Square Inc. announced Thursday that it was officially opening up payment-processing capabilities to sellers of CBD products, after initially offering the service as part of a beta program.
Speaking at an event in Manhattan, Square’s SQ, +0.97% General Counsel Sivan Whiteley highlighted an opportunity to offer modern processing capabilities to CBD merchants, which have been seen as a thorny commercial area for business partners due to the evolving regulatory landscape in the industry. CBD sellers at the event pointed to challenges around obtaining transparent payment services, mentioning high fees from other processors and a prior reliance on check payments.
CBD is the non-psychoactive ingredient in the cannabis plant that is widely held to have wellness properties. Merchants were hoping that the substance would be approved as part of last year’s Farm Bill, which legalized hemp. But CBD was not legalized because it is the main ingredient in the only cannabis-based drug to win approval from the U.S. Food and Drug Administration, GW Pharmaceuticals PLC’s GWPH, +5.22% Epidiolex, a treatment for severe forms of childhood epilepsy.
The FDA is working on a set of regulations for CBD but until they are ready, companies are not allowed to add it to food or drink and cannot make medical claims for topicals and other products. Massachusetts-based Curaleaf Holdings was sent an FDA warning letter in July for claiming CBD-based products would treat a range of serious diseases, including Alzheimer’s disease. Unlike THC, the psychoactive ingredient in the cannabis plant, CBD has not been widely researched.
Published: October 06, 2019
Founder & Interim Editor of L.A. Cannabis News