Maryland resident Barbara Tunstall relies on a cannabidiol (CBD) flower in a vape she said helps her chronic pain and a topical CBD cream she finds relieves spasms. Along with coconut oil-based pills she used to get from her prescribing doctor, Tunstall credits her quality of life to CBD products. However, among the hoops Tunstall had to jump through in Maryland to get a medical cannabis license is one unexpected hurdle — Tunstall’s only payment option is cash.

Like most medical cannabis dispensaries around Maryland, Tunstall’s go-to location Curio Wellness only won’t take credit cards for payment. According to a statement provided to The Mighty by a Curio Wellness representative, “we accept debit cards as well [as] cash. At this time we are unable to accept credit cards because credit card processors will not allow cannabis (THC) transactions.”

Tunstall expressed frustration at the additional obstacles and expense she must wade through to find relief for chronic conditions that a mixed but growing body of research suggests may benefit from cannabis products.

“Since the prices vary I’m never sure how much to withdraw in cash for what I need,” Tunstall told The Mighty. “I’m dealing with chronic pain, it’s another barrier placed on getting effective treatment. I could try something [over the counter]. Less effective and end up wasting more time and effort. Exhausting.”

You’ve likely seen cannabis and CBD products everywhere, from the internet to the shelves of popular retailers. What you probably didn’t know, however, is many cannabis companies are drowning in a sea of grey-area federal, state and local laws that mean many can’t easily accept your payment. It’s not just Tunstall or Maryland.

“I tried to buy CBD product just this week from a website and they wouldn’t take my Mastercard debit card so I had to use my husband’s visa instead,” Mighty community member Mindy said. “It was strange and frustrating!”

Mastercard, Visa, American Express, PayPal, Square, Stripe and Shopify all refuse to process payments for CBD companies, which means when you show up to a dispensary or try to place an order online, be prepared to need an alternate method of payment.

What’s the Deal With Paying for CBD?

Most of the major companies that accept payment, including credit cards Mastercard and Visa, and sites that cater to online sales like PayPal or Shopify, won’t directly accept payment for cannabis products. These companies are generally referred to as payment processors or merchant services. They act as a go-between for a company’s bank and your bank account during retail transactions.

Without a payment processor or service like PayPal to collect customers’ money, a business must try to find a high-risk merchant service account that charges the company extra fees to process payments, turn to cryptocurrency-backed options or simply accept cash and e-checks, which is inconvenient for customers and, in the case of cash, impractical for online-only CBD companies.

Mastercard and Visa all refuse to accept transactions for marijuana dispensaries, even where they are legal, and it may not be long before they also demand businesses stop selling hemp and CBD for fear of being held liable.

More at https://t.co/iiPJWJwBzP#cbd #hemp #hempinUS pic.twitter.com/PYefpVtWz2 — Salve Love (@Infuzzed) July 8, 2019

Steven Wood launched a hemp-based CBD product store, Assuage, in February for CBD products like tinctures, topicals, vapes, pet treats, raw oils and concentrates. When Wood launched, he was only able to accept e-checks, and it took months to get approval for that. Wood recently found a service to accept all credit card types. Struggling to find a payment processor made it difficult for Wood to get his company off the ground.

“If I can’t accept payment, there is no business!” Wood told The Mighty. “If [customers] can’t complete their purchase, they just leave.”

According to Olivia Alexander, the CEO of CBD company Kush Queen, which creates cannabinoid-infused wellness and beauty products, customers don’t usually realize there’s an issue — or all the restrictions that lead to cash-only CBD businesses.

“Most of the customers have no idea,” Alexander told The Mighty. “They cannot believe it because they see CBD everywhere. They see our products in Urban Outfitters and don’t understand how we can’t accept their cards. All they want is access to their products and most are completely in the dark about the CBD industries banking problems.”

Why Payment Services Won’t Accept Money From CBD

In 2018, CBD products raked in $2 billion and the market is estimated to grow to $16 billion in retail sales by 2025, according to a report by Cowen & Co. So why wouldn’t merchant service providers want to take a hit of such a growing and lucrative market? According to Hoban Law Group financial services group chair and senior attorney Steve Schain, the issue with payment processors and CBD really boils down to a complicated series of laws and guidelines.

Here’s how it works. CBD and THC are two of nearly 120 cannabinoids, active chemicals contained in cannabis plants that many have found to be helpful for a variety of health conditions and other uses. From a legal standpoint, hemp is derived from cannabis plants with less than 0.3% tetrahydrocannabinol (THC), the type of cannabinoid that gets you “high.” Anything made from cannabis plants with more than 0.3% THC is completely illegal at the federal level.

Thanks to the passage of the U.S. Farm Bill in 2018, hemp products are now legal in the U.S., but it’s not so straight forward because according to Schain, regulators have no idea what to do with CBD. What we refer to as “CBD products” can be completely hemp-based (and therefore legal) or a blend of CBD and THC that exceeds the THC percentage allowed and is therefore only legal medically or recreationally on a state-by-state basis.

Schain described what he called “a fantastically overburdened amount of regulation” that leads to CBD payment processing issues. In short, this includes the Controlled Substance Act, Bank Secrecy Act, an internal memorandum from the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) followed by a trio of memos called the Cole Memorandum. The U.S. Food and Drug Administration (FDA) also prohibits adding cannabis to food or making health and wellness claims.

