy to follow laws that allow them to pursue their commercial interests as they wish.
In the CBD realm, where state laws often differ despite the federal legalization that came with the 2018 Farm Bill’s passage, that’s not always the case.
Reporting from Forbes shows that the payment processing company Square has, with little fanfare, launched its own pilot to deal with CBD company. [1]
“Square is currently conducting an invite-only beta for some CBD products,” a spokesperson for the company told Forbes in an email.
According to Forbes, some payment processors, like a subsidiary of US Bank, have recently chosen not to process payments from hemp and CBD purveyors because of regulatory or legal uncertainty. [1]
The same legislators who authored and lobbied for the farm bill that legalized hemp, Sen. Mitch McConnell (R-KY) and Sen. Ron Wyden (D-OR), have recently sent out pleas for federal agencies to clarify financial rules around CBD products and businesses. [1] [2]
This doesn’t mean the fiscal side of things is the only area where peaceful and well-meaning sellers of CBD and other hemp products face confusion. The Food and Drug Administration of the federal government has ruled that it alone has regulatory power over CBD in food and drink substances, for instance, and state laws differ on how to handle it. [2]
“I’ve had constituent businesses tell me that their access to financial products, specifically card services, have actually deteriorated since we descheduled industrial hemp in the Farm Bill,” Rep. Andy Barr (R-KY) told a committee. “This obviously conflicts with congressional intent.”
Apparently, the main issues facing CBD retailers in some states surround Federal Deposit Insurance Corporation, or FDIC, rules for the substance and its sale. [2]
Keep checking in at the Nothing But Hemp blog for more on CBD topics, and keep speaking up for legal and safe CBD!
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