Growing and selling tobacco has become more than a hobby over the years. There is the enjoyment of planting the seeds, cultivating and curating the crop, and then being paid for your hard work. If you are one of these people who have aspirations for starting a tobacco company, it is important to do your due diligence. It’s not an easy business to get into, but loyal customers are easy to find when you fulfill a niche in the market. You just have to be sure that you have the tobacco licenses, the website or storefronts, and the business plan to help you when selling online.

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Is it Legal to Grow Tobacco?

For personal use, cultivating and consuming tobacco is not federally regulated and is therefore legal in most states.

But when growing and selling tobacco, things get a little more complicated. So, then is it legal to grow tobacco? According to federal law, all businesses who sell tobacco, or any of its by-products, must pay taxes on their sale. In addition to this, the business must have all proper licenses for their state.

Get Your Tobacco License

Now that it is legal to grow tobacco, how do you make a business out of it? Well, first of all, you need the proper licenses.

The industry of tobacco is heavily regulated, and as a business owner, you will need to know all about it before jumping in. Many of the regulations depend on the location that you will be growing and selling the tobacco from, so be sure to check with your state and local laws beforehand. But these are the 4 types of licenses that you may need to obtain before you begin to sell:


With so many things to consider, hashing all of these details before jumping in will make your business run smoother.

Diversify Your Company by Selling Cigarettes Online

As obvious as it may seem, branching out to selling cigarettes when you already sell tobacco online seems like a no-brainer. There are many more people who prefer purchasing the final product: cigarettes, rather than tobacco, rolling papers, and any additional equipment needed to make their own.

Other ancillary products:

Cigars and cigarillosRolling papersPipes and rolling machinesAshtrays, carrying cases, etc.

Any of these items would fit well into your tobacco business, bringing in a diverse clientele and higher profits.

The Tobacco Industry is High Risk

When applying for a merchant account for your tobacco growing and selling business you may be in for a surprise. The fact of the matter is that traditional banks consider this type of business high risk. The reasons for this include fraud, high chargeback rates, and the industry’s issues with legality.

All types of online businesses deal with fraud much more often than traditional, brick-and-mortar businesses. It is easier for customers to get away with fraudulent activity behind the anonymity of the internet. Selling physical items also puts you at risk of chargebacks. If customers aren’t happy with the quality of your products, they may resort to requesting a refund through their bank. This is bad news for the merchant and may result in account pauses or closure. The legality portion of tobacco is mainly due to the strict laws concerning the sale of the plant itself. If you misstep, your business is in jeopardy which isn’t a good thing for anyone involved.

Get credit card processing for your tobacco company

New business owners will turn to companies like Stripe or PayPal and open a merchant account. What happens in many cases is that the accounts get shut down without any warning or explanation. The reason this happens is that it is against the terms of service which is written in fine print. But, it is possible to get a merchant account without the fear of being shut down.

Opening a merchant account safely is possible with high risk merchant account specialists. These are the experts that are able to work with the leading banks on your behalf. The application process is not much different than with a traditional bank and can be completed online.

Once your merchant account is approved, you will be able to integrate a secure and PCI compliant virtual terminal.

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When searching for high risk merchant account specialists be sure to choose a company that you can trust. Do not be afraid to ask questions. As a business owner, you will want to make sure that you are able to concentrate on your business and not worry about processing your payments.