Poor Terpenes are grossly misunderstood…

Well, by the banking and payments industry anyway!

Legal cannabis coupled with a burgeoning “legal” CBD market has brought with it an increased awareness surrounding terpenes, or maybe it’s really more of a new recognition of the word terpene since terpenes are by no means new. There has just been more attention drawn to them due to the market but, unfortunately, there is also a gross misconception. And it’s affecting business owners who have nothing to do with the cannabis industry.

Don’t judge a terpene by its cover.

Terpenes are organic molecules found in all living plants which give them their aromatic scent. They are essentially the main component of the essential oils and resins that plants produce and are responsible for giving each plant its own unique smell and taste. Humans have been exposed to terpenes in nature our whole lives. They are what give you that pine smell when you walk through a forest, the calming scent that puts you to sleep when you lay on that lavender pillow, and what kicks you into gear when you get a whiff of bright peppermint.

These terpenes occur naturally in plants for a purpose. Sometimes it is to ward off foes, much in the way the thorns on the stem of rose deter predators, terpenes in plants try to discourage prey such as insects or deter fungi and bacteria from growing. Sometimes the purpose of a plant’s terpenes is to serve as the hydrogen/carbon atom base for other more complex molecules.

So what is the problem? Why won’t banks process terpene payments?

Well, in short, there has been a gross lack of education on the part of the financial institutions that would provide services to the industry. Recently there have been many merchants who are having their merchant account shut down for selling terpenes, or being denied a new merchant account because of the terpenes in their products.

Since terpenes, and talk of the effects of different terpenes has become more prevalent as the legal marijuana industry grows acquiring banks, payment processors, and the underwriters working within them have chosen to view terpenes as a high-risk commodity that they are not willing to be associated with. They are not bothering to make a differentiation between terpenes derived from the cannabis plant and terpenes derived from all of the other plants occurring in nature. 

For instance, Myrcene, which is one of the most prevalent terpenes found in Cannabis, also occurs in thyme, a spice so common we use it every day, as well as in lemongrass and mangoes, it is even found in the hops brewers use to give beer that wonderful “hoppy” aroma and bitterness.

Pinene is an example of another terpene occurring naturally and in plants that we come in contact with on a regular basis such as rosemary, basil, and parsley.

Linalool is abundant in lavender and the main reason why we commonly associate lavender with relaxation due to it’s calming and sedative effects. Interestingly, Linalool is also the aromatic compound that contributes to the floral and citrus notes found in many popular white grape cultivars used to make wine. Ever had a Pisco Sour at your favorite watering hole? Yep, Linalool, serving to distinguish Pisco from other young distillates.

Get a merchant account to accept credit card payments for terpene containing products.

So you can see why the bank’s closed-minded view of terpenes is particularly concerning considering the fact that the FDA, on the other hand, has given naturally derived plant terpenes a GRAS rating (generally recognized as safe). 

While non-cannabis derived terpenes are legal in all 50 states, terpenes, in general, are getting a bad rap in the payment card industry because of their assumed association with cannabis. But this is where the lack of education comes in to play. Due to this “guilty by association” attitude many businesses who have been operating for years, who carry products containing terpenes derived from plants and flowers deemed common to the public (and not associated in the slightest with the cannabis plant) who sell products that were already FDA approved are finding themselves between a rock and a hard spot when it comes to being approved for a merchant account.

Banks have taken a stance that terpenes are high risk and have chosen to lump all terpene merchants together. They treat a merchant account application that deals in terpenes as too risky without diving into whether they are sourced from legal sources, or are FDA approved products. They see the word terpene and quickly decline the application. 

There really is no excuse for this. A terpene’s legality is truly based on its source. If a merchant is selling a furniture polish containing limonene derived from a citrus rind it is legal and there is no reason an acquiring bank should deny the business a merchant account. 

At Bankcard Brokers, we are dedicated to staying on the pulse of the industry and bringing the best and most affordable solutions to our merchant partners. We think outside the box to find the right solutions to allow our merchants to continue to accept payments and service their customers, regardless of the difficulties involved in the type of businesses they run. If you have had a difficult time finding a merchant account for your terpene related business, or you just want to work with a company that works for you, give us a call today and experience the “Bankcard Brokers Difference!” 


2 thoughts on “Terpenes Are Not A Crime

  1. Paul says:

    Great article – there are a lot of misunderstandings and misconceptions in the legal CBD/cannabis industry. Thanks for helping to set some of these straight.

    • admin says:

      Hi Paul, Thank you for the comment and compliment! Absolutely, as proponents of fair access to banking and ethical merchant services to the entire industry we strive to provide valuable information that helps the industry achieve sustainable growth and work towards empowering it with legitimate financial services.

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