Square Is Dropping CBD: Where Hemp and CBD Sellers Can Process Payments Now

If you run a CBD business on the Square CBD program, you've probably seen the notice. We've been hearing from Square CBD sellers since the email went out. On August 7, 2026, Square told CBD merchants that selling CBD and hemp-derived products will no longer be permitted on its platform. Here's what changed, what you can still legally sell, and how you can switch payment processors without losing CBD sales.

What Square told CBD merchants

Square's email says that selling CBD and hemp-derived products, online or in person, "will no longer be permitted on Square's platform." That covers every channel where Square CBD processing ran: Square POS, your online store, invoices and payment links.

By October 15, 2026, you must remove all CBD, hemp and hemp-derived items from your Square catalog, both in person and online. If you sell other products alongside your hemp line, you can keep using Square for those items once the CBD SKUs are gone.

CBD merchants whose business is mainly CBD or hemp have reportedly been told their whole Square account will close on November 5, 2026. If you aren't sure which group you're in, ask Square support and get the answer in writing.

Square also said Square Loan repayment terms do not change. If you have an outstanding Square Loan, you still owe it after your Square CBD processing stops, so download your loan documents now.

A CBD shop owner reviewing paperwork at a retail counter next to a card terminal

Credit: Adaptiv Payments

Square's CBD cutoff vs. the federal hemp dates

Square's deadlines and the federal effective dates are two separate calendars, and Square's comes first.

The federal changes come from H.R. 5371, the November 2025 federal funding law, which rewrote the legal definition of hemp. Most of it was set to take effect on November 12, 2026. On September 2, 2026, the President signed H.R. 6500, which moved most of the change to December 11, 2026. The exception is cannabinoids the cannabis plant can't produce naturally, which still lose hemp status on November 12, 2026.

The dates, in order:

Square did not move its deadlines after H.R. 6500. Bills to delay the hemp rules further, or to regulate hemp THC instead of banning it, are pending in Congress, but as of September 22, 2026 none has passed. Don't wait on Congress. Square's dates are the ones that count.

What the federal hemp law changes

H.R. 5371 changes the legal definition of hemp in three ways that matter for the CBD industry and for CBD credit card processing.

• Total THC, not just delta-9. Under the 2018 Farm Bill, hemp was measured by delta-9 THC alone: no more than 0.3% by dry weight. The new definition counts total THC, which includes THCA. Many CBD products that passed on delta-9 alone will fail on total THC content.
• 0.4 mg of total THC per container. Finished hemp products are capped at 0.4 milligrams of total THC per container. Most full-spectrum tinctures and gummies contain far more than that per bottle or bag.
• Synthesized and converted cannabinoids are out. Cannabinoids made or converted outside the plant, such as delta-8 made from CBD, HHC and THC-O, no longer count as hemp. Cannabinoids the plant can't produce naturally lose hemp status on November 12, 2026, and the rest of the definition applies from December 11, 2026. If you sell anything in this category, treat the earlier date as your deadline.

This is not legal advice. Confirm your formulas and SKUs with a hemp attorney who knows both federal CBD regulations and the applicable laws in your state.

What you can still sell, and what you have to drop

CBD products come in many forms, such as oils, tinctures, gummies, capsules, topicals and pet products, and each one needs to be checked against the new rules.

Hemp-derived CBD products that can still qualify as federally legal hemp, as long as lab results show they meet the new definition:

• CBD isolate products. CBD isolate is pure cannabidiol with the other plant compounds removed, so it's the easiest format to keep under the cap.
• Broad-spectrum CBD oils, gummies and topicals. These contain multiple cannabinoids and terpenes but no detectable THC, so they can qualify if each container tests at or under 0.4 mg total THC.
• Pet CBD products that meet the same limit.
• Topicals formulated under the cap.

