Drug Paraphernalia Merchant Account

Over the last few years, there have been many changes in the legal landscape surrounding the medical marijuana industry in the USA. As some states have taken it upon themselves to allow medical marijuana and even decriminalize recreational marijuana, the changes have spurred a whole industry to support the needs of patients and customers. One of the fastest growing segments has been in the hardware industry, and while medical or recreational marijuana might be legal, it has remained a challenge for businesses to get an online drug paraphernalia merchant account, even in businesses that do not sell tobacco or other regulated substances.

Businesses that have sprung up in response to the many legal changes with marijuana have faced even tougher scrutiny from financial institutions and payment processors than ever before and as the legal system tries to tighten their reins on an industry with so many legal loopholes, bank and other financial institutions have restricted many of these businesses. While this is a growing industry, it is still a very small segment of the e-commerce industry and the potential liabilities and risk to many banks and other financial institutions outweigh any potential lost revenue that might be generated from opening up this industry.

Some of the most common drug paraphernalia businesses to face increased difficulties obtaining merchants services include, but are not limited to:

  • Bongs
  • Hookahs
  • Glass Pipes
  • Water Pipes
  • Rolling Papers

Working with a payment processor familiar in the tobacco and paraphernalia industry will help steer drug paraphernalia merchants and businesses in the correction direction, ensuring that they utilizing the proper services and abiding by all the regulations and guidelines set forth by the card association. Merchants operating online need to ask the payment providers about their experience in the industry as many merchant services organizations lack the ability to set up an online drug paraphernalia business, even if the business does not sell any controlled products, this will require a merchant services provider with the understanding and experience to successfully set up a drug paraphernalia merchant account for online sales.

After finding a payment processor that can accept a paraphernalia business, its important to integrate with a payment gateway that will accept this higher risk business industry, an essential key for merchants looking to build a long-term relationship with a team of service providers. Similar to the concerns of the financial institutions, having a payment gateway provider that will ensure selling hookahs, bongs and other devices is acceptable from the beginning will prevent any unforeseen stoppages in service, an event that can be costly and easily avoidable by inquiring about their acceptable merchant types from the initial conversation.

While the marijuana industry has the potential to become a large industry in of itself, the questions still exist about how it’s going to be handled from a legal point of view. As this gray area continues to surround the industry, the difficulty for merchants and businesses to obtain financial services will remain and prove to be a difficult hurdle to jump. Working with a payment processor that has experience and financial relationships to solve these problems can save merchants time and many headaches. Contact one of our payment processing professionals at Tobacco Merchant Services with any questions or concerns related to obtaining a drug paraphernalia merchant account or with an existing merchant account, we are happy to help.

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