How To Get Approved For A CBD Merchant Account

VIDEO TRANSCRIPTION

Hey, everybody. What’s up. It’s Justin Owings live from B2B Vault: the payment technology podcast with your host, Allen Kopelman. And we’ll be providing you with educational information about business payments, FinTech, decentralized finance, and the technology businesses use in today’s world. And in today’s podcast, we’re going to be talking about CBD, hemp, cannabis, kratom, and all that stuff that makes you go yay. Yeah. All right. So today we’re going to start with that. So there are a lot of things going on in Congress and states. And you know, different rules and laws. And then we have a new bank that’s offering a very good program for CBD merchants. So we’re going to talk about today, like what are they offering and how we can help CBD businesses and other businesses get payment processing. Real quick! We got shout out. John Hart Tees. The Hart Tees for the B2B Vault shirt. Check it out.! Be part of the B2B Vault community #smallbizshoutouts. Get in on it today! Join the Facebook community and B2B Vault community. What’s the name of the community? The B2B Vault community. Find us @B2BVault, find the Facebook page. There’s a link to join the group. Do that! Or find the group, one or the other, @B2BVault. Yeah. So I was checking through all the news stories when we wanted to talk about CBD and there were quite a few news stories out there. The first one was about how the FDA is warning hemp businesses, not to make CBD for animals. Why?  I have no idea, they didn’t go into specifics just saying that they gave warnings to companies making CBD products for both pets and large animals. I think what they’re, some of the problems with that is is some of like what we’ve talked about before dosing. Oh yeah. Right, right, right. How are they controlling the dosing and is it staying mixed up? So people don’t know, right? Right! They don’t know. So, you know, like if I was using most of the stuff that I have seen personally like I’ve given Rocky, he gets some little CBD in his water to keep him, you know, I buy the stuff and it has zero THC in it. Right! But I don’t think everything is like that. So I think you need to just check what you are buying. You get your cat walking around high as a kite man, plus, you know, how much what’s the dosing? Like, what are you, you know? Cause it comes in a bottle you’re putting a bunch of drops. Right? Are you reading it? No. People are on. People are not that intelligent. So how many drops we’ve talked about it? Like. Right. I’m just saying if you have a small animal, but I’m just saying like there’s whatever. I just think like a lot of the things having to do with CBD have to be done with dosing, you know? And then another thing that’s in the news is this whole Delta eight thing. And what’s going on with that? I’m confused about Delta 8. I’m 42 years old and I understand Delta 8, 9, 10, 11, 12, 14, 15, 16, 17. They’re talking about a new thing called the hemp advancement act. But now they got a problem because you have a bunch of states that decided this is where I don’t get, I don’t understand government. Right. You have a federal law, but then you have states that make their own rules, which I don’t agree with. I think if there’s a federal law, the states need to follow the federal guidelines and that’s it. You know, there shouldn’t be, there should be one set of rules. Is there more than one set of rules for alcohol? Um, yeah, I think some states have, will say, try states, there are some dry counties and there’s also, there was for a while. There was. I’m talking about the regulation of alcohol as regularly.  The regulation yeah, there are a lot of different rules. Like, can be ship wine from California? Some states allow you to get, get it some states don’t and, you know, cause they can’t, they feel like, oh, they can’t control whether the person that’s receiving it is of age and how are they going to control that? So I like the FedEx guy who comes to the door and goes, Hey, can I have your driver’s license? They don’t need that. I stopped that they stopped signatures during the pandemic. Cause you can buy alcohol online. Right? All you do is click. Yes. Right? You are 21 or older. Exactly. That’s what I’m saying. So some states have rules against it. Some states have limits. You can only get a certain amount of bottles or cases a year shipped to you. Really? Yeah. There’s a lot of that. There’s a bunch, a lot of rules, California, as a lot of. And then some states have rules preventing you from order. Cause they want you to go to the liquor store versus buying it online. And then, so this whole thing. So now there’s Delta 8 is currently legal in 31 states, right! And then, so that’s a law, a whole long list of places, Florida, Florida is legal, but that could change if they pass house bill  679, the proposed bill aims to create regulations for hemp products even ban hemp-derived Delta 8, THC entirely. And I think some of that comes with, so they are talking about getting rid of it entirely down here? Getting rid of Delta 8, but I think part of that comes from that, there are a lot of Delta 8 out there, 9 and 10 that are not made with hemp. So that’s part of the issue. And I think that that needs to get taken care of in the hemp