Square's CBD and Hemp Ban: What Sellers Should Do Next

Square no longer lets sellers ring up CBD, hemp or hemp-derived products, in person or online. Sellers had until October 15, 2026 to pull those items from their catalogs, and businesses built around hemp were also told their Square accounts close on November 5. Federal law tightens right behind that. Products made with cannabinoids a cannabis plant can't naturally produce lose hemp status on November 12, and on December 11 a new THC test and a 0.4 mg per container cap take most intoxicating hemp products out of the definition, along with many CBD products that carry trace THC.

That is really three problems, and it helps to keep them apart. The first is which of your products you can still legally sell. The second is where to take card payments for them. The third only applies if Square is closing your account: everything else Square was running for you, from the time clock to gift cards, leaves with it.

Below is what changed and when, what the federal rewrite covers, where CBD sellers can still process cards, and a checklist for getting off Square without losing your records. Dates and rules were checked against the statute, the Congressional Research Service, reporting on Square's notices, Square's own support pages and each processor's published policy as of the time of this post's publication.

What exactly did Square change, and when?

In August, Square emailed sellers that CBD and hemp-derived products would no longer be allowed on its platform. Marijuana Moment, which reported the email, says sellers were told to remove "any CBD, hemp and hemp-derived items" from their in-person and online catalogs by October 15, 2026. Products that aren't CBD or hemp are not affected, and the email said an outstanding Square Loan keeps its balance and terms.

The notice went out in two versions. Sellers whose catalogs mix CBD with other products keep their accounts and lose only the CBD and hemp items. Sellers whose businesses are built around hemp or CBD were told their accounts would close on November 5, and a hemp retailer that received the closure version quoted from its notice, which puts the termination at 11:59 p.m. Eastern that night.

Square's stated reason is the federal hemp rewrite covered in the next section. When Marijuana Moment asked whether Square would revisit the policy if the federal ban were delayed or reversed, a spokesperson said the company had nothing specific to share. Most of the ban was delayed a few weeks later, and as of this writing we have found no report of Square moving either date.

Three things are worth reading closely:

• It covers your whole catalog. A CBD upgrade on a massage or a CBD shot in a latte is a catalog item too. If you're unsure about one, ask Square and keep the answer in writing.
• It says hemp, not just CBD. As reported, the notice doesn't separate hemp seed foods or hemp fabric from cannabinoid products, even though federal law treats them very differently. If you sell hemp hearts or hemp shirts, ask Square directly.
• Square may look past its own catalog. A seller posted in Square's seller community in August that Square suspended the account and held transfers over CBD information on the business's website, which the seller says only described the products and never sold them. That is one seller's account, not a Square policy. Still, Square's business restrictions page says it will act on any account that breaks its terms, regardless of when the problem is found, and can hold transfers while it checks. Clean up your website and social listings at the same time as your catalog.

What does the federal hemp change actually do?

Since 2018, hemp has meant cannabis with no more than 0.3 percent delta-9 THC by dry weight, and that is still the test today. That single measure is the gap that delta-8 gummies, THCA flower and hemp THC seltzers grew up in. Section 781 of Public Law 119-37, signed November 12, 2025, closes it in three ways:

• It counts total THC. From December 11, the 0.3 percent test covers total tetrahydrocannabinols, including THCA, not just delta-9. A product that qualifies as hemp today because its delta-9 reading is low, while most of its THC sits in THCA form, won't qualify after that.
• It caps finished products at 0.4 mg per container. A final product can't carry more than 0.4 milligrams combined of total THC (including THCA) and any cannabinoids with, or marketed as having, similar effects. The container is the innermost wrapping or vessel in direct contact with the product as sold at retail, so the cap applies per can, bottle or bag, not per serving.
• It excludes synthesized cannabinoids. Products made with cannabinoids the plant can't produce naturally are out, and so are naturally occurring cannabinoids that were synthesized or manufactured outside the plant.

Anything that falls outside the definition isn't hemp, and the Congressional Research Service notes it would instead be regulated as marijuana under the Controlled Substances Act. The definition also reaches products intended for human or animal use, applied any way, so CBD pet treats and topicals are in scope.

When does it take effect?

The law originally gave the industry a year, which would have made it November 12, 2026. A stopgap funding bill that the President signed on September 2 delayed portions of the change to December 11, 2026, according to the CRS report, while some provisions kept the original date. A summary from the law firm Vicente spells out the split: the total THC test and the 0.4 mg cap moved to December 11, and the exclusion for products containing cannabinoids a cannabis plant cannot naturally produce still takes effect November 12. CRS says products caught by that exclusion are classified as marijuana starting November 12.

