The 2018 Farm Bill federally legalized hemp-derived CBD with less than 0.3% THC — and opened a new market for thousands of businesses. But payment processing for CBD remains complicated. Most major processors still decline CBD applications.
Why CBD Businesses Face Payment Processing Challenges
Despite federal legalization of hemp, CBD sits in a regulatory gray zone for most payment processors. The primary concerns are: (1) state-by-state legality variations, (2) proximity to cannabis (which remains federally illegal), (3) high chargeback rates in the supplement category, and (4) FDA restrictions on health claims that create compliance risk.
Which CBD Products Can Be Approved
Tinctures, topicals, capsules, and pet products derived from hemp with less than 0.3% THC are generally approvable. Products with explicit health claims, ingestibles sold as supplements with drug-like claims, and anything marketed as cannabis or marijuana are significantly harder to approve or cannot be approved at all.
What Processors Require for CBD Merchant Account Approval
Successful CBD applications include: Certificate of Analysis (COA) from a licensed third-party lab confirming THC content under 0.3%, documentation that products are hemp-derived, compliant website without prohibited health claims, clear return and refund policy, and prior processing history if available.
Getting Approved for CBD Payment Processing
Daystar works with acquiring banks that specifically underwrite hemp-derived CBD businesses. Processing rates typically run 3.5%–6% for CBD, with rolling reserves common for new accounts. Apply through our standard application and indicate your product category.