bill. What is the, you know, what is Delta 8? And is it if it’s only derived from hemp illegal? Because basically, that’s what the law says. Now, the federal law, if the Delta 8 comes from hemp it is legal. It is legal. Right! And it does. Not all of it! How can it not, if it goes over the 0.3%, the THC plant is just breaking the rules. Right. So that’s why there’s a problem. Yeah. There are definitely a lot of problems with the whole thing. It just needs to be legalized. Then you had to really, federally legalize recreational for 21 plus. Yeah. So the reason is that it’s just the Delta 8 the confusing part is, is that the farm bill says it’s got to be 0.3%, and then it’s not supposed to be over that. And a lot of people are using products that are over. So I don’t think that then you’re mass-producing something like that. I feel like wouldn’t it be like it’s gotta get pretty difficult. Well, I guess not because it’s just a matter of, they gotta, they gotta figure out how to control it yet. The product and control it better because believe me, I had a guy the other day, who wanted to get set up. I looked at the, that a whole bunch of Delta 8. They go, can you get this done? I go, yeah, it’s all derived from hemp. The guy goes signs. I said, well, you got to get a report showing that. I was on the zoom call and that is why I like to do zoom meetings. When I talked to High-Risk merchants, I see their faces. Yeah. Well like, oh, is that the right? Like my getting the right answer. He could tell you someone else. So I just, you know, it just kind of. No, we went to that show and I was asking a couple of the people they’re like, oh, is the Delta 8 derived from hemp? Oh yeah! A couple of them definitely looked like hum! A couple of them didn’t say a man-ago, Yes! I’m definitely not going to answer that question right now. So that begs the question, you know, how. ’cause, what can they say? Oh, Delta 8 is legal only if it’s derived from hemp, okay, well, that’s, who’s going to monitor looking at all the COA the certificate of authenticity, or whatever you want to call that of the product. I guess that’s what I meant by like regulating it. Cause at that point, wouldn’t it be so much easier to regulate something if it was just. Like, okay, this is CBD, this is THC. Yeah. But what they like what they’re trying to do, like, and shout out to all you crazy mad thinkers out there, that file an entrepreneur that found the loophole in there and created this whole lane for you, but do it right to him, man. I don’t know. Just follow the rules because otherwise, you’re going to see more. You know, and it’s just going to make it harder for us. It’s going to make it harder to get the product out there and there’s going to be a redo of this farm bill first, there was going to be the farm bill 2022. Now they’re talking about the new farm bill for 2023, and they’re hoping that the 2023 farm bill’s going to be liberal enough to start opening the door for marijuana. Now, if it starts opening the door for marijuana, right? Maybe some medical marijuana. Potency to be sold, you know, then Delta 8, obviously Delta 9 can all be included in that, but at the same time, I think that that stuff needs to be monitored. I mean, I see a lot of this stuff in gas stations. Oh you know nobody is regulating that stuff., No, but I’m just saying. You need to like, like I tell people like, oh, you want to get approved? No problem. We need to see a list of all your products. You need to have links to the manufacturer’s website with the tests. Right. That’s all they want to see if you have products there, CBD products, Delta 8 products you’re in one of the states where it’s illegal, right? 31 legal states, right! Including Florida right now. Then we can get you set up, but they want to see what are you selling? They don’t want to, you know, and I look at it and even Kratom them. They’re going to allow Kratom, this is just for retail, a retail store. They may have a point of sale. And they’re going to track your inventory. You know, it’s smart. You want to do business the right way. You want to have a smoke shop and you want to sell CBD and advertise it and sell Kratom and advertise. We have a program for that now, it was kinda like, oh yeah, you can do it, but you really, you can, we can process it, but you really couldn’t advertise it. Now you could flat out advertise it. So Kratom them as a different, the whole little, I don’t even understand it. We’re at that show member, we saw guys with barrels full of it. I was like, I don’t understand what it is? I don’t know? I don’t know why people would need to smoke it. I don’t know. I don’t get it. Do you smoke it? I thought you eat it? I think you can do both things. Smoking. Some people turn it, put it like in tea or coffee, and then drink it. I don’t know, I’m not down with that, but also like there’s all these edible products out there, like, you know, edible products. Yes. You know, and that’s where the dosing comes in is like, okay, well, these people are just making the stuff in their store taken up. You know, they’re making a chocolate, they’re dropping a bunch of Delta 8 in there. Right! And then they’re spreading it out on a sheet and cutting it up in this square. No, I don’t think you should be allowed to do that. I think it’s got to come