Hemp and CBD Payments in California After AB 45

California CBD payment processing after AB 45 is easier than it was in 2020, but not as easy as most founders expect. AB 45, signed in 2021, allowed hemp-derived cannabinoids in food, beverages, dietary supplements and cosmetics sold in the state, put labeling and testing rules around them, and moved oversight to the Department of Public Health. What it did not do is change the rulebook at Visa, Mastercard, or the acquiring banks that sponsor merchant accounts. From a card-network perspective, CBD is still a restricted, high-risk category, and a Los Angeles tincture brand and a Humboldt topicals maker are underwritten the same way as a Colorado one.

What AB 45 actually did

Three things matter for payments. First, the law confirmed that hemp products (0.3% delta-9 THC or less by dry weight, under the federal definition) can be sold in ordinary California retail and online channels, which removed the "is this even legal here" question that used to sink applications. Second, it required testing, a certificate of analysis, and specific label content, which gives you documentation an underwriter will actually ask for. Third, it prohibited marketing hemp products with medical claims or to minors. Since then, California has moved to restrict intoxicating hemp products (high-THC or synthetic cannabinoid items sold outside the licensed cannabis system). Check the current regulation before launching any product line, because a product that falls on the wrong side of that line is not just unbankable, it is unlawful.

Why banks still say no

Sponsor banks weigh federal exposure, reputational risk, and chargeback history. CBD has all three. FDA has not settled the status of CBD in ingestibles, which is why some banks decline all ingestible CBD and accept only topicals. Chargebacks in the category run high, largely because of subscription "free trial" schemes from a few bad actors that poisoned the well. And the products are frequently sold with health claims that create regulatory noise. The result is that most mainstream processors prohibit CBD outright, and the ones that accept it want a full file. If you have been declined by a household-name payment app, that is not a reflection on your business. It is their policy.

The file that gets a California CBD brand approved

• Current COAs from an ISO-accredited lab for every SKU, showing THC under the legal limit.
• Product labels that match AB 45 requirements and contain no disease or treatment claims.
• A website with visible terms, refund policy, shipping policy, and a clear statement of what you sell.
• Formation documents, bank statements, and any prior processing history with chargeback counts.
• For subscriptions: screenshots of the consent step, the confirmation email, and the cancellation path.

Our walkthrough of how underwriting works for a high-risk merchant account explains how those items get scored. Expect a rolling reserve in the early months and a chargeback threshold written into your agreement.

Subscriptions and the Automatic Renewal Law

Monthly CBD subscriptions are common and profitable, and they are the reason the category has a bad chargeback reputation. California's Automatic Renewal Law requires clear disclosure of the renewal terms before purchase, affirmative consent, a confirmation with the terms, and an easy cancellation method, including online cancellation for online sign-ups. Beyond the law, network rules for negative-option billing require reminder notices and a plain descriptor. Read free-trial offers: how to bill without getting shut down before you launch a "just pay shipping" offer, because that structure is the single fastest route to an account termination and a MATCH listing.

Checkout mechanics that reduce risk

Keep card data off your site with hosted fields, which lets you keep your design while the processor handles the sensitive inputs. Use a fraud screen tuned for the category, since CBD attracts card testing on low-dollar items. Make the descriptor your brand name, and put your customer service phone number in it if your processor supports that. For wholesale orders to dispensary-adjacent retailers and smoke shops in the Bay Area and Sacramento, ACH invoicing is cheaper and carries no chargeback exposure.

Stablecoins as a second rail

Some California hemp brands add stablecoin payments settled on Solana and the XRP Ledger as an alternative for customers who prefer it and as a hedge against card-account disruption. Stablecoin settlement lands in the merchant wallet instantly and does not carry a chargeback mechanism, but it is a complement to cards, not a replacement, and it does not change your obligations under AB 45 or the Digital Financial Assets Law if you start holding customer digital assets. Talk to counsel before you do anything beyond accepting payment.

The short version: AB 45 made your product legal to sell in California. Getting paid for it still depends on showing a bank you sell it carefully.