The extra four weeks are not a fix. Bills to delay the change again, loosen the THC limits or regulate hemp products instead of banning them are pending, but none had become law as of this writing. The FDA also still had not published the cannabinoid lists the law told it to release within 90 days, as of CRS's September 28 update. Plan for November 12 if you carry anything made with cannabinoids a cannabis plant can't naturally produce and December 11 for everything else, and treat anything better as a bonus.

State law is a separate layer. CRS notes that some states have already changed their laws to match the new definition. States can also set stricter rules of their own, so a product can be legal federally and still restricted where you sell it. Check with your state's agriculture or cannabis regulator before you decide what to keep.

Which of your products can you keep selling after December 11?

Check the certificate of analysis, not the label. The 0.4 mg cap is small enough that the math surprises people.

Take a 30 mL bottle of full-spectrum CBD oil whose lab report shows 0.1 mg of total THC per mL. That bottle holds 3 mg of THC, more than seven times the cap, even though the oil passes the old 0.3 percent test with room to spare. Those numbers are illustrative, so run your own: total THC per mL or per gram, times the amount in the container, against 0.4 mg.

The same math applies to a "non-detect" result, which only means the THC was below the lab's detection limit. A 30 gram jar tested at a 0.01 percent limit could still hold up to 3 mg of THC, so ask your lab or supplier what the limit was.

Here is roughly how common product types line up:

• Hemp THC drinks, gummies and vapes. These are built to deliver a dose, so most of them land over the cap. A beverage attorney writing about the cap put a typical low-dose hemp drink at 2 to 5 mg of THC per can, with many at 10 mg, which is five to twenty-five times the limit in a single can. Advocates cited in the same piece estimated that 95 percent or more of the hemp products people consume exceed it.
• THCA flower and pre-rolls. From December 11, THCA counts toward total THC, so flower sold as hemp on the strength of a low delta-9 reading is unlikely to qualify.
• Delta-8 THC. It counts toward the THC cap from December 11. The FDA says concentrated delta-8 is typically made by chemically converting hemp-derived CBD, which likely also puts it under the exclusion for naturally occurring cannabinoids synthesized outside the plant. Attorneys tracking the delay, including Rod Kight, read that exclusion as taking effect on December 11 too, which would keep delta-8 made from CBD out of the November 12 group. Confirm with your own lawyer.
• Full-spectrum CBD. Depends on total THC per container, and full-spectrum products carry some THC by design. Jonathan Miller of the U.S. Hemp Roundtable told NPR in February that even the vast majority of non-intoxicating CBD products have more than 0.4 mg of THC per container, and a December 2025 executive order says outright that some full-spectrum CBD products will once again be controlled as marijuana. Broad-spectrum and isolate products with non-detectable THC have the best chance.
• CBD topicals and pet products. Not exempt. The definition reaches products for human or animal use, whether they're swallowed or rubbed in.
• Hemp seed foods, oil and fabric. Industrial hemp, grown for fiber, grain or seed oil, is still hemp under federal law. Whether Square will process it is the separate question above.

Anything over the line once its date arrives stops being a payment problem and becomes a legal one. The realistic moves are selling through it while it's still legal where you are, asking suppliers about returns, and getting a lawyer's read on anything you aren't sure about.

Where can you still take card payments for CBD?

Fewer places than a year ago. Most of the big self-serve processors either exclude CBD or allow it narrowly, and what's left is mostly high-risk merchant accounts, which cost more and often hold back part of your money. Here is where the mainstream options stand today.

Among restaurant and bar systems, Toast has the clearest written path. Its prohibited items list bans CBD and hemp except under its hemp and CBD policy, which limits sellers to the US, caps THC at 0.3 percent by dry weight plus any other limit the law sets (from December 11, that includes the 0.4 mg cap), requires ID checks where age limits apply, bans hemp products containing alcohol or synthetic cannabinoids, and keeps hemp under 5 percent of total sales unless Toast approves more in writing. Toast can also tell you to pull hemp items at any time.

For retail, Shopify Payments doesn't support hemp, CBD or THC, but Shopify lets you apply to a third-party provider instead, and in a store you'd use that provider's own card reader. Lightspeed's CBD retail page lists 2Accept, a high-risk processor that integrates with its POS.

Stripe lists CBD with negligible THC as restricted, which means case-by-case review and an approval it can withdraw, and it prohibits CBD over local THC limits. Its FAQ describes supporting these products only on a limited basis, for licensed users in specific countries. PayPal's acceptable use policy doesn't mention CBD at all, and Venmo isn't accepting applications for new business accounts, with terms that don't address CBD for the business profiles it still offers. Helcim's US policy prohibits US marijuana-related businesses, unlicensed cannabis products and compounds used for intoxicating effect, and doesn't mention CBD or hemp either way. For Clover, SpotOn and Heartland we found no published CBD policy, so ask the provider, and the bank or reseller behind your account if there is one, and get the answer in writing.