At the state and local levels, there are additional regulations. For example, the dispensary Curio Wellness in Maryland said, per state law, it must register with the Maryland medical cannabis commission. Products must be tested through approved labs and the company can only sell products derived from the cannabis plant — but not hemp-based products. The resulting confusion and fear of liability mean banks and payment processors can’t figure out the risk of working with CBD companies. So in most cases, they just don’t.

“What happens is a terrible, terrible, terrible confusion between the different federal bodies that regulate both what we’ll call cannabis and industrial hemp and banking,” Schain told The Mighty. “Banks … care about two things. Number one, profits. Number two, risk they can manage. It’s not that they’re unwilling to take the risk, they don’t fucking understand it.”

Why This Matters if You Have an Illness or Disability

The impact on CBD companies is clear, but the inability to use credit cards is also a big deal for those purchasing products. Credit card companies and payment processors’ reluctance to provide solutions for their customers with health conditions and disabilities is a major health issue. There’s a human cost when payment processors won’t work with CBD companies.

Though more research is needed, many people with other issues say CBD helps their anxiety, insomnia, stress, seizures and epilepsy. Chronic illnesses and other conditions that lead to chronic pain, like fibromyalgia, Ehlers-Danlos syndrome (EDS) and cancer, are tricky to treat. You may not respond well to the traditional prescription drug options or you may face restrictions on opioids. At the end of this road, for many, is CBD.

CBD isn’t cheap. An extra-strength CBD tincture sold by Assuage costs $54.98 per bottle. Another full-spectrum CBD tincture from Kush Queen sells for $35.99. A CBD tincture from Curio Wellness, which includes a 10:1 ratio of CBD to THC is $80 per bottle. Depending on how much you need to feel better, the costs can quickly add up.

Mighty contributor Darcey Robinson, who lives with EDS, said she spends about $595 per month on CBD she said helps for pain relief. A patient trying to find relief and comfort from terminal cancer-related pain may need much higher doses of CBD, and the costs can easily increase to over $1,000 per month. CBD, even when it’s recommended or prescribed for medical purposes, is not covered by health insurance.

At the same time, if you live with a chronic illness or disability, you’re more likely to struggle financially. A 2016 report showed 20.9% of people with disabilities lived in poverty compared to 13.1% of those without disabilities. This may be due, in part, to the fact more than 68% percent of people with disabilities are unemployed, and employer-sponsored health insurance covers half of U.S. adults under age 65, In 2014, those with one or two chronic illnesses spent twice as much out-of-pocket on their health compared to the general population.

The burden of health management through an alternative like CBD — as it waits for research and regulation — is placed squarely on the shoulders of those with conditions. People with health conditions and disabilities are already more likely to earn less money and have sky-high medical bills. Paying for CBD upfront with cash may be really difficult — the ability to use a credit card can reduce some of this burden.

What Payment Processors Say About CBD

A growing number of big companies like Walgreens, CVS, Rite Aid, Urban Outfitters, DSW and Neiman Marcus can sell CBD products — and accept major payment methods. Schain said retailers with brick-and-mortar stores are more creditworthy, and therefore less risk to banks.

These larger stores are pushing smaller and online CBD companies out of the market, which also hurts people who find CBD has health benefits. If you have an illness or disability, heading to a store might not be accessible. If you want a larger variety of CBD products or a blend of CBD and THC for more pain relief, you likely won’t find that on the shelves of a big-box retailer.

Until the laws and guidelines governing CBD and cannabis-related industries are clarified, however, most payment processors don’t plan on budging. PayPal, Visa, American Express and Stripe did not respond to multiple requests for comment. A spokesperson for Mastercard told The Mighty in an emailed statement:

Our rules require our customers to conduct lawful activity where they are licensed to use our brands. States are currently developing a regulatory framework for the purchase of hemp-based and CBD products, incorporating input from both the USDA and the FDA. Given the complexity and lack of clarity at this time, we cannot support these transactions on our network. As this topic evolves, we will share any new developments regarding the use of our products.

Credit card company Discover had a different perspective. A spokesperson told The Mighty via email, “Our stance on CBD products is that if merchants offer products that are legal, then there is no issue with acceptance through the Discover Network.”

Of the 636 million open credit card accounts in the U.S., however, only 59 million were covered by Discover in 2014, according to WalletHub. More than 260 million customers had Visa cards and 174 million Mastercard.

What’s Next for CBD Payment?

It may not look great now for access to CBD products, but Schain believes change is coming. “Once the Food and Drug Administration, Department of Agriculture, and frankly, U.S. Customs, come up with a clear set of criteria, I think it’s going to provide guides to financial institutions that allow them to build programs,” Schain said.

Merchant services company Square, for example, is already testing the waters to onboard CBD clients. “Square is currently conducting an invite-only beta for some CBD products,” a Square spokesperson told The Mighty via email.

PayPal started lobbying for the passage of the Secure And Fair Enforcement (SAFE) Banking Act, which was introduced with bipartisan support in Congress earlier this year. The bill would help create a path forward for banks and merchant services to work with cannabis-related businesses. As of June, the bill was placed on the calendar for a full vote in the U.S. House of Representatives, but no date has been scheduled.

Additional options are needed to provide affordable access to CBD for those with chronic illnesses, mental health issues and disabilities. Otherwise, payment processors are adding to an already overburdened group of people who rely on CBD for a better quality of life, as outlined again and again in hundreds of comments in an FDA public forum on cannabis.

“I have suffered migraines from the age of 9 and started medications around about 6th grade. I’ve been prescribed almost every medication possible in an effort to ease the pain. In 2014, I was diagnosed with a brain tumor, meningioma,” reads an anonymous comment on the U.S. government’s regulations feedback page, adding: