Major Payment Processing Company Disappears, Leaving CBD Operators In Limbo

A major credit processor for some of the CBD industry’s biggest brands has shut down, resulting in lost capital and a chain reaction that is threatening some CBD operators’ ability to stay in business.

Court filings allege that Las Vegas-based T1 Payments, branded as a company that specializes in payment processing for high-risk industries, withheld millions of dollars in funds owed to the businesses it served. The alleged fraud began as early as 2017 and continued until the company folded this summer.

Among recent suits filed against T1 Payments in include a claim from Florida-based Diamond CBD that T1 withheld $649,311 owed to the company, a dispute over $233,424 filed by Southern California-based nutrition supplier Vida Divina, and a $204,859 charge from Kentucky-based CBD provider Onyx + Rose. The latter suit was settled out of court.

Most recently, Verified CBD, a major U.S. provider that sources products in Massachusetts, Florida and Utah, announced it was closing for business because T1 “is taking the majority of (Verified CBD’s) funds down with them.”

T1 allegedly operated its scam by recruiting clients in CBD, e-commerce and other industries considered “high-risk” because of a lack of federal regulation. Those businesses have limited options for banking and credit card processing because most reputable banks and credit card companies don’t want to assume the risk associated with largely unregulated industries.

That’s where T1 allegedly came in. The Las Vegas-company would process card payments for customers of the CBD stores or e-commerce businesses, and then send the money back to the businesses – taking a small fee for themselves in the process. All was well until T1 started keeping all of the money for themselves.

Nearly all traces to the company, which was launched in 2012 and headquartered in the high-rent Summerlin neighborhood in west Las Vegas, are gone. A listed 800-number for T1 Payments has been disconnected and its Summerlin office suit has been vacated. A Facebook page for the company remains online, but hasn’t been updated since February.

Donald Kasdon, the company’s listed founder, president and CEO who has written several articles about e-commerce and high-risk merchant accounts, did not respond to multiple calls for comment to an email address associated with T1 Payments nor a cell phone number listed in his name. The company’s website was also taken down as of Monday morning.

T1 Payments, which also did business as 7 Processing, could be part of a larger web of shell companies that extend overseas, according to a report. Online reviews of T1 spanning several years suggest the company has done extensive business with clients in Europe as well as the United States.