Square CBD Program Shutdown: Dates, Funds and What to Do Next
A dated action plan for sellers Square is removing from its CBD program: what to export, how payouts and Square Loans are handled, and how to apply for a merchant account of your own.
- By the OpenGate underwriting desk
- Updated
- 12 min read
Square is winding down the Square CBD program, the approval track that let US sellers accept cards for hemp-derived CBD. In notices sent in August 2026 it said CBD and hemp-derived products will no longer be permitted on its platform. Mixed catalogs had until October 15, 2026 to remove them, and hemp-focused accounts were given November 5, 2026 as a closing date. This guide gives the sequence to follow and the file your next underwriter expects.
In this guide
What Square announced and the dates that matter
Square announced a full exit from the category, with two deadlines that depend on your catalog. The notice, published in full by Marijuana Moment on August 7, 2026, says CBD and hemp-derived products “will no longer be permitted on Square’s platform”, online or in person. It gives the federal hemp law as the reason and draws no line by THC content. A seller whose account is already closed should read Square deactivated my account for the first 48 hours.
Know where the dates come from, because Square has not published them. As of October 9, 2026 we found no Square help or legal page that states either one.
- October 15 is in the notice to mixed-catalog sellers that Marijuana Moment, a cannabis trade publication, obtained and printed.
- November 5 is in a second version of the notice, sent to businesses that mostly sell hemp. A hemp retailer that received it published the text in August 2026.
- Square’s own public statements are thinner: a reply from its team on the seller forum, dated August 21, 2026, which says the company is winding down its CBD Program, and a support page on loan eligibility.
Your own notice is the document that counts.
| Date | What happens | Who it concerns |
|---|---|---|
| August 7, 2026 | Marijuana Moment publishes Square’s notice | Sellers enrolled for CBD |
| October 15, 2026 | Deadline to remove CBD, hemp and hemp-derived items from the catalog, in person and online | Mixed catalogs, which keep the account for other products |
| November 5, 2026, 11:59 pm EST | Account closure | Catalogs that are mostly CBD or hemp, per the notice a recipient published |
| November 12, 2026 | First federal date, as the law stood in October 2026: cannabinoids the plant cannot produce leave the definition of hemp | Every hemp seller |
| December 11, 2026 | Second federal date, as the law stood in October 2026: total THC test and 0.4 mg per container cap | Every hemp seller |
What each federal date covers, and what Congress could still change, is explained in the federal hemp ban guide.
The program was a United States arrangement. Square’s UK site, for one, lists CBD among the regulated products it does not accept.
Does the federal delay change Square’s dates?
As of October 9, 2026, no. Congress moved most of the hemp redefinition from November 12 to December 11, 2026 after Square had sent its notices, and Square had announced no new dates by then. The forum reply from Square’s team still cites November 12. Sellers asked in the same thread whether the delay changes anything; the question was unanswered when we checked.
Asked by Marijuana Moment in August 2026 whether Square would revisit the policy if the law were delayed or reversed, a spokesperson said the company had nothing specific to share. Treat the date in your notice as fixed. A processor that has written a category out of its policy rarely writes it back in on the legislature’s timetable.
What happens to your funds, your data and your Square Loan
Your balance should pay out normally, your data stays exportable only while you can log in, and a Square Loan gets a new repayment arrangement.
Funds
Square’s Payment Terms, last updated July 30, 2026, say that when an account is closed Square cancels pending transactions and pays out the funds it holds, less fees, on your payout schedule, unless an investigation is pending. Three other clauses matter during a wind-down:
- Square may defer payouts or restrict access to funds while it investigates or resolves a dispute.
- Square may require a reserve when it considers a business risky, and the clause names no fixed release period.
- A lost chargeback stays yours to pay, with its fees, and the terms let Square debit your linked bank account to recover it.
Cardholders can dispute a purchase for months after the sale, commonly up to 120 days under card scheme rules. The last orders you run through Square can therefore come back after the account is gone. As an illustration, $45,000 of card sales in your final 60 days at a 0.5% dispute rate means about $225 of disputed sales. The figure stays small unless subscription customers are charged for products you can no longer ship, so cancel those rebills first.
Data
Export while the account is active. The notice sent to hemp-focused sellers tells them to download the customer list, the reports and the catalog, and to manage their Form 1099-K. Add what an underwriter will ask for:
- monthly sales totals for the last six months, split between in-person and online;
- dispute and refund reports for the same months;
- payout reports that tie sales to bank deposits;
- the item library with every CBD SKU and its price;
- subscription and card-on-file records, if you bill on a schedule.
Card numbers stored with Square do not come out in a spreadsheet. Ask Square in writing whether it will transfer card-on-file data to your next PCI DSS compliant provider, and plan for customers to re-enter their cards if it will not.
Square Loans
The notice sent to hemp-focused sellers says the loan balance and terms stay unchanged and that Square will work out