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2026, according to research firm Reports and Data. But ac- with other consumer goods, so they turn a “blind eye,"
quirers have been reluctant to underwrite merchants they he said. "If you're a large merchant selling CBD, there are
know to be selling CBD products. "Know" is the operative banks that will support you." In a comment letter, the Na-
word here. "Most vape shops sell CBD products. Acquirers tional Cannabis Industry Association urged the FDA to
don't seem to have any problems with that," Miller said. come up with "an interim fix" that provides clarity on the
"But if the business name includes the term CBD they're production and sale of hemp-derived CBD. "If we do not
getting turned down," succeed in working together to reassure the card brands
that they can safely support our industry, then we predict
The problem stems from a mismatch of state and federal a significant decrease in CBD sales," the NCIA warned.
laws. As many as three dozen states authorize the produc-
tion and sale of CBD products. Under federal law, only Miller isn't convinced FDA action, alone, will suffice. The
CBD derived from a particular type of cannabis (the hemp underwriting guidelines for merchant acquiring accounts
plant) is legal. Hemp, which has long been grown for in- predate the emergence of verticals like CBD, he noted.
dustrial purposes, contains very small amounts of THC "Underwriting guidelines need to be created for this prod-
(0.3 percent or less of dried leaf), the psychoactive com- uct," he said.
pound commonly associated with cannabis.
Cashless ATM workaround
The 2018 Farm Act, which exempted hemp from the fed- Some ISOs are finding ways around acquirer reluctance to
eral Controlled Substances Act, didn't fling the door wide support card acceptance by CBD merchants. A handful of
open to legal cultivation and sale of hemp products, in- ISOs offer cashless ATMs, also known as point of banking
stead tasking the Food and Drug Administration with solutions, which route transactions through regional ATM
regulating cannabis and CBD. And the FDA doesn't seem networks rather than the credit card networks.
in a rush to issue regulations.
Cashless ATMs function similarly to traditional ATMs.
"There are lots of questions we will need to answer to en- Customers initiate transactions using PIN-authorized
sure the FDA is taking an appropriate, well-informed and credit and debit cards. Transactions are authorized in $1
science-based approach to the regulation of cannabis and increments, and carry surcharges, which typically cover
cannabis derivatives, including CBD," Acting FDA Direc- merchant processing costs. A $98.32 total ticket, for exam-
tor Norman E "Ned" Sharpless, MD, said during a May 31 ple, gets rung up as a $99 transaction, and the customer
public hearing on the issue. receives 68 cents in change. The transaction posts to the

Bigger is better? customer's account as a cash withdrawal from a bank ac-
count or as a cash advance against a credit card balance.
The lack of federal regulatory structure is being felt in "This allows CBD merchants to accept cards at the counter
the acquiring space. Elavon made headlines in early 2019 the same as any other retailer," Miller said.
when it began boarding merchants selling hemp-derived Patti Murphy is senior editor at The Green Sheet and president of
CBD products, only to reverse course a few months later.
ProScribes Inc. Follow her on Twitter @GS_PayMaven.
In June, Thrive Market, an online
retailer of natural and organic
food products, temporarily halt-
ed sales of hemp-derived CBD
products after its acquirer (which
the firm declined to name)
threatened to terminate the busi-
ness amid uncertainty over the
legal status of CBD.

"We've hit the pause button on
boarding pure CBD ecommerce
merchants," Miller said. But not
all merchants selling CBD prod-
ucts are getting the boot from
acquirers. Walgreens and CVS
publicly disclosed they are stock-
ing shelves with hemp-derived
CBD-infused products at stores
in dozens of U.S. markets. "Size
matters," Miller said. No acquirer
wants to lose a large retail client
that's selling CBD products along
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