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Square Is Dropping CBD Merchants: What to Know Before November 2026

Square Is Dropping CBD Merchants before November 2026. Learn why, what the new hemp rules mean, and how to apply for alternative CBD payment processing.

Presented by Allen Kopelman, CEO — Nationwide Payment Systems-Host of B2B Vault: The Biz2Biz Podcast 

AI OVERVIEW

Square Is Dropping CBD Merchants: Did Square Announce It? 

On August 7, 2026, CBD and hemp merchants began reporting that Square sent notices informing them that CBD and hemp-derived products will no longer be permitted on the Square platform. 

One notice posted publicly states that the change applies to CBD and hemp-derived products sold online or in person and says the merchant's Square account will close November 5, 2026. (Reddit) 

Another hemp retailer reported receiving a similar Square notification on the same day. (Reddit) 

Interestingly, as of this writing, Square's public CBD processing page still advertises its CBD Program and states that eligible businesses may accept payments for qualifying hemp-derived CBD products. (Square) 

That makes it especially important for CBD business owners to pay attention to communications coming directly from Square regarding their individual accounts. 

Why Square Is Dropping CBD Merchants 

The issue stems from a major change Congress made to the federal definition of hemp. 

In November 2025, Congress enacted Public Law 119-37, which amended Section 297A of the Agricultural Marketing Act of 1946. 

The revised definition becomes effective November 12, 2026. (Congress.gov) 

Under the new law, hemp will be measured using total THC, including THCA, instead of simply relying on delta-9 THC concentration. 

The federal statute defines hemp, in part, as cannabis containing: 

“a total tetrahydrocannabinols concentration (including tetrahydrocannabinol acid) of not more than 0.3 percent on a dry weight basis.” 

(Congress.gov) 

But that isn't the only important change. 

Square Is Dropping CBD Merchants: Why the 0.4 Milligram Rule Matters 

Congress also created a new standard for final hemp-derived cannabinoid products. 

The law excludes certain final products containing more than 0.4 milligrams combined total per container of total THC and other cannabinoids determined to have similar effects. 

The statute specifically references: 

“greater than 0.4 milligrams combined total per container” 

for applicable cannabinoids. (Congress.gov) 

Congressional Research Service describes the change, similarly, explaining that the new definition excludes final hemp-derived cannabinoid products containing more than 0.4 milligrams of THC per container, along with certain other cannabinoids addressed by the law. 

This is a very different standard from the CBD industry's familiar 0.3% delta-9 THC dry-weight rule. 

That difference could affect products that have historically been marketed and sold as federally compliant hemp. 

Does This Mean CBD Is Now Illegal? 

No. It is not accurate to simply say that all CBD becomes illegal on November 12, 2026. 

The law changes which cannabis and hemp-derived products qualify for the federal hemp exemption. 

Products that satisfy the new definition may continue to be treated as hemp, while products that fall outside the definition could potentially be treated differently under federal controlled-substance law. 

The Congressional Research Service specifically notes that CBD is a non-psychoactive cannabinoid and that hemp meeting the federal definition is not a controlled substance. 

That distinction matters. 

A processor deciding to leave the entire CBD category is a business and risk-management decision. It does not necessarily mean every CBD merchant or every CBD product has become illegal. 

Square Is Dropping CBD Merchants—Nationwide Payment Systems Is Accepting Applications 

If you have received a termination notice from Square, you may still be able to accept credit and debit cards. 

Nationwide Payment Systems works with compliant CBD and hemp merchants and accepts applications for CBD merchant accounts. 

Unlike an automated aggregator model where thousands of different businesses are placed under one payment platform, CBD merchant accounts generally require more specialized underwriting. 

Our team can review your business before submitting it to an appropriate processing program. 

We can work with qualifying: 

• CBD retailers 

• CBD e-commerce businesses 

• Hemp retailers 

• Smoke and vape shops selling compliant CBD products 

• Health and wellness businesses 

• Supplement retailers carrying qualifying hemp-derived products 

• Retail stores where CBD represents only part of the product mix 

• Online CBD merchants 

• Multi-location CBD retailers 

Approval is not guaranteed. Your products and business must meet applicable bank, card-brand, state and federal requirements. 

What CBD Merchants Should Do Now That Square Is Dropping CBD Merchants 

Square Is Dropping CBD Merchants, so if Square has given your business a November termination date, don't wait until late October to begin looking for another processor. 

CBD underwriting can require considerably more documentation than a normal retail merchant account. 

Start preparing now. 

1. Gather Your COAs

Have current Certificates of Analysis available for the CBD and hemp products you sell. 

The laboratory reports should clearly identify the cannabinoid content of each applicable product. 

With the federal rules changing, knowing exactly what is contained in the products you sell is more important than ever. 

2. Review Your Entire Product Catalog

Don't assume that every product labeled "hemp" or "CBD" will meet the new federal definition. 