Products that will no longer be federally legal hemp:

• Full-spectrum tinctures, gummies or softgels over 0.4 mg total THC per container
• THCA flower sold as hemp
• Delta-8, delta-10, HHC, THC-O and other converted or synthetic cannabinoids
• Hemp THC gummies and drinks over the cap

After these dates, no legitimate payment processor or bank is going to take card payments for products that fall outside the federal hemp definition. Don't hide what you sell. Mislabeled products and offshore accounts get funds frozen and accounts closed.

CBD retailers must comply with local, state and federal regulations, and state law can be stricter than federal law. Several states have already restricted hemp-derived products, so check with local counsel which hemp-derived CBD products you can keep on your shelves and in your online store.

Why Square is getting out of CBD

In its notice, Square pointed to the new federal hemp definition as the reason for the change.

Square is a payment facilitator: it processes payments for a very large number of small businesses under its own account with its banks, using mostly automated risk checks. For low-risk businesses, that setup works well. It works badly for high risk categories, and especially for one where legality now depends on lab results per container and on how each cannabinoid was made.

The Square CBD program already worked differently from a standard Square account. Sellers had to apply to the program separately, have a registered business entity and provide lab results for every CBD product, and products had to contain no more than 0.3% delta-9 THC. Square didn't allow CBD vape cartridges or smokable hemp, didn't allow claims that CBD treats health conditions, charged higher fees for CBD transactions than its standard rates, and could freeze accounts during risk reviews. Rather than check every product against the new rules, Square chose a simple policy and ended CBD and hemp sales on Square's platform.

A dedicated CBD merchant account, which is what we set up for CBD sellers, works differently. An underwriter on the processor's compliance team reviews your products, certificates of analysis and website, and approves your business specifically. Processors that stay in the CBD market will still enforce the new hemp definition, so they will also decline products over the cap, THCA flower and converted cannabinoids.

A warehouse worker organizing boxes of CBD products on shelves

Credit: Adaptiv Payments

What underwriters will ask for when you apply for a CBD merchant account

Have these ready before you apply with any CBD payment processor, including us. The one applicants forget most often is their COAs.

Certificates of analysis (COAs). Recent lab results for every hemp-derived CBD product, showing total THC per container (not just delta-9), the lab name, the test date, the batch number, and confirmation that no synthetic cannabinoids are present.

Product list. Every CBD and hemp product you want to sell, with its name, strength, package size, format (tincture, gummy, topical and so on) and whether it is isolate, broad-spectrum or full-spectrum.

Website review. Underwriters check your online store for therapeutic claims. Remove any language saying your products treat, cure or prevent anxiety, pain, sleep problems or any other condition. Show ingredients, serving sizes and accurate THC content, link each product to its COA, and add an age gate where your state requires one.

Business documents. Articles of incorporation or LLC documents, your EIN, a voided business check or bank letter, and owner ID. Stores sometimes need to provide a copy of the lease.

Processing history. If you've processed CBD transactions before, through Square or anywhere else, expect to provide three to six months of recent processing statements. Underwriters use them to review volume, refunds and chargebacks.

Compliance attestations. Some processors ask you to confirm in writing that you won't sell converted cannabinoids, THCA flower or products over the 0.4 mg cap. Read what you sign and keep a copy.

How to switch from Square without a gap in CBD sales

Here's the order we'd tackle it in, starting today.

1. Confirm your group. Ask Square support whether you're in the October 15 catalog-removal group or the reported November 5 account-closure group. Save the written answer.

2. Back up your customer and business data. Download item-level sales reports, customer lists, subscriptions, recurring invoices, inventory management exports and your 1099-K forms. You'll need them for your books and for your new processor's underwriting.

3. Plan for saved cards and subscriptions. Assume the cards your customers saved with Square won't move to your new processor. Ask Square whether it can transfer them to another PCI-compliant provider, and plan to email subscription and repeat customers asking them to re-enter their card details on your new checkout. Tell them early, before their next order fails.

4. Replace Square POS hardware and checkout. Square readers and terminals only work with Square. Choose POS systems and card terminals your new processor supports, set a cutover date and train your staff before it.

