Since industrial hemp is excluded by the DEA from the definition of marijuana in the CSA (Controlled Substances Act), any product derived from industrial hemp would be considered legal (including cannabinoid products such CBD) as long as it is compliant with the Federal Agriculture Act of 2014(Farm Bill). This bill authorizes research and cultivation but not retail sales in states where hemp production is legal.

CBD is legal and sold by both licensed and unlicensed enterprises in states where medical and/or recreational marijuana is legal. Outside of these, many states have legalized CBD often with restrictions.

Further since both the DEA and the FinCen division of the US Treasury Dept consider CBD produced and sold outside the guidelines of the ‘Farm Bill’ to be a CSA Schedule 1 substance and therefore Federally illegal, a financial institution providing a bank account to an unlicensed CBD producer, distributor or retailer is obliged to file a ‘Suspicious Activity Report’ (SAR) at regular intervals to alert law enforcement to the illegal activity.

However since CBD as a ‘nutraceutical’ would come under the category of ‘medical marijuana’, Federal enforcement is prohibited in states where MMJ is legal under the ‘Rohrbacher/Blumenauer’ budget amendment (but which expires December 8, 2017 unless renewed by the current Congress). As long as this amendment is in place, CBD merchants and producers in the 28 legal cannabis states + DC are reasonably protected from law enforcement action but for everyone else there is virtually no legal protection. Those CBD-related enterprises’ only comfort is derived from prevailing prosecutorial discretion and law enforcement forbearance.

With all this swirling legal ambiguity and confusion, banks which were already generally unwilling to welcome any kind of marijuana related businesses are even more unwilling to touch CBD enterprises of any kind.

Whereas there is some compliant merchant credit card processing now available in the US for licensees and ancillaries (when coupled to transparent, compliant checking account), currently compliant processing for CBD merchants is primarily via offshore banks with rates in the range of

5.9% - 8.4%, and rolling 3-6 month reserves of 5% - 10% (+ miscellaneous fees).

As a result, CBD operations whose apparent business or profession is not cannabis-related have often opted not to disclose the CBD part of their business and may be able to avoid detection by the bank or merchant processor for a while depending upon the extent of their public profile in the industry. However even in these instances, banks under pressure from regulators are taking advantage of ever more rigorous software and detection tools now available to more effectively detect and identify this unwanted activity.

Of course, those ancillary providers of goods and services who advertise or disclose their CBD related activities are at much greater risk, especially now, of having their accounts closed. Depending upon one’s public profile, it’s likely CBD operators masking the nature of their business risk the continuing harassment of having their accounts closed several times a year.

FINCANN can provide stable, transparent, compliant US banking for any CBD operator. It will cost a little more than a ‘covert’ account, but for most folks, it’s well worth the peace of mind. Generally, there is an initial application fee of around $500, a modest advisory fee and ongoing account maintenance fees of between 0.2% - 0.35%.

Once a compliant bank account is established, in addition to domestic or overseas merchant processing, we can also arrange US-based e-checks, ACH and electronic wallet payment systems that are very user-friendly and integrate with popular shopping carts, P.O.S. and compliance systems with typical rates of 2.9%.

CBD Retail & Online

​​​​​CONTACT:  (212) 724 7777