from a factory where they’re controlling, how much stuff goes in there. They’re putting the little eyedropper on each little candy and yeah, I can see that, is caused when you’re cooking. No, I’m saying it right now. You pour it out. Well, I feel a little too much in this corner of here, now it’s not 0.3 anymore, now you got a whole different thing. You’re like the person’s at, oh, I’d say the cookie, this was nothing, and now they’re eating five more cookies. Well, not just that, they’re just like they got higher than they thought they were going to get. That’s what I mean? Oh, I only ate one cookie was so sitting in a corner. I think it, I think that there’s going to be a big push that these products need to be all hemp, a hundred percent hemp. Right! And the products for pets need to have zero THC in there and, so on and so forth. Yeah, man! I mean, I don’t know if the, my, I wouldn’t give my dog or I guess I would, I wouldn’t care. I don’t know if it’s okay. Like if it’s been, you know, like there’s been, studies. But he gets nervous when it rains. It’s talking about CBD, I’m talking about THC. THC is a whole different monster, man. So let’s talk about what products are. So like the new bank, some banks they’re, don’t support all these products. This is a really good program. And I think that in the future, this, this bank’s going to support marijuana. I have a feeling, “the new bank”? Yeah! They’re going to say, well, they’re not new. They just introduced, they did a pilot on the program and now it’s out there.  Where is the bank out of?  So, I don’t remember. We don’t want to talk about and that they probably don’t even want their names. No, but like in debt ingestible products that come in oil tinctures administered under the tongue were added to the food and beverage. Good. My wife loves those right. Edibles, food, and candy right there they’re taking those. Obstacles oils, swabs, lotions, and ointments used infused with CBD are applied directly through the skin. That was always easy to kind of get done. E-cigarette products with CBD in them are for retail only. Okay. Before that is a big no-no, but they’re allowing that, like I said, they want to see your inventory. So at this bank, these are lists of all the products the bank has actually accepted. Yes, they’re going to for retail, not for the internet, for the internet then we’ll go over the list for the internet, but the flower they’re taking the flower, Kratom, retail only. As I said, they were retail only there. The Delta 8 retail only, not internet, because you can’t have that. They can’t control that. You could ship it to buy flower by flower online, but you can buy Delta 8. That is absolutely ridiculous. And they’re following this law, right? They’re following the state laws. So they have to follow. This is crazy, but, you know, listen, but then you can, then I know some kids got arrested for doing this. What’s that? What would you say? You got to have a merchant account and it needs to be under 0.03. So not shipping weed in the mail, right? Listen. Kids stop doing it. Listen, if you don’t think like the FBI or the DEA, they see someone selling flowers on their website. I can’t guarantee you. Yes. Every single website, secret shoppers. Yeah, they secret shopping and if they get delivered some marijuana, boom, that’s quite common. I’ve seen it already a bunch of times. That’s how they, isn’t it. How he busted Cheech. Cause he was selling bongs. I don’t know if he was, I don’t know. No, I think he was selling hemp, but he was selling that. So when they busted Cheech or Chong, I don’t know whichever Tommy or whatever, the guy’s name, Tommy, John. Tommy Chong and was the Cheech, whatever one of those. So Tommy, the older, the older guy. Yeah. Well, they’re both older, but anyway, Tommy Chong was, so he had his own bongs, like smoke smoking apparatuses. His son was operating the business. He ended up shipping those bongs. I think it was to California and the feds came because that’s what they were like, they had an investigation going. And so they did a secret shopper. Some in like, in that, in that way, bought something from the company, they shipped it, to the DEA. And the next thing, you know, Tommy was facing lots of charges. Yeah, it’s crazy terrible CBN, which I’ve never even heard of. This never said it’s a small quantity, I don’t know. That’s taken that too in a retail Kristalina, the mildly psychoactive cannabinoid found in very small clown quantities in cannabis. Yeah. As long as it’s hemp, as long as it’s made from hemp, they’re taking it now. Here it is a prohibited product. Okay. So anything that’s over the 0.3 regarding. It’s not acceptable. But the other stuff like this stuff, like I remember when I saw this the first time on a website, I was like, what the heck? I mean, it looks like crack cocaine. It looks like crystal meth, right? No way we’re talking about shatter. So we can, you can’t show shatter regardless. Shatter, hash crumble, they’re not taking that. What is crumble? That’s, it’s the same thing. It’s like, well, it looks like Crack. All this stuff looks like crack that they’re talking about. The Crack is whack! Then they’re talking about this, I don’t even know, Terpsolate, so they’re not taking that. Wax is also similar to the shatter and the crumble