5. Deal with your Square Loan. If your loan is repaid from a share of your Square sales, repayments will change once your CBD sales stop running through Square. Ask Square how repayment will work, keep the answer with your loan documents, and plan your cash flow for the switch.

6. Apply for a new CBD merchant account now. Don't wait until October. Underwriting takes time, and Square CBD sellers are all up against the same deadline. You can apply with Adaptiv Payments in about 60 seconds.

7. Test before you cut over. Once you're approved, run a few real transactions on the new processor, online and in store, while Square is still active. Test refunds, your card statement descriptor and deposits, and fix any problems while Square is still running.

How to choose the right payment processor for CBD now that Square is out

If we were picking between CBD payment processors for our own CBD shop, here's what we'd check.

Stability

Look for a high risk merchant account with a processor that has a track record in CBD merchant processing, rather than another payment facilitator that can change its policy overnight. A high risk processor that has worked with CBD and hemp businesses for years is less likely to exit when the rules change.

Supported products

Ask exactly which hemp-derived CBD products the processor's banks will accept under the new definition. After the federal changes, no reputable payment processing company will accept delta-8, THCA flower or full-spectrum products over the cap. If a provider says otherwise, treat it as a warning sign.

Fees and terms

CBD credit card processing costs more than standard credit card processing, as it does in other high risk industries. Compare the rate, monthly and statement fees, contract length, rolling reserve and early termination terms. If a rate looks too good, look for the catch: a surprise reserve or a frozen account. Get the pricing in writing, and if you process a lot, ask whether the rate drops with volume.

Chargeback management

Ask how the processor helps you minimize chargebacks and fight the ones you get, and whether it supports recurring billing if you sell subscriptions. Adaptiv's chargeback prevention tools are built for high risk merchants.

Data security

Your processor should offer PCI-compliant payment gateways with tokenization, so card data never sits on your own systems. See how a high-risk payment gateway handles this.

Integrations and support

Check that it works with your ecommerce platform (Shopify, WooCommerce, BigCommerce) and that you can reach someone at the processor when a payment fails. If you sell on WooCommerce, confirm the plugin works before you commit.

How Adaptiv Payments helps CBD and hemp businesses

Adaptiv Payments sets up high-risk merchant accounts for compliant CBD and hemp sellers. Online, in store, or both. We put every application in front of an underwriter who checks it against the new hemp definition, not an automated filter. Expect a decision in a couple of days.

• Apply in about 60 seconds, with no setup fees
• Next-day funding
• Integrations with Shopify, WooCommerce and BigCommerce, plus a virtual terminal for phone orders and card terminals for stores
• Fraud protection and chargeback tools

Whether a product is legal to sell, and how it's labeled, is a question for your attorney.

Can you use PayPal or Stripe for CBD instead?

No. As of September 2026, both PayPal and Stripe generally prohibit selling CBD products, and both have closed CBD accounts and held funds when they found them. The stricter federal hemp definition gives mainstream processors even more reason to avoid CBD payments.

Processing payments for CBD through a personal PayPal, Cash App or other peer-to-peer account breaks their user agreements and can get your account closed and your balance frozen. Use a processor that openly supports CBD and hemp businesses with a dedicated merchant account.

A CBD seller working at a laptop on a desk surrounded by shipping boxes

Credit: Adaptiv Payments

FAQ: Square's CBD ban

Next step: get your CBD payments in place before October 15

Square's CBD exit is set, and the federal hemp rules are getting stricter. To keep selling compliant CBD and accept credit and debit cards without interruption, you need a new merchant account in place before Square's deadline.

This week, go through your product line and drop anything that won't meet the new hemp definition. Gather current COAs and business documents, and back up your Square data. Then apply with a processor that supports CBD.

If you sell compliant CBD or hemp, we want to hear from you: Apply with Adaptiv Payments for a high-risk merchant account. It takes about 60 seconds, with no setup fees.

This article is for information only and is not legal or tax advice. Ask a qualified hemp attorney to confirm that each product you sell complies with federal and state law.