Step-by-Step Guide to Setting Up a High-Risk Merchant Account for Hemp Businesses

Step-by-Step Guide to Setting Up a High-Risk Merchant Account for Hemp Businesses

If you sell hemp or CBD products, you’ve likely faced the frustrating reality: most payment processors won’t work with you. Banks and traditional providers often classify hemp as “high-risk,” making it difficult to accept credit and debit card payments.

This guide will walk you through the simple, step-by-step process of securing a hemp merchant account—without getting rejected or overpaying on fees.

Why Hemp Businesses Need Special Payment Processing

Before diving into the setup process, it’s important to understand why hemp businesses struggle with payment processing:

✔ Legal Uncertainty – Even though hemp is legal under federal law (with <0.3% THC), many banks remain cautious.

✔ Higher Chargeback Risk – Some customers dispute charges, leading to fraud concerns.

✔ Industry Stigma – Many mainstream processors (like Stripe and PayPal) ban hemp and CBD sales entirely.

That’s why you need a specialized hemp payment processor—one that understands the industry and won’t freeze your funds.

Step 1: Find a Reliable High-Risk Merchant Account Provider

Not all payment processors work with hemp businesses. When searching for a high-risk merchant account provider, look for:

Explicit approval for hemp CBD (check their terms—don’t assume!)
Competitive processing rates (avoid hidden fees)
Experience with hemp payment processing
Flexible underwriting (some providers work with startups)

Questions to Ask Before Applying:

• “Do you work with hemp/CBD businesses?”
• “What are your processing fees and contract terms?”
• “Do you require a rolling reserve?”

Pro Tip: Avoid providers that give vague answers—only work with those who clearly support hemp payment processing.

Step 2: Prepare Your Business Documents

Since hemp is considered high-risk, underwriters will ask for extra documentation. Gather these in advance to speed up approval:

Business License Registration (Proves legitimacy)

Bank Statements (3-6 months) (Shows financial stability)

Processing History (if applicable) (Helps negotiate better rates)

Product Lab Reports (Confirms THC compliance)

Website Compliance Screenshots (No unapproved health claims)

The more organized you are, the faster you’ll get approved for a hemp merchant account.

Step 3: Submit Your Application Negotiate Fees

Once you’ve chosen a CBD payment processor, complete their application form. Expect questions like:

• “What’s your average monthly sales volume?”
• “Do you sell online, in-store, or both?”
• “Have you had previous merchant accounts closed?”

Common Fees for Hemp Payment Processing:

• Setup Fee: $100–$500 (one-time)
• Transaction Fee: 3.5%–6% + $0.30 per sale
• Monthly Fee: $20–$100
• Chargeback Fee: $15–$50 per dispute

Watch Out For:

• Long-term contracts (some lock you in for years)
• Rolling reserves (where 5–10% of your revenue is held)

Negotiate before signing! Some providers offer better rates if you have strong sales history.

Step 4: Get Approved Start Accepting Payments

Once approved, your high-risk merchant account provider will:

• Activate your merchant account
• Set up payment gateways (for online sales)
• Provide a virtual terminal (for phone/retail orders)

Now, you can securely process credit and debit card payments without fear of sudden shutdowns.

Step 5: Maintain Compliance Avoid Account Freezes

To keep your hemp payment processing account in good standing:

Monitor chargebacks (keep them under 1%)

Update lab reports regularly (stay compliant with THC laws)

Avoid misleading product claims (no “cures” or “treats” statements)

Use fraud detection tools (reduce scams disputes)

Getting a hemp merchant account is challenging but 100% possible with the right approach. By following these steps, you’ll avoid rejections, high fees, and payment processing headaches.

Ready to start? Research high-risk merchant account providers today and take the first step toward smoother transactions!

FAQ

Can I use regular payment processors like PayPal for hemp?

→No, most mainstream processors ban hemp and CBD. You need a specialized CBD payment processor.

How long does approval take?

→Typically 3–7 days if you submit all documents upfront.

What if my application gets rejected?

→Review the reason (e.g., missing documents, high chargebacks) and apply with another hemp payment processor.