The Three Big Hurdles to Sell CBD Online
If you want to sell CBD online, it’s going to be a bit more complicated than setting up an eCommerce store and posting your products within an hour.
While popular eCommerce platforms like Shopify and BigCommerce make it easy to spin up a store, selling CBD oil, vapes, and other products put you in a “high risk” category with merchant processors and others.
What does that that mean exactly? Well, although the farm bill passed legalizing industrial hemp production, it did not make CBD oil legal. It’s something that will have to go through the FDA, and there isn’t a clear signal of how they are going to weigh on it. That’s just one of the “risk” factors that merchant processors and banks look at.
But all is not lost, there are plenty of CBD brands selling their products online today and CBD oil and products with less than 0.03% THC are legal to ship across all 50 states. Confusing right? But how do you get started?
Hurdle 1: Get a Business Bank Account
While that doesn’t seem like a hard thing to do, a number of brands I’ve worked with have trouble with this first step. My advice here is to try your smaller local/regional banks and credit unions.
They are more likely to work with you than a large bank that has shareholders and board of directors to answer to. One bank in particular, SunTrust Bank, is well-known in the industry to be CBD-friendly.
If they ask you what your business is, the best thing is to do is just tell them the truth. Don’t hide behind “health and wellness”, be upfront so you’re not surprised later if they shut down your bank account when they find out.
Hurdle 2: Get a Merchant Account
This may sound a little confusing, but in simple terms, you’re going to need a merchant account and bank to process your online credit card transactions.
Here’s why it may make a little sense, if you were planning to use Shopify for example, they have Shopify Payments or Stripe to process online payments. Those two are not CBD-friendly and if you try to fly under the radar, they will find you. Not just with Shopify, but any other major merchant processor like Square, Braintree, etc.
What’s even more scary is that I know some brick-and-mortar CBD brands that are using these major processors and are flying under the radar by not using “CBD” and other terms in their product descriptions. This is EXTREMELY risky, if they were to find out, they’ll shut you down without any warning.
Could you handle that kind of disruption to your business? Also, say you have a competitor who wants to “take you out”? They could call up Square for example and tell them your store is selling CBD products on their platform and they’ll shut you down in a second.
Finding the right merchant partner is difficult. I have a handful of fully-vetted CBD-friendly merchants who can help you. Head over to the Contact Me so I can talk with you and understand what you want to do and sell and I’ll make the introduction.
Hurdle 3: Find a CBD-friendly eCommerce Platform
Finding a hosting provider or eCommerce platform to host is pretty simple, however, finding one that is ok with you selling CBD oil and products is a little tricky. Make sure you read the terms of service and acceptable use policy to see if there’s any restrictions around it. The last thing you want to do is spend hours building your store, getting your products ready to launch, and then get told by the platform or host that you can’t sell those products and have to move.
Another big decision you’ll have to make is whether to go with a templated/proprietary eCommerce platform or open-source platform to build your store. I’ll go into details in another post as to why, because this is one of the most critical decisions your future self wished you had spent more time on.
Now Go Sell CBD Online!
So now you’ve got your business bank account, your merchant account, which will probably take between 3-6 weeks right now, and your eCommerce platform, you’re ready to go! Now it’s time to bring traffic to your online store. But now you’re faced with some more hurdles, as in, you’re not able to do paid advertising on Google or the major social media platforms. Stay tuned for my future posts on how to drive traffic to your online store without paid advertising.