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As cannabis becomes legalized in the U.S. for medicine and recreation, the possibilities for its use are being explored. Pills, liquids, edibles, and beauty products are already being made, but the CBD beverage industry is now trying their hand. Infused drinks seem to be the logical next step, and securing the ability for CBD merchant processing can make or break the new businesses. Take advantage of the trend while it’s new and cash in as the industry grows.
Terminology: Cannabis vs. Marijuana vs. Hemp
To better understand these products, we first need to know what the differences are between them. Often times, people use the terms cannabis, marijuana, and hemp interchangeably, but they are actually very different.
Cannabis is a genus of plants in the cannabaceae family comprised of numerous species. Marijuana and hemp are two of the subspecies within the cannabis family and are comprised of different levels of the compounds THC (Tetrahydrocannabinol) and CBD (cannabidiol). THC is the psychoactive compound that creates the “high” typically associated with cannabis use. Non-psychoactive pain relief, inflammation, and anxiety are the therapeutic benefits attributed to CBD.
Marijuana has high levels of THC, usually around 10% or more. The THC compound is commonly stigmatized for its psychoactive effects on the brain of the consumer.
Hemp is known for its low amount of THC (less than 0.3%), and high quantity of CBD. The CBD compound incidentally interferes with the binding of THC to the brain’s receptors. This process dampens the already low possibility for a psychoactive response when consumed.
Legality of CBD Beverages
The constant change seen in this regulatory arena makes it difficult to keep up with that is legally acceptable. CBD extracted from marijuana is federally considered illegal to manufacture, sell, and consume. Alternatively, multiple state-level laws have been passed to allow adults to grow and use marijuana legally when found medically necessary while an even smaller sub-group have allowed recreational use.
On the other hand, CBD from hemp that is grown in accordance to the 2018 United States Agriculture Improvement Act (aka Farm Bill) is no longer included on the Controlled Substances List, and as a result is federally legal to buy.
This is a huge step for hemp-derived CBD. For those wanting to purchasing CBD products, make sure the hemp grower is producing within the parameters of the Farm Bill. For those wanting to sell CBD products, researching for secure merchant processing will allow you to keep a competitive edge in the growing industry.
The Cannabis-Beverage Induction
Soda, coffee, kombucha oh my! Everyone wants in on the CBD craze and products are popping up in an increasing frequency to fill the demand. Outlined below are the trends in each of the beverage types in both CBD and THC infusions.
With interest from names like Coca-Cola to produce their own infusions, this carbonated soft drink could hit the big time very soon. Discreetly delivering the medicinal properties with the convenience of America’s favorite drink could soon become the largest share of infused beverages. Coming in a range of flavors and potencies, any level of consumer can find what drink works best for their needs.
The less-bubbly sibling to one of our favorite drinks is nearly inseparable from memories of summer weather. But lemonade now has a new best friend, the hemp plant. It provides a refreshing and very quick-acting twist to how we consume CBD products.
Cannabis-infused teas have been found as an effective mode of delivery for managing pain. This method is slow-acting but long-lasting due to the speed of release. Tea is gaining in popularity for this reason and is easy to incorporate into any daily routine.
This routine morning drink now comes with a double kick. You can buy CBD coffee grounds online to brew at home, visit a legal area to purchase a cup, or just supplement your existing coffee with cannabis-infused sugar, milk/creamer, honey, etc. (P.S. for you, Keurig owners, there are even cannabis coffee pods)
Bringing together the probiotic benefits of kombucha with the therapeutic benefits of cannabis delivers a boost to your internal health. Riding on the coat-tails of the kombucha trend, the CBD version will definitely become a popular mode of consumption.
Up to this point, alcoholic drinks with CBD are just starting to emerge in this market. At this point, only a few dispensaries have non-alcoholic options to purchase. There are beverages in the making that contain both alcohol and CBD, but it may be some time before they are available due to legality issues.
Projections for CBD Growth
According to a report conducted by the Brightfield Group, the CBD and hemp industry will account for over $1 billion in sales by 2020. Cannabidiol drinks alone are projected to achieve a value of $260 million, a small portion of the $600 million that marijuana-infused drinks are expected to grow to by 2022. That is revenue that entrepreneurs can take advantage of by finding secure CBD merchant processing for their business.
Starting your CBD-Infused Beverage Business
The acceptance of CBD and hemp products in the marketplace have caused an influx in CBD business merchant accounts. These accounts are considered high risk by acquiring banks and are treated differently because of it. What to ask when securing a payment processor for your CBD oil merchant account:
- Are they adept at working with the high risk industry?
The processor must have the right framework in order to provide high risk credit card processing for CBD businesses. Things to look for are flexible underwriting, chargeback protection, and seamless integrations with multiple platforms and gateways.
- More specifically, do they have experience with CBD eCommerce merchants?
A processor with little to no expertise in CBD ecommerce will most likely not be able to handle your business type. Dealing with the evolving legislations, regulatory demands, and need for increased security is a big undertaking and requires flexibility. Make it easy on yourself and pick a payment processor that already has numerous CBD merchants and can handle the additional precautions.
- Do they offer supplementary services in addition to the essentials?
Essential services include chargeback protection, security, and fraud prevention, but the customizable options set apart the mediocre processors from the exceptional ones. Additional services to help your business scale and grow may include a tailored gateway, seamless platform integrations, and an open API.
- Are they well connected and invested in CBD merchant success?
The most important aspect of finding a great payment processor is if they are invested in your success. Be sure to select a processor that wants to work hard so that you and your business can thrive.