Hempen Organic, a brand that specializes in hemp food, cosmetics, and CBD products, recently encountered obstacles when it came to fundraising due to regulatory uncertainty in the CBD industry. They were initially accepted on Crowdfunder but later rejected because the payment processor, Stripe, has terms and conditions that exclude CBD-related businesses. This issue is not unique to Crowdfunder, as many platforms face payment processing limitations that prohibit CBD businesses from featuring their projects.
The problem occurs because these platforms rely on payment processors like Stripe and PayPal, both of which have policies against servicing CBD companies. Hempen Organic was informed by Crowdfunder that their payment provider, Stripe, has specific terms and conditions that prohibit CBD-related projects. Similar platforms like Kickstarter also have rules against projects involving heavily regulated products.
According to co-founder Patrick Gillett, the issue is not only about legality but also concerns the uncertain nature of the changing regulatory landscape for CBD and hemp products. While CBD and hemp companies are legal in the UK and the US, they are often labeled as risky due to legal complexities in various jurisdictions.
Unfortunately, these crowdfunding restrictions significantly limit Hempen Organic’s exposure. Instead of utilizing popular crowdfunding platforms with broad audiences, they have been compelled to host their campaign on their website, which was not originally designed for such purposes. This has led to technical challenges, including website crashes due to high traffic, making it difficult for them to efficiently reach potential backers.
Gillett suggests that these restrictions on crowdfunding are a means for larger companies to maintain a monopoly in the industry. As a small not-for-profit organization that provides premium organic products highly respected within the industry, Hempen Organic finds themselves at a disadvantage compared to companies with more substantial resources for online marketing.
In response to these challenges, Hempen Organic’s crowdfunding campaign aims to raise £55,000 for marketing costs. They highlight the importance of their mission in promoting UK-grown hemp and supporting a greener economy through their not-for-profit social enterprise framework.
Gillett emphasizes how the difficulties faced by Hempen and other hemp businesses underscore the need for greater inclusivity and fairness in both crowdfunding and digital advertising realms. As the CBD and hemp industry continues to grow, addressing regulatory and accessibility issues becomes increasingly crucial to ensure a level playing field for businesses of all sizes and product offerings.
Overall, the regulatory uncertainty surrounding CBD businesses and the limitations imposed by crowdfunding platforms present obstacles for brands like Hempen Organic. As the food and beverage industry trends toward innovation, sustainability, and consumer demands, it is essential to address these challenges to foster a more inclusive and fair business environment.