with all the same thing. Dabs, they’re not doing that. I didn’t even know what that was. I didn’t really look all these things up HHC. They’re not letting that happen because roughly that could be stronger than marijuana and dabs can do Delta 9 Delta 10. THC zero, which I didn’t even understand. It’s three, a product called THC zero is three times stronger than normal Delta 9. That’s crazy! And you got to, you’re going to call it a zero? Okay! So basically the way, the way they’re dividing the merchants up, you’re in a category one, two, or three. So in category one, if you sell 50%, let’s say you are, you have a smoke shop and you sell vape and can’t, and the CBD products are less than 50% of your revenue. They’re going to look at the pictures. That’s online, everybody’s business, it’s on Google. Whether you want it there. You’re going to, I tell you, I Google the smoke shops sometimes when they come to me and I’ll Google them up and I’ll see pictures of bongs CBD. Vapes glass pipes. And what I’m looking for is before now, I don’t care. You can have the Kratom, right! But before you couldn’t have the Kratom in the picture no way a bank would not accept that they didn’t care about the CBD in the pictures. They cared more about the Kratom, now you can have this bank stake in the Kratom. So if it’s less than 50%. You,  only have to show the, you have to show your inventory items with the tests, with the links to the tests, right? So your retails to work your sound, your spreadsheet, then a link to the website where all the tests are. Boom, you’re done. You only have to do it once a year, but the best way to do it is to get the POS system that this company sells. So all your inventories are in there, then you don’t have to worry about it. Okay. And if you’re interested about set in a point of sale system, reach out to Allen. We can connect on social media, B2B Vault, look out for him on LinkedIn, Allen Kopelman, connect with him there, and he can help you out. I’ll give everybody free 15-minute consultation. Yeah! Whoa, you have to talk to me and Justin, if you want that’ll cost you I’m kidding. No, I’m kidding. No, but if you do, so let’s say it’s just the CBD store. Now you just got to submit the whole list and everything, and they’re checking like your advertising to make sure you’re not advertising, breaking any rules at the FTC as for advertising. So, you know, it cures this or cures that. But they’re very liberal. We showed them a website and it said, oh, eat these special gummies. They make you feel good. They were excited. They said, oh, that’s good. They’ll take that. Some other banks are not down with that. There is some proof they’re pretty liberal when it comes down to that. Then businesses that service the CBD industry could be selling products like pipes and rolling papers. We’ve always been able to get that kind of stuff down here.  Now for e-commerce. So what do you mean like for like a head shop? You’re saying like, like head shop online. Like I have a client, one client, they sell rolling hemp rolling papers that it took basically you can buy it, but you got to buy a whole box of them, but yeah. And they’d sell it online. So they have, you know, we have people like that I have this guy that has a humidor. I almost got his merchant accounts shut off. Cause he put on there. Oh, keeps your weed fresh. He can’t say that “keeps your flowers fresh”? Yeah, you can say it keeps your flower fresh and keeps your product fresh. It keeps your hemp fresh. It keeps your smoking products fresh. They just can’t say the word weed or cannabis or marijuana. They don’t want to see that on your website. Those three words, you cannot say. It’s like George Carlin’s memories to have the seven dirty words you can’t say on TV probably less than seven now. Yeah, there’s definitely less than seven. Now. I remember when one time like there was a re I don’t remember what it was that it was an actress. She was one of the ones on Dallas. And she came out with some show had, is with the B-word. And then Johnny Carson went crazy and he said it like 10 times. Really! We won’t say that because if you say any words like that, your podcasts get booted. No, no. The podcast gets like. You get like an R-rated. Yeah. You ask you the little asterisk on there. So the same thing e-commerce you got to show all your products, all the links to the cos, or have them posted on your website. Obviously. Yeah. Retail stores don’t post them on their website, but maybe it’s a good idea to post it all there. So the customers before they come in can see your products and see all, the tests, but that’s not always doable in a retail store. So that’s all good. And you know, and this is good too because let’s say you have a website and you don’t sell all CBD. Maybe you sell makeup and you have some CBD products or you sell vitamins and then you sell CBD and you really want to market that CBD. Now you can do it. So let’s say you have a vitamin store. You want to start pushing your CBD on your website. And it’s not, it’s less than 50%. I just got to make sure you got the compliant stuff, everything, all the tests up on the website, boom, get you a merchant account. It was really hard to do before and those merchants didn’t want to pay the higher rates. This isn’t, these rates are not