What does a high-risk merchant account involve?

If CBD is a real share of your sales, you'll most likely end up with a high-risk merchant account, either directly or through a POS built for CBD stores. "High-risk" describes how the bank prices and protects itself, not a verdict on your business, and it shows up in three places.

• Price. Expect to pay more than Square's 2.6 percent plus 15 cents for in-person sales on its free plan. KORONA, a POS company that integrates with outside processors, puts typical CBD rates at 3.5 to 7 percent, plus a monthly gateway fee of usually $20 to $50. 2Accept, a high-risk processor, lists CBD in a pricing tier at 3.49 percent plus 25 cents and says rates start at 3.29 percent for established online sellers, with in-store pricing lower. Both are vendors, so treat those numbers as the range to negotiate inside, not a quote.
• Reserve. Banks commonly hold back a reserve from higher-risk merchants and can delay settlement while they check questionable transactions, according to the OCC's merchant processing handbook for bank examiners. The vendor terms above describe holding up to 10 percent of each sale for anywhere from 60 to 180 days. That is money you've earned and can't use yet.
• Contract. KORONA says some CBD accounts carry one- or two-year terms with early termination fees. 2Accept advertises none, though it may require a monthly minimum and asks for 30 days' notice to close. Ask before you sign, and think twice about a long contract or a card reader lease for a product line whose legal status changes in December.

Underwriting asks more of you, too. 2Accept, for example, asks for third-party certificates of analysis for every CBD product, along with bank statements, formation documents and any state hemp permits. After December 11, expect underwriters to want certificates that show total THC per container, since that becomes the legal test. That last point is our inference; we haven't seen a processor publish it yet.

Are there POS systems built for CBD stores?

Several, and most of them bundle the processing so you aren't shopping for a bank on your own. KORONA is the exception: it isn't a processor itself and integrates with outside ones, so you'd still need to find a processor that accepts CBD. Cova, BLAZE, Flowhub and Celerant each sell a POS for CBD retailers with payment processing attached. We haven't tested any of them, and their pages describe what they sell today, not what their processors will underwrite after December 11. Ask that before anything else.

What should you avoid?

• Miscoded transactions. A processor that offers to run CBD as some other kind of business is offering to break card network rules, and you're the one who pays when it's caught. Merchants terminated for that kind of activity can land on Mastercard's MATCH list, and listings stay active for five years, which makes any new card account hard to get.
• "Cashless ATM" setups. Visa warned acquirers in December 2021 that these devices miscode purchases as ATM cash disbursements. A Kansas City cannabis company faces a proposed class action over one, reported in June 2026, though the claims are still allegations.
• Anything over the federal line. Once a product stops being hemp, it's marijuana under federal law, and the major card networks treat US cannabis sales as illegal transactions. As of May 2026, Visa and Mastercard hadn't changed those rules after the federal rescheduling order. A processor willing to take it anyway is a risk to you, not a solution.

Should you split CBD onto a second processor or move everything?

It mostly comes down to how much of your sales CBD is. If Square is closing your account, the choice is already made and everything moves, which the next section covers. If you kept your account, keeping Square for everything else and running CBD through a separate high-risk account is usually cheaper, because the higher rate and the reserve only touch the CBD sales.

Here is an illustrative shop doing $40,000 a month in card sales at an average ticket of $25, with $8,000 of that in CBD. It uses Square's 2.6 percent plus 15 cents for the regular sales, and for the high-risk account an assumed 4 percent plus 25 cents, a $30 monthly gateway fee and a 10 percent reserve held for six months, all inside the ranges above.

On those assumptions the split saves about $576 a month in fees, close to $7,000 a year, and keeps about $19,000 more of your own cash free after six months. What it costs is simplicity: two card readers at the counter, two sets of reports to reconcile, staff who know which items go on which reader, and a second contract to manage. A cash-only CBD shelf is the low-tech version of the same split, and it works for compliant products if you're ready for the cash handling that comes with it.

Three things can flip the answer:

• Square's view of it. As reported, the notice doesn't say whether Square is comfortable with you selling CBD through a separate processor at the same business. Ask before you set it up, and keep the answer in writing.
• How much CBD survives December 11. If most of the line fails the per-container cap, a second account with its own monthly fee, reserve and possibly a contract may not be worth keeping. Run the certificate math first.
• Your POS provider's limits. Toast, for one, caps hemp at under 5 percent of sales unless it approves more in writing, so a bar whose hemp drinks are 8 percent of sales needs that approval to keep them on the menu.

If Square closes your account, what else goes with it?

