Help — labeled High Risk

Looking for advice on this situation. Shopify Payments Shut Down My CBD Store - Labeled High Risk Any guidance would be greatly appreciated 🤷.

Details: I'm in a situation where I need to understand my legal options. Has anyone dealt with something similar?

File a complaint with the CFPB immediately. Payment processors and banks respond much faster to regulatory complaints than to customer service tickets. Example: a $20K hold can be released within a week after a CFPB complaint.

This happened to me with a different processor. The demand letter approach works — cite their Terms of Service provisions about timely disbursement and threaten arbitration. Most processors settle to avoid the cost.

Keep in mind that payment processor disputes are governed by the contract you signed or whatever, not consumer protection law (since you're a merchant). Read your merchant agreement carefully for the dispute resolution process honestly.

CBD businesses face this constantly due to the gap between federal legality (Farm Bill) and payment processor risk policies. Processors base their policies on their acquiring banks' risk appetites, not just the law.

The 4.5% rate from a high-risk processor is actually competitive for CBD. Some pay 6%+. Ways to reduce costs:

• Negotiate: After 3-6 months of clean processing with low chargebacks, ask for a rate review. High-risk processors expect to negotiate.
• Multiple processors: Split volume between 2-3 processors for redundancy and leverage.
• Direct banking relationships: Credit unions and community banks in cannabis-friendly states sometimes offer merchant services for compliant CBD businesses at lower rates.

For the Shopify situation: you can't force them to process your payments. Their TOS gives them discretion on risk. But you CAN continue using Shopify as your storefront and integrate a third-party payment gateway. This is actually the standard setup for most CBD e-commerce.