Last week, Elavon, an end-to-end payment processing company that provides services to over 1.3 million merchants worldwide announced it would no longer be able to work with businesses that make and distribute products that include CBD or THC despite it’s current legal status in several states. This latest attack on the cannabis industry is due, in part, to pressures from the Federal government towards larger credit companies like Mastercard. The announcement, which stands to leave thousands of legal companies without a solution on how to maintain their day to day operations, is another hurdle in the ever changing world of legal cannabis.
Orleatha Smith, Co-founder of InclusivePay, believes that the problem is cyclical and until it’s fully addressed at a Federal level businesses will be forced to scramble everytime our lawmakers make yet another ill informed decision. “In order for businesses to continue running after having the backbone of their operation taken away they must find a solution fast,” Smith stated. “Most payment companies take at least two weeks to begin processing payments during which sales are at a stand still. You can do everything legal and be above board about all your operations and still be left with nothing after your e-commerce store is shut down.”
Even if you’re one of the lucky few that finds a merchant willing to work with your company there are still risks. Orleatha points out that many companies are forced to change their entire online store due to certain processors refusal to work with online retailers like Paypal. “Some companies will turn to a service like Paypal for a quick fix but the risk is far greater than the reward,” she says. “When Paypal shuts down your business account you’re likely to never see that money again.”
“What the government is doing at a Federal level is wrong and companies like Paypal know that they can make a quick dollar off the hard work of smaller operations,” Orleatha explains. When issuing their latest cease and desist to Elavon, Mastercard states that they aren’t interested in “high risk” e-commerce and announced that any company selling cannabis products will have 45 days to solve their processing problems. Meanwhile PotPlus and the rest of the cannabis community will just have to wait and see if the cycle continues but the fact still stands, until the Federal Government ends it’s war on drugs we will never fully see an end to this “reefer madness”.