Pay particular attention to products containing or marketed around: 

• Delta-8 THC 

• Delta-9 THC 

• Delta-10 THC 

• THCA 

• HHC 

• THC-O 

• Intoxicating hemp-derived cannabinoids 

• Synthetic or converted cannabinoids 

• Full-spectrum products containing measurable THC 

Public Law 119-37 specifically addresses total THC, synthetic or manufactured cannabinoids and final hemp-derived cannabinoid products. (Congress.gov) 

3. Review Your Website

CBD underwriting doesn't stop at your products. 

Banks and processors may review your entire website. 

Make sure it clearly contains: 

• Business name 

• Physical business address 

• Customer-service contact information 

• Privacy Policy 

• Terms and Conditions 

• Shipping Policy 

• Return and Refund Policy 

• Cancellation Policy where applicable 

• Complete product descriptions 

• Accurate product labeling 

• Required disclaimers 

• COAs or links to testing information where appropriate 

• Age restrictions where required 

Avoid unsupported health or medical claims. 

Saying that a CBD product diagnoses, treats, cures or prevents a disease can create regulatory issues beyond payment processing. 

4. Don't Hide CBD Products From Your Processor

This is extremely important. 

Do not apply for a conventional merchant account and then quietly begin processing CBD transactions. 

That can result in: 

• Account termination 

• Funding holds 

• Reserves 

• Chargeback exposure 

• MATCH reporting in serious circumstances 

• Difficulty obtaining processing elsewhere 

Your acquiring bank and processor should know what your business sells. 

Nationwide Payment Systems believes merchants are much better protected when they are boarded into the correct merchant category and underwriting program from the beginning. 

5. Start Your Replacement Processing Account Before Square Shuts You Down

If your Square termination date is November 5, don't make November 4 the day you begin applying for another account. 

CBD merchant underwriting can involve: 

• Ownership verification 

• Processing statements 

• Banking information 

• Product review 

• COAs 

• Website review 

• Fulfillment information 

• Refund policies 

• Business licenses 

• Supplier information 

• State-specific requirements 

Give yourself time to address an underwriting question without interrupting your ability to accept payments. 

What Happens to CBD Businesses After November 12, 2026? 

The CBD and hemp industry is entering a significant regulatory transition. 

Public Law 119-37 becomes effective November 12, 2026, and changes the federal definition of hemp. (Congress.gov) 

Businesses should expect processors, acquiring banks, card brands, compliance companies and underwriters to scrutinize CBD and hemp-derived products more closely. 

The industry is therefore likely to split into two broad groups: 

Compliant products and businesses that can continue qualifying for appropriate payment-processing programs 

and 

products that no longer satisfy applicable federal, state, bank or card-network requirements. 

Simply having the letters "CBD" on a product should not be the only determination. 

The actual formulation, cannabinoid content, COA, product claims, state of sale and applicable regulations matter. 

Square Is Dropping CBD Merchants: Nationwide Payment Systems Can Review Your Business 

If you've spent years building a CBD business, a processor's decision to exit the industry doesn't mean you should wake up one morning unable to accept a credit card. 

Nationwide Payment Systems has more than two decades of experience working with businesses in regulated and higher-risk industries. 

We are currently accepting applications from compliant CBD and hemp merchants looking for alternatives to Square. 

Our team can review: 

• Your Square termination notice 

• Current merchant statements 

• Website 

• Product catalog 

• COAs 

• Processing volume 

• Average ticket 

• Chargeback history 

• Retail and e-commerce requirements 

We can then determine which payment-processing options may be available for your business. 

Received a CBD Termination Letter From Square? 

Square Is Dropping CBD Merchants—contact Nationwide Payment Systems now, before your existing processing is discontinued. 

Our team can review your business and determine whether you qualify for one of our CBD merchant-account programs. 

Call Nationwide Payment Systems or request a CBD merchant account review today.

About Nationwide Payment Systems 

Nationwide Payment Systems has been helping businesses accept payments for more than 25 years. We work with traditional businesses as well as complex, regulated and higher-risk industries that often require specialized underwriting. 

Instead of relying entirely on automated approval systems, our team works directly with merchants to understand what they sell, how they sell it and what payment technology they need. 

For CBD and hemp businesses affected by Square's changing policy, Nationwide Payment Systems can provide a compliance and underwriting review and determine which merchant-account programs may be available. 

Square doesn't want your CBD business. Talk to a payment company that understands it. 

Apply for CBD Payment Processing 

Contact Nationwide Payment Systems today to have your CBD or hemp business reviewed before your current merchant account is terminated. 

Important Disclaimer 

Nationwide Payment Systems is a payment-processing company and is not a law firm. Nothing in this article constitutes legal advice. Hemp and CBD laws and regulations are evolving rapidly and may differ by federal, state and local jurisdiction. Merchants should consult qualified legal counsel regarding the legality of particular products. Merchant-account approval and continued processing are subject to underwriting, acquiring-bank requirements, card-network rules, applicable laws and ongoing compliance. 

** “All CBD remains legal.” The federal law's 0.4 mg per-container provision is potentially brutal for many full-spectrum CBD products, even products with tiny THC percentages. (Congress.gov) 

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