The world of smoke shop products is rapidly changing, with new and exciting items hitting the shelves nearly every day.
One product that’s recently exploded in popularity is kratom, an herb originating from evergreen trees in Southeast Asia. This supplement has become a favorite of tobacco and vape shop customers, who purchase it to chew, smoke, drink as a tea, or consume as a capsule.
Adding this herbal supplement to your smoke shop’s offerings can be an excellent opportunity to attract new customers and boost your sales — but there are a few key things to know before you stock up.
In this blog, we’ll explore the world of kratom payment processing and share our best tips for becoming your neighborhood’s go-to shop for kratom.
The Legal Status of Kratom
Before we dive into how to start selling kratom, let’s first cover some must-know legal limitations.
Even though kratom is currently legal at the federal level, it has always been a tightly-regulated substance, with the laws regarding its sale and use shifting often. In 2016, kratom was listed as a Schedule I substance, but the DEA quickly changed its mind in 2017.
Currently, there are six states with Kratom Consumer Protection Act (KCPA) laws that seek to establish guidelines for safe kratom consumption and protection for kratom users. Those states include Arizona, Georgia, Nevada, Oklahoma, Oregon, and Utah.
Six states have also banned kratom, including Alabama, Arkansas, Indiana, Rhode Island, Vermont, and Wisconsin — and officials in several other states are working on legislation to regulate it.
Many states are proposing KCPA laws or bans, so if you plan to start offering kratom in your smoke shop, it’s crucial to understand and stay up to date on the federal, state, and local regulations that govern this product.
Why You Need Specialty Kratom Payment Processing
Almost all smoke shops and tobacco shops are already classified as high-risk businesses. But what does that mean? A high-risk merchant is any business that financial institutions see as higher risk for fraud, financial instability, chargebacks, or operating in areas that are subject to more legal scrutiny (e.g. firearms, alcohol, gambling, etc.).
Given the complex legal landscape surrounding kratom, smoke shops carrying kratom, cannabidiol (CBD), and delta-8 often fall into the high-risk category since these products are relatively new to the market and pending regulation.
It’s important to note that high-risk payment processing is offered by some point of sale (POS) providers, but not all. Some providers who don’t explicitly support high-risk businesses may change their minds later on and decide to drop support for your business after you’ve signed up.
In other words, finding the right POS provider for your business from the get-go is a must.
Starting your kratom payment processing journey can seem daunting, but in the next sections, we’ll share everything you need to know to start selling kratom hassle-free.
1. The Benefits of Kratom Payment Processing
Being labeled as a high-risk merchant can sound like a negative, but that’s not the case — it simply means you need to work with specialized or industry-specific payment processors.
Better yet, kratom payment processing can be a huge advantage for your smoke shop.
Most importantly, working with a high-risk payment processor allows you to expand your smoke shop’s product offerings worry-free. As a high-risk merchant, you can be the first business in your neighborhood to sell new and popular products like kratom, CBD, and delta-8, bringing new customers through your door and giving your sales a boost.
Partnering with a kratom payment processing provider also gives you access to their industry expertise. These providers’ top priorities are security and compliance, and they’ll be able to help you protect your business from fraud and navigate the legal complexities of selling kratom and other highly-regulated products.
2. What Makes Kratom Payment Processing Different
It’s also important to cover the practical differences between standard payment processing and high-risk kratom payment processing.
The first distinction you’ll notice is that the process of securing a kratom payment processing provider is more extensive. These providers often require you to fill out an in-depth application and provide the relevant paperwork and records.
Another key factor to keep in mind is the payment processing fee rate. With high-risk kratom payment processing, the fee that your business pays for each transaction will typically be higher than a standard merchant account. However, these higher fees are often offset by the increased revenue you’ll receive from selling high-value, high-risk products.
In addition to higher processing fees, high-risk merchants are often required to pay higher chargeback fees and maintain a cash reserve with the payment processing provider.
Related Read: Smoke Shop Revenue 101: How To Maximize Profits
3. Why You Need a POS With Integrated Kratom Payment Processing
If you’re ready to become a high-risk merchant and start selling kratom in your smoke shop, your best bet is to secure kratom payment processing through your POS provider.
Integrated payment processing is more secure, provides a seamless experience, and often allows you to get the best rate on your payment processing fees.
We also recommend that you choose a POS system with integrated high-risk payment processing that’s specifically tailored to the tobacco and vape industry. With an industry-specific solution, you’ll have all the tools you need to run a compliant, efficient, and profitable smoke shop.
Using a specialty POS system also protects you against unexpected policy changes. Even our customers have told us stories of being unceremoniously dropped by their POS provider after years of service because of a sudden about-face on what high-risk industries to support.
Kratom Payment Processing Providers: 4 Picks
If you’re looking to expand to selling kratom, CBD, or other legally-gray items in your smoke shop, choosing the right POS provider is essential.
Even though we offer a great, industry-specific solution, we know that different businesses have different needs. All of the POS providers offer high-risk processing for kratom sales, in addition to some specific features that help them stand out.
4. KORONA POS
KORONA POS works with multiple high-risk retailers, including liquor stores, cigar shops, and vape stores. They’re also the only vendor on this list to support THC sales, making them a good fit for dispensaries who are considering expanding into kratom sales.
What makes them unique: In addition to high-risk merchant support and THC sales support, KORONA POS also comes equipped with some unique marketing features, including the ability to send personalized messages to customers over SMS and email.
Pricing: KORONA POS’ retail plan starts at $69/month.
3. C-Store POS
Not all kratom is sold in smoke or vape shops, and it’s important to have a POS shop that can handle a wide range of inventory. Enter C-Store POS, a system built for convenience stores that includes in-house high-risk payment processing.
What makes them unique: C-Store POS is a robust system that can help you manage inventory of everything from alcohol, kratom, and CBD to snacks and drinks. This flexibility makes it ideal for corner stores or convenience stores offering a diverse range of products.
Pricing: C-Store POS offers multiple pricing tiers for different sizes of businesses. Try their pricing configurator tool to learn more.
2. FTx POS
FTx POS offers flexible POS solutions for tobacco stores and other high-risk industries, and includes many optional add-ons so you can customize the perfect system for your business.
What makes them unique: FTx offers in-house payment processing to keep high-risk fees low, and has integrations for things like age verification, digital signage, inventory tracking, e-commerce, and other features.
Pricing: FTX’s Core Plan starts at $99/month.
1. Cigars POS
We’d be lying if we said we weren’t saving the best for last. Cigars POS is a specialty POS solution specifically tailored to simplify sales at smoke shops, cigar lounges, vape stores, and other tobacco-adjacent industries.
What makes us unique: In addition to our affordable, in-house payment processing, we also have a solution curated to tobacco and vape shops, including robust inventory tracking, custom product tags, advanced reporting, and customizable customer loyalty.
Pricing: We work closely with your business to give you only the hardware and software that you need. Start your custom quote using our easy build and price tool.
Sell Kratom Hassle-Free With Cigars POS
Kratom payment processing can be a game-changer for your smoke shop, allowing you to carry new and exciting products while keeping your business secure.
If you’re ready to get started with the best POS system with integrated kratom payment processing, then you’re in the right place! Cigars POS is a POS solution designed for smoke shops just like yours.
That said, don’t jump into upgrading your POS system unprepared. Check out our free and comprehensive Tobacco POS Buyers’ Guide to learn about the various features, hardware, and costs of implementing a new POS system.
