LEXINGTON, Ky. (LEX 18) — When the clock strikes midnight, a major credit card processor will officially bow out of the CBD industry, no longer offering payment services to them.
Elavon’s decision to sever ties has left CBD companies scrambling to find a new partner to keep their online services afloat.
When Elavon burst onto the CBD scene last fall, Bluegrass Hemp Oil owner Adriane Polynak was overjoyed. She said there were few U.S.-based merchant options at the time, and the company’s fees were business friendly, but the honeymoon was short-lived.
“We had a really healthy relationship with them, so to see that our services were going to be cut, were really quite surprising,” she said.
Elavon sent a letter last month to CBD companies across the country, informing them they would be closing their processing accounts. They cited uncertainty about regulations in the industry and Elavon executives decided that after May 15, they’d no longer process CBD and hemp related transactions.
Officials with Elavon decline to comment on this story.
Polynak found the move confounding, given that the 2018 Farm Bill have the hemp industry a boost.
“It was legal in 2014, it was reiterated in 2018, they went a step further to remove it off the controlled substances list, so to say there were some regulatory issues, we find quite troubling,” said Polynak.
Customers in Polynak’s stores will have to pay by cash, check, or money order starting Thursday, May 16. At least half of the business’ sales are made online, and for now, those services are shut down.
“When you cut down a significant part of our income, that could be very detrimental to our employees and to our jobs,” she said.
Polynak said they’ve been fighting for hemp since 2014, and they’ll continue to do so.
“As a result of the 2018 Farm Bill, hemp is a legal agricultural product. What we are seeing now are the growing pains of working through this process. Our office is gathering more information on the specific issue that businesses in our district are facing. We want to know if this is a decision based on pressure from regulators or if this is a business decision based on reputational risk concerns. I will continue to work with Leader McConnell and Kentucky Agriculture Commissioner Ryan Quarles to push regulators to provide the banks with the clarity they need to continue to offer their services to the legal hemp businesses in Kentucky,” said a statement from Congressman Andy Barr.