The U.S. Hemp Authority, a trade group developing certification standards for the industry, has lost payment processing services after being dropped by its vendor, San Francisco-based Stripe.
Stripe told CNN Business it dropped Hemp Authority’s account because of liability concerns despite the fact that the non-profit organization is not a seller of any hemp products. Hemp Authority, essentially a self-regulatory body, qualifies hemp firms through a compliance regime that includes a third-party audit. The group’s “certified” seal is aimed at giving consumers confidence that products they purchase are safe and of the highest possible quality, and assuring products are legal.
“We’re being told we’re high risk. We’re actually trying to minimize human risk,” Hemp Authority President Marielle Weintraub told CNN.
Attaining financial services continues to be a problem for hemp firms in the USA, primarily due to ignorance among law enforcement authorities and others who confuse hemp with marijuana – which is nonetheless legal in many parts of the country.
Stripe has said some decisions regarding acceptability of clients depends on policies of credit card companies and banks.
Payment processors Square and PaymentCloud are inviting some hemp CBD firms as clients on a limited basis, but those arrangements can be complicated as those firms’ partner wholesale payment processors are involved.
Waiting on the FDA
Hemp stakeholders were counting on last year’s passage of the 2018 Farm Bill to resolve banking and credit card problems suffered by many cannabis firms. The measure, which legalized hemp growing and processing, pushed some American retailers to begin stocking up on CBD, for which marketplace rules still are being clarified by U.S. agencies, primarily the U.S. Food and Drug Administration (FDA).
The FDA also still has not set clear rules for hemp food and health & beauty products, which nonetheless are in broad distribution in the USA.
The Agency held a public hearing at the end of May to take recommendations for how CBD should be regulated, but to date has taken no action.