CBD Banking for Your Small Business

CBD Banking

CBD banking is a complex issue even though the 2018 Farm Bill legalized the substance for commercial sale. Unfortunately, many CBD start-ups and small business owners are unaware of the problems with CBD banking when beginning their business journey. What’s worse, they often find themselves scrambling last-minute to remedy problems caused by their nervous banks and frozen bank accounts.

Notably, common hemp banking issues need not deter anyone from starting their own CBD business. With a little research – and the proper compliance documents – it’s totally possible to secure reliable, affordable CBD banking.

CBD Banking Problems Explained

CBD is one of many valuable components that develops in cannabis. Importantly, CBD comes from both marijuana-type cannabis and hemp-type cannabis but is only legal when sourced from hemp. The problem is that hemp and marijuana look, smell, and taste exactly alike. In fact, certified lab tests are the only way for banks to confirm that businesses source their CBD only from hemp.

Adding to the issue is the variable legal status of hemp CBD nationwide. Importantly, though the Farm Bill legalized commercial CBD nationally, it also gave states and tribal territories ultimate jurisdiction, provided local regulations are at least as restrictive as federal CBD laws. As such, CBD’s legal status varies between locations, including which products are and are not permissible for sale.

Finally, banks must only serve compliant cannabis companies. Those who make false claims like implying that their CBD products are medicinal risk federal fines, and so do the banks that serve them. As such, banks must be extremely diligent regarding the accounts which accounts they hold. This puts an extra burden on banks to confirm that CBD businesses do not break compliance laws and often results in frozen accounts until the issue resolves.

CBD-Friendly Banks and Payment Processors

While some banking institutions remain apprehensive about doing business with CBD companies, others are taking it in stride. The following are a few CBD-friendly banks you can use to manage your business’s income and expenses. Notably, compliance is crucial to maintain good standing, so businesses must always retain proper regulatory documentation.

Chase Bank

Chase Bank has recently opened its banking services for CBD companies, though it will likely wait until the SAFE Banking Act passes to offer merchant processing. Notably, this nationwide banking provider has a rigorous vetting process and monitors account-holders business transactions closely to ensure everyone remains on the straight-and-narrow. Keep a precise record of all proper compliance documents on-hand and accessible.

West Town Bank and Trust

West Town Bank and Trust offers banking and merchant processing to the hemp industry. Compliant businesses with a history of best practices including testing, product monitoring, and destruction plans are most likely to land an account within the entity, and may qualify for business loans with the proper qualifications, as well.

Evergreen Gateway

Evergreen Gateway provides merchant and banking services to compliant companies in the cannabis space. This digital banking solution prides itself on its well-rounded e-commerce solutions and knowledgeable team of legal and financial advisors.

PayQwick, Inc.

PayQwick is a PayPal-esque online payment processor that uses a closed-loop system to allow cannabis-based businesses to conduct transactions legally. The company takes compliance very seriously and diligently tracks all transactions to ensure that all activity meets regulatory standards.

Alpha Merchant Bank

Alpha Merchant Bank is a nationwide banking provider that specializes in cannabis banking and compliance. The private bank serves many high-risk industries including cannabis, gaming, and adult entertainment using cryptocurrency to help businesses always maintain control over their money. Their cryptosystem requires no contracts or convenience fees and is often more affordable than other high-risk accounts.

Final Thoughts About CBD Banking

Your CBD store has incredible potential – if you can process transactions. Fortunately, there are many CBD banking solutions that don’t always include excessive fees. Use this list to reference CBD business banking options for your CBD start-up.

Contact us to source the best CBD products for your store or sign up for our newsletter to learn more about starting a CBD business.  

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