Payment processing platform Square has notified its merchant clients that it will no longer process sales for CBD and hemp-derived products, both in-person and online. The decision stems directly from upcoming federal legal changes that significantly tighten restrictions on hemp-derived cannabinoids, forcing financial institutions to re-evaluate their compliance policies.
Under the new policy, merchants using Square must remove all CBD and hemp-derived items from their physical and online catalogs by October 15, 2026. While impacted accounts will remain active for non-CBD transactions, payment processing for any prohibited hemp items will cease entirely after the deadline. Square explicitly cited the shifting federal legal landscape as the driver for the change, specifically pointing to upcoming federal provisions that redefine compliant hemp and enforce a strict cap of 0.4 milligrams of total THC per container starting November 12, 2026.
This corporate policy shift reflects the broader fallout of recent federal legislation. While hemp-derived cannabinoids previously enjoyed wide availability under the 2018 Farm Bill’s 0.3% Delta-9 THC threshold, the new federal total-THC limits effectively criminalize the majority of existing consumer CBD and hemp products on the market. Although lawmakers in Congress continue to debate potential extensions or modifications to these rules, major payment processors like Square are choosing to act preemptively to ensure compliance ahead of the federal deadline.
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