Square sells itself as one system, which is exactly what makes leaving it harder than switching card readers. Square's page on closing your own account says that once an account is deactivated you lose access to your payment history and account information, including 1099-K forms, your team members are removed, and the account can't be reactivated. Square hasn't said what differs when it closes the account for you, so plan as if it's the same. The same page notes that keeping an account open costs nothing, which matters for mixed sellers who only lost their CBD items: don't close a Square account you still need.

If your account is closing on November 5, work through every tool you used, not just payments.

Replace the time clock before the cutover

Of everything on that list, the time clock is the one that catches people out, because payday arrives whether or not the switch went smoothly. If your team clocked in on Square, the hours, breaks and schedules live in Square, and when the account goes, so does your copy.

Federal law expects you to keep them. The Department of Labor's recordkeeping rules require payroll records for three years, and the time cards and work schedules behind them for two. Square's timecard export runs one team member at a time: pick the person, the location and the date range, then download their shift history as a spreadsheet. Do it for everyone who worked during the years you need, from a computer, because the export doesn't work in the team app. For schedules, Square documents printing a published schedule rather than exporting one, so print or save the weeks you need.

Then start the replacement time clock at the top of a pay period, ideally one that begins before Square closes your account. A pay period split across two systems is how hours end up rebuilt from memory and text messages.

One of our customers made this kind of switch recently. They were moving to a POS that didn't include a time clock, so their team's clock-ins needed a new home. They timed the cutover for the first day of a new pay period, and in the week before it, everyone on the team downloaded our app and set up an account. When the new period started, the team clocked in and out there instead of on the old system. It went fairly smoothly, and it's the order I'd recommend to anyone making the same move: accounts set up the week before, and the switch on the first day of a pay period.

If you're changing how hours are captured anyway, it's a good moment to settle your rounding rules on purpose, and our guide to time clock rounding covers what the law allows.

Ask Square Payroll what it will still file

If you ran payroll through Square, closing Square Payroll is permanent, and Square's subscription page doesn't spell out what happens to your tax filings when you close it. Before your account closes, ask in writing which quarterly and year-end filings Square will make for the quarters it ran, and download every pay record. Our small business payroll guide covers the basics any payroll setup has to get right.

Gift cards are money customers already paid you

Balances on Square gift cards you sold are still owed to your customers, and federal rules bar store gift card funds from expiring within five years of the card being issued or last loaded. Stop selling Square gift cards now. Then decide how you'll honor what's outstanding: redeem balances before the account closes, swap them for your new system's gift cards or store credit, or refund them. Your state may have gift card rules of its own.

Square Loans keep their terms

The notice said loan balances and terms don't change. Square's repayment page explains how that works: repayment comes out as a fixed percentage of daily card sales until the loan is paid, with minimum payments due on a schedule. Move your card sales somewhere else and the automatic payments shrink or stop, but the minimums don't. Miss one and Square can raise the repayment rate and debit your Square balance or linked bank account for the shortfall. If your sales are leaving Square, set up manual payments. The closure notice that hemp retailer quoted mentions alternatives such as a payment plan, so ask for one and get it in writing.

Saved cards take up to two weeks to move

If you charge customers' saved cards for deposits, subscriptions or house accounts, Square can send them to your new processor. The account owner has to request it by phone, the new processor has to be PCI DSS Level 1 compliant, and Square puts the average turnaround at up to two weeks. With a November 5 closure, that call should happen this week.

What should you do this week?

1. Pull your Square item list and flag every CBD, hemp or hemp-derived item, including service add-ons and anything on your website or social accounts.
2. Get a current certificate of analysis for each product you plan to keep, and do the per-container math against 0.4 mg.
3. Apply to a processor that will underwrite CBD now, with a certificate for every product ready to send. If your Square account is closing, you want the new account approved before November 5.
4. If Square is closing your account, export items, customers and payment history, download every 1099-K issued so far, ask in writing how you'll get your 2026 form, and request your saved cards, all before November 5.
5. Export each team member's timecards, print or save your published schedules, and start your new time clock at the top of a pay period.
6. Stop selling Square gift cards and decide how you'll honor outstanding balances.
7. Set up manual payments for any Square Loan.
8. Decide what happens to stock that fails the federal test: by November 12 for anything made with cannabinoids a cannabis plant can't naturally produce, and by December 11 for everything else. Check your state's rules too.
9. Run the plan past a lawyer who works with hemp businesses.

None of this is pleasant, and some of it may change again before December. The work that holds up either way is the same: know exactly what's in each container you sell, get your payments onto a processor that has approved what you sell, and make sure your records leave Square with you.

This article is general information, not legal advice. Hemp, CBD and payment rules are changing quickly and vary by state, so check the current rules where you operate, or talk to an attorney.