Will Marijuana Still Be a High-Risk Business If It’s Legalized in 2021?
Marijuana Legalization Might Mean CBD Businesses No Longer High Risk
Despite the controversy surrounding it, CBD has skyrocketed to fame over the last few years. CBD products have gone mainstream and they’re not only available as oils and tinctures, but they’re now also used in cosmetics, self-care and home care products, and even dog treats.But it’s also no secret that the legalization of marijuana is still up for debate in a lot of states across the country. Currently, medical marijuana is legal in 36 states while 14 states have passed laws regarding the use of CBD extract with minimal or no THC content.These states also only allow the use of CBD products to treat epilepsy or seizures in children. But like years past, a lot of consumers are hoping that 2021 is the year that marijuana gets legalized. Now the question for business owners is: will CBD businesses still be considered high-risk merchant accounts if that happens?In addition, FileTrail already moved to Austin, 8VC is moving its headquarters from Silicon Valley to Austin, and DZS, Inc. has announced its plans to move from Oakland, California to Plano, Texas as well.
Scientific Evidence Behind Marijuana Liberalization Is Still Inconclusive
It’s been more than five decades since calls for the medical use of marijuana have been pushed by those who believe in its benefits. But until now, marijuana liberalization policies have merely been a matter of experimentation with whatever scientific studies are available for lawmakers to study.It also doesn’t help that different states have overlapping policies. Some states have implemented strict limitations in the use of medical marijuana while others have combined policies for both recreational and medical marijuana use. This level of uncertainty could still lead to CBD being a high-risk business.
Risks of Fraud and Chargebacks Are Still High
Even if marijuana is legalized, it doesn’t take away from the fact that this substance is still prohibited in other parts of the world. This means that the risk of fraud is still very high, especially since marijuana sales are going strong in the black market. The lack of definitive studies also make marijuana prone to chargebacks because consumers might not get the exact effect that they’re hoping for in a product, which might have more to do with their level of tolerance and not a problem with the efficiency of the product.
Proper Regulation Is Necessary If Marijuana Is Legalized
There is a thin line between medicinal use and abuse of marijuana, and this is one of the biggest concerns for lawmakers and medical experts. Although there have been studies proving the health benefits of medical marijuana, the lack of proper regulation of CBD products on the market makes the business very risky in the eyes of a credit card processor.
The Future of the High-Risk Business of Marijuana
Many people hope that medical marijuana will finally be legalized this year, but with the pandemic still taking priority over other issues in the country, we might need to wait a little longer before that finally happens.Meanwhile, experts continue to study the benefits of CBD products and prove that it can be utilized for its positive effects without the risks of abuse and addiction.
Joyce Hope is a writer who specializes in merchant accounts. She has worked for First Card Payments since 2017.