The CBD industry is growing at an exponential rate. In fact, the global cannabidiol market size was valued at USD 2.8 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 21.2% from 2021 to 2028 [1].
A large number of CBD agencies are now opening up all over the world. CBD is becoming popular because people are becoming more aware of its applications, including the treatment of sleep disorders, stress and anxiety, pain relief, and other conditions [2].
However, the industry also faces a number of challenges including lack of regulations, payer-carrier issues, and banks not being willing to work with them.
Here we’ll discuss some of the challenges they face in highly regulated markets and what CBD agencies can do to overcome these issues.
Key Take Aways
Regulatory uncertainty: CBD remains a grey‑area industry with inconsistent legalisation across jurisdictions, making banking relationships complex and opaque.
High‑risk merchant categorisation: Traditional banks and gateways often refuse CBD clients, forcing operators to rely on specialist high‑risk providers with steep fees and tighter terms.
Limited payment gateway access: Many common online payment processors avoid CBD merchants, restricting major credit‑card acceptance and reducing customer convenience.
Alternative payments adoption: CBD companies increasingly turn to cryptocurrencies, offshore merchant accounts, and payment aggregators to bypass mainstream restrictions—albeit often with higher costs.
Banking hurdles persist: Ongoing uncertainty around cannabis regulations deters traditional banks and correspondent banking partners from servicing CBD businesses.
Provider selection criteria: Businesses need payment providers offering compliance expertise, robust security (encryption, tokenisation, fraud tools), multi‑currency support, POS/ACH options, chargeback handling, analytics, and responsive support.
Challenges for CBD Businesses
Credibility and Transparency
The CBD market is still largely unregulated. This can be seen as both an advantage and a disadvantage for businesses within the industry. There are high risks associated with doing business that isn’t entirely legal worldwide, but it also allows for substantial growth opportunities because many agencies have not yet cornered the market.
When entering into new industries, especially those that are risky or potentially dangerous, you want to be able to build credibility with your customers through transparency. If you want people to trust you enough to send their money your way, they need to know that you are both legal and transparent about who your business is. CBD agencies must build credibility with their customers through transparency in order to compete.
High-Risk Merchant Accounts
As the CBD industry becomes increasingly more saturated, it’s becoming harder for new CBD companies to enter into markets where there isn’t already an established brand. New businesses often rely on high-risk merchant accounts to help expand their agency easily and start making sales immediately upon opening shop.
Unfortunately, banks tend to not be too keen on accepting CBD companies as clients because of the legal status of CBD products across many countries around the world. This means that opening a bank account can be challenging for new CBD companies or require them to partner with other service providers who can help them get a high-risk merchant account. CBD companies must seek alternative payment systems in order to open a high-risk merchant account or find alternative high-risk networks that will work with CBD clients.
Payment Gateways
In the same way that banks don’t want to deal directly with CBD agencies, many online gateways also proactively try to avoid these businesses because of their legal status and the risk of fraudulent activity that exists within this industry. Online payment gateways are accepted by most customers as low-risk options for making purchases, thanks to established trust between customers and the gateway providers.
If you’re trying to make sales via credit card payments but can’t use an online gateway, you’ll severely limit the number of potential customers you can serve. CBD companies seeking to make sales online should look for proven credit card payment gateways that specifically work with high-risk businesses so they can accept payment without having to go through additional measures.
Accepting Cryptocurrencies
Blockchain technology has the potential to revolutionise the financial industry completely, particularly how CBD agencies do business. Cryptocurrencies provide instant transactions between two parties while also providing a high level of security.
Many CBD agencies are now accepting cryptocurrencies as an alternative payment method because it allows them to transact globally while making sales instantly in a low-risk manner. The only drawback at this time is that many merchants must pay steep transaction fees when using cryptocurrency, but this may soon change if more mainstream adoption occurs.
Cannabis Regulation
The cannabis market is the driving force behind the CBD industry in many respects, but this can be a double-edged sword when it comes to payment. Many countries have made CBD completely legal while also banning all other types of cannabis at the same time, creating confusion among consumers about what’s allowed to be purchased where.
This leads to CBD agencies having difficulty promoting their products because of uncertainty around legality between country jurisdictions, which makes it difficult for them to invest heavily in advertising or marketing materials. It also means that healthcare professionals are hesitant to recommend CBD products due to concerns about efficacy because there’s no way for them to know if the CBD has been sourced from hemp or cannabis crops. It’s important for CBD agencies to consider these problems when deciding on how they accept payments.
What to Look for in a CBD Payment Processing Gateway
CBD industry owners need to choose a platform that helps them manage their businesses more efficiently, provides the customisation needed for their loyalty programs, and has integration capabilities. The right CBD payment gateway can offer POS (point-of-sale) integrations, allowing CBD companies to set product discounts, send email receipts, and even provide convenient order tracking.
The best high-risk merchant account provider for CBD businesses ensures they are compliant with all regulations, which means offering your customers 3D Secure credit card processing or Verified by Visa services, among other features. Your high-risk online merchant account service should offer 24/7 support as well as SSL encryption security protocols that will protect both you and your customers from fraudsters.
We’ve shared our top tips for choosing the best banking provider for high-risk merchants.
Final Thoughts
Achieving growth in highly regulated markets is possible with the right CBD payment gateway. CBD industry owners need to look at their business needs and choose a platform that can produce results.
At Capitalixe, we provide CBD companies with high-risk merchant account services allowing you to accept transactions whether your business is online or offline.
Our experts can guide you through the entire CBD payment gateway setup process and help you find the most suitable solution for your needs. It’s never been this easy!
Get in touch to set up a free and non-obligatory consultation and learn more about how we can help resolve your payment and banking challenges today.
