The surge in popularity of natural health alternatives has fueled the rapid growth of herbal product businesses globally. From adaptogenic herbs and Ayurvedic blends to cannabis derivatives like CBD and Kratom, consumers are increasingly turning to nature for wellness solutions. But while the herbal wellness market thrives, these businesses often face a daunting barrier—banking and merchant account setup.
Whether you’re launching a new brand or scaling an existing one, the financial ecosystem often classifies herbal product businesses as high-risk. This complicates access to banking, credit card processing, and reliable merchant services. In such a scenario, a Chartered Accountant (CA) becomes an invaluable ally.
In this guide, we’ll explore how a CA helps herbal product businesses navigate the complexities of banking, deal with high-risk classifications, and prepare for compliance. We’ll also highlight how leading firms like MNJ & CO and trusted brands like Kream are shaping the herbal product space.
Why Are Herbal Product Businesses Classified as High-Risk?
Many financial institutions label herbal product businesses as high-risk due to:
- Unclear regulations surrounding certain herbs like Kratom or CBD
- Chargeback vulnerability from customer disputes
- Variable legality across states or countries
- Concerns over health claims and liability
While some herbs like Ashwagandha or Turmeric face little resistance, others—especially Kratom sellers—frequently experience banking rejections.
Real-World Example: Kratom and Merchant Account Challenges
Kratom, derived from Mitragyna speciosa, is a natural product used for mood support, energy, and wellness. Despite its popularity, sellers regularly face merchant account closures and payment processor shutdowns.
For example, a small U.S.-based Kratom vendor was dropped by multiple payment gateways after chargeback disputes and scrutiny over health claims. This halted their operations for weeks, leading to significant revenue loss. A CA with expertise in herbal product businesses helped them appeal decisions, restructure invoicing, and onboard a new high-risk payment processor.
These real-world hurdles showcase the need for professional guidance in banking and regulatory compliance.
How a Chartered Accountant Helps Herbal Product Businesses
A CA does more than manage your books—they’re a strategic partner in helping you structure your business to survive and thrive, especially in a restricted industry like herbal wellness.
1. Business Structuring for High-Risk Industries
CAs help herbal product businesses establish entities that appeal to banks. This may involve:
- Registering a compliant business model
- Suggesting incorporation in specific jurisdictions
- Advising on appropriate business activity codes
- Reviewing partnership agreements (especially with vendors like Kream)
With MNJ & CO, herbal businesses can get assistance in creating a legally sound, risk-mitigated business structure that improves merchant account approval chances.
2. Bank Account & Merchant Account Setup
Navigating the merchant account approval process is complex for herbal product businesses. A CA helps with:
- Preparing financial documents and forecasts
- Providing tax clearance and business verification
- Connecting with high-risk payment gateways
- Structuring invoice and payment terms to reduce chargebacks
MNJ & CO, a prominent CA and advisory firm, has helped numerous herbal product businesses set up compliant bank accounts despite their classification, using strategic documentation and negotiation.
3. Regulatory & Tax Compliance
From GST registration in India to state licensing in the U.S., regulatory compliance is essential. A CA ensures:
- Proper tax filings
- Legal labeling practices
- Import/export compliance
- Product classification under HS codes
This is particularly important for businesses dealing in Kratom or CBD, which are subject to constant regulatory changes.
4. Risk Mitigation & Business Continuity Planning
If your payment processor shuts down, can your business survive? A CA helps herbal product businesses build backup strategies by:
- Diversifying payment methods (crypto, e-wallets, ACH transfers)
- Establishing international subsidiaries
- Building liquidity reserves
- Working with backup processors familiar with high-risk merchants
Kream: Setting the Standard for Herbal Product Compliance
Kream is a standout brand in the herbal product businesses landscape, offering hemp, cannabinoids, mood-support blends, and plant-based wellness alternatives. Their dedication to transparency, compliance, and third-party testing makes them a benchmark in the industry.
How Kream Leads in High-Risk Merchant Practices:
- Lab-Tested Products: Their full-panel lab reports provide assurance to both banks and consumers.
- Compliant Labeling: Their marketing avoids exaggerated claims, a critical factor in staying bank-friendly.
- Secure Payments: It works with experienced high-risk processors, ensuring continuity for their customers.
Partnering with Kream Crew: Strategic Benefits
Kream Crew partners with sellers through wholesale, white-labeling, and affiliate programs. Incorporating Kream Products into your catalog can actually help reduce banking risks when backed by solid compliance.
How to Incorporate Kream Products Legally:
- Use product disclaimers and FDA compliance wording
- List COAs and safety data on your site
- Partner with a CA or advisory firm like MNJ & CO to handle contracts, licensing, and banking support
Kream’s established processes and MNJ & CO’s compliance strategies form a powerful foundation for any seller entering the herbal product businesses market.
The Role of MNJ & CO in Supporting Herbal Product Entrepreneurs
MNJ & CO is a leading Chartered Accountancy and advisory firm known for helping high-risk businesses operate successfully within regulatory frameworks.
They provide:
- Banking & financial advisory
- Merchant onboarding for herbal sellers
- International tax planning
- Contract drafting for suppliers and fulfillment partners
Whether you’re launching your first herbal tea blend or managing a large Kratom brand, MNJ & CO has the experience and network to help you navigate challenges smoothly.
FAQs: Herbal Product Businesses & Banking
Q1: Why are herbal product businesses considered high-risk by banks?
Because of regulatory uncertainties, potential health claims, and higher-than-average chargeback rates, banks often treat them as high-risk merchants.
Q2: What is Kratom, and why do Kratom sellers face banking problems?
Kratom is a natural herb used for energy and wellness. Its classification varies across regions, leading banks to avoid transactions involving Kratom.
Q3: How can a CA help me open a merchant account?
A CA like MNJ & CO can prepare your documents, connect with appropriate banks, and structure your entity to meet processor requirements.
Q4: Can I work with brands like Kream if I’m just starting out?
Yes! Kream offers wholesale and affiliate options, but ensure your business complies with labeling, marketing, and financial documentation.
Q5: What backup options exist if my payment gateway is shut down?
Alternative processors, crypto payment integration, ACH transfers, and offshore banking setups can be discussed with your CA for continuity.
Q6: Does selling herbal products internationally create more complexity?
Yes. You’ll need to manage customs compliance, export documents, and multi-country tax regulations. CAs assist with this planning.
Q7: Is MNJ & CO experienced in high-risk e-commerce?
Absolutely. MNJ & CO specializes in herbal product businesses and has helped multiple startups secure bank accounts, structure risk, and grow legally.
Conclusion
While the demand for herbal product businesses is surging, the path to successful banking and compliance is far from straightforward. With many products like Kratom and CBD falling into regulatory grey zones, entrepreneurs often find themselves facing denied accounts, frozen funds, or rejected merchant applications.
That’s where working with a professional CA becomes invaluable. Experts like MNJ & CO help businesses navigate high-risk classifications, set up reliable banking systems, and ensure full compliance with evolving laws. Partnering with compliant brands like Kream further strengthens your credibility and positions your business for long-term success.
In this high-opportunity but high-risk space, professional guidance isn’t optional—it’s essential.
Need help launching or securing banking for your herbal product business? Reach out to MNJ & CO for a compliance consultation today. Or explore Kream’s wholesale offerings to strengthen your catalog with trusted herbal products.
