SHARE

The contradictions between state & federal authorities are increasingly polarized. That forces ancillary smoking product business’ to chase a shifting legal line.

My name is Joe Khoury, and I invented the rolling tray phone case & founded iRollie, a manufacturer & retailer of innovative smoking accessories. We have seen and experienced many of the business implications of this floating line of legality. We’re here to help you sidestep the mistakes!

Ancillary Brands

Product Marketing

ALL PRODUCTS FOR TOBACCO USE ONLY. You must ensure that your product is not seen nor promoted alongside a federally illegal substance, cannabis. While many companies do advertise products for cannabis and are fully operating, it opens them up to potential liability & issues.

Import and Export Liability

Marketed for Cannabis

Products marketed for cannabis have recently been seized and destroyed by US Customs & Border Patrol. Stashlogix manufactures a canvas bag designed for child proof cannabis storage and lost $10K+ of their inventory stored.

Branded Product

Our original rolling tray phone case, seen above, was confiscated by US Customs & Border Patrol. We created white labeled products for a cannabis business. The brand’s logo had a small cannabis leaf. This was enough to have an innocuous looking phone case seized. So, no matter how small, you cannot import products with graphics containing cannabis or allude to it.

Other Liabilities

This federal & local government power struggle is felt beyond imports. Many ancillary product businesses are refused banking, payment processing, access to crowdfunding, social ads, and many more services offered to entrepreneurs & innovators in other industries.

Crowdfunding:

Major crowdfunding portals have run smoking accessory campaigns before. More recently, they have been cracking down on ancillary products in federal compliance. We ran an indiegogo campaign for our new product, the Roll & Stash Phone Case.

The campaign was pre-approved, then shut down two days after launch for being “too risky”, not violating “terms of use” or law.

iRollie

Social Ads:

All mainstream social platforms claim not to take any ads from businesses (finishing)

Online Payment Processing:

No matter what processor you use, you will need a secure PCI Certified Payment Gateway to serve as a secure gateway between your website and a customer’s bank.  

Again, this legal ambiguity allows many businesses to fly under the radar of payment processors. Though a strategy, not a reliable one following the closure & freezing of smoking product business accounts & funds. Risky processors listed below.

  • Square
  • Paypal
  • First data

There are payment processors specifically for online head shops & smoking accessory vendors. See the list below:

  • Verifi
    • Payment processor specifically for high-risk products (ie – tobacco, liquor, firearms, etc)
    • Affordable
    • Integrates with Shopify & Woocommerce
  • Leap Payments
  • Advantage Processors
    • Processor specifically for high-risk products
    • Specific e-commerce merchant portal for CBD & Canna companies
    • Integrates with Shopify & Woocommerce
  • Trust Commerce
    • Does not specialize in high-risk products, but offers this service
    • More expensive
    • Clients include Library of Congress
    • Integrates with Shopify & Woocommerce
  • BizArmour
    • Integrates with WordPress & Shopify.
    • Piggyback off Authorize.net processor

Traditional Banking:

Any product’s implication with smoking is usually enough to scare off large banks, ie – Bank of America, TD Bank.  Some smaller banks create accounts for businesses that are explicit about the LEGAL USE ONLY of their products for the federal bank to comply with federal law.

While iRollie products are for TOBACCO USE ONLY, we were denied banking & merchant services with Bank of America.

Credit Unions:

Credit unions are not beholden to as stringent federal guidelines because they’re not FDIC insured. This is why they have more flexibility in allowing merchant accounts, especially on a local level.

In conclusion, the legal landscape surrounding ancillary smoking accessories is still evolving. This administration is seemingly exercising its federal authority spearhead by Sessions’ staunch opposition of this industry. So, I will keep you informed from the front lines of what’s going on in the accessory market.

Check out our products here.

Want to read more about the industry? Click here.