Business Banking for CBD companies

In recent times, the global CBD industry has witnessed remarkable growth, especially in the UK, where the reported health benefits have propelled CBD products into mainstream retail outlets. This surge has created opportunities for entrepreneurs venturing into both retail and wholesale CBD businesses nationwide.

CBD companies are often considered high-risk by business bank account providers due to the unique legal and regulatory landscape surrounding CBD products. While CBD itself is not psychoactive, its association with cannabis and the lack of clear regulations in many jurisdictions contribute to the perceived risk. The industry’s rapid growth has outpaced regulatory frameworks, leaving financial institutions cautious about potential legal implications. Additionally, the relative novelty of CBD products and the limited long-term research on their effects raise concerns about product consistency and safety. These uncertainties make mainstream and high street banks hesitant to engage with CBD businesses, as they navigate the evolving legal and regulatory environment to mitigate potential risks associated with the industry.

Rejections from Mainstream Banks:

When establishing a company, the initial instinct is often to approach an existing bank for business services. However, mainstream and high street banks frequently decline account applications from businesses dealing with CBD, considering the products ‘high-risk’ due to their relatively recent emergence and limited long-term research.

Strategies for Setting Up Business Banking for CBD

Explore Alternative Options:

While some banks may reject CBD business account applications, smaller banks or online business banking providers may be more receptive. Exploring alternative options can enhance the chances of a successful application and prompt account activation.

Understand Application Requirements:

Before applying, familiarise yourself with the necessary business requirements and documentation, such as ensuring products contain no more than 0.2% THC, providing documented proof of wholesale product sources, and having the business registered before applying.

Properly Package Your Application:

The way you present your application matters. Ensuring all required documents are correctly organised can expedite the approval process and prevent unnecessary delays.

Merchant Advice Service specialises in assisting businesses, including CBD ventures, in navigating the complexities of business banking. Our banking partners offer tailored solutions, ensuring long-term success. Discover how we can support your CBD business.

Securing business banking for CBD ventures in the UK remains a complex affair due to the industry’s association with cannabis and evolving regulations. While traditional banks may be reticent, alternative financial institutions and online banking providers offer viable solutions. Strategies for successful banking include thorough preparation of applications, understanding specific banking requirements, and considering the costs involved. 

Merchant Advice Service emerges as a pivotal resource, providing expert guidance and access to banking partners familiar with the CBD sector’s unique needs. It’s crucial for CBD businesses to navigate these challenges with diligence and to stay informed through credible sources such as the Financial Conduct Authority’s service quality information and the requirements for medical cannabis products.