through the roof. Right? Cause it’s gone through a regular bank and they have the CBD program. You know, they want their website recording. You have to have age verification on the website, you know, be compliant. You know, I tell people to put 21 that way you’re compliant with everybody. You know, you need to be, you know, click a button. We do the same, the same exercise we do with CBD. We do with people who sell vape online, sell cigars online. It’s basically the same marketing claims, no product marketing diagnosis, clear cures, migraines treats prevent any diseases. You have to have an FDA disclosure, the same thing. Cigar shops all have to have FDA disclosure, you know, that indicates these statements have not been evaluated by the FDA. These products are not intended to diagnose, treat, cure, or prevent any disease. You know, you need to have shipping controls, make sure they know. If there is a state where you can’t ship to you have that block in your system so they can check out, you know, and you have to have all your certificates of analysis on your, on your website. I call them for now because authenticity, you know, I always tell people like, you know, who’s watching, you know, you have this operation CBD deceit that’s run by the FTC. The FTC is watching your business, and the FDA watching your business. What is it called? CB operations CBD deceit with one D CBD. See CB deceit yes, CB deceit. Yeah. Cause they want to stop they are targeting CBD companies for advertising unapproved health claims on their product. Like good for aches and pains, not addictive, cures cure, hepatitis C cures, anxiety, and mood swings may help with focus and memory. That one you could say, but you can’t really say cures this. Yeah! Oh, we’ll cure your pain, powerful pain. You know, you can’t say that pain reliever. Yeah. You can’t say what it might do. Everybody’s watching this, like from any standpoint of business. This business has more eyes on it than any business we deal with. How many do you got, usually, you got to know, usually you have, I mean, listen, like we have a fence? We do adult, right? No, I’m just saying for a regular typical business. I mean, nobody, no, I mean, you got to file your tax. You got to know what I’m saying. Nobody’s watching your business like that, right? Not like this and the taxes that’s about it. No, no. I’m saying like, if you’re doing the nutraceutical product, vitamins right. Okay, you got the FDA and the FTC watching you here. You got the FDA, the FTC, the DEA, and the USDA. The USDA is monitoring the plants to make sure the plants are under. That’s four different Government agencies, four different alphabet boys running up on you, man! Yeah! And don’t forget the FBI, if you’re selling flowers is probably or the DEA is, is see, you know, the FBI is definitely somewhere there secret shopping sites. Exactly, man. They’re secret shopping sites. Listen there’s and you mentioned you got the state and local police, the government on top of your neck. So some other good examples of companies who support the business, like people that sell fertilizer for hemp, they sell plant seedlings for hemp. They sell the grow lights, right? All those businesses as their support businesses to the marijuana industry and the CBD industry, we can get all of those approved. So people will take that, even the marijuana doctors, we have a bank that, not this bank, but we have another bank that takes that, so it’s very, you know, this is a very good liberal program, especially if you’re a retailer. Because before you could be like a smoke shop right prior to this program, you can be a smoke shop, and then you have CBD, but you couldn’t really advertise it. Now you can go all-out advertising, but you got to play by the rules. You got to play by the rules. That’s how we all got to play by the rules. Right? So if you play by the rules, you can do this. If you want to learn more about this program, hit the link. Justin will put in the show notes. Connect get a 15-minute phone call. We’ll go over the program with you, explain everything, how it works, and what you have to send in to get an application started. This is a really, really good program. I know a ton of businesses out there probably have Kratom and they can’t advertise it. Now you can go all out and advertise it. You won’t lose your merchant account and won’t get shut off for selling Kratom. If you have been shut off for selling Kratom or CBD, this is also an opportunity where you might be able to get, even if you are on the match list or you got closed down, you still might be able to get a merchant account. So that’s another possibility with this program because they will be looking at the who, what, where, and why you got put on the bad boy list. Bad Boy Bad Boy what are you gonna do when they come for you anyway, follow B2B Vault on social media at @B2BVault and catch us on Twitter, Instagram, Facebook, LinkedIn, and follow us on Tik Tok to catch all the wild goofy shenanigans with Allen behind the scenes. On Tik TOK, good stuff. Samantha catches some great, great, great stuff. Samantha. Shout out to Samantha. Samantha’s awesome! Yes, Samantha, the graphic designer and social media coordinator here at a B2B Vault. She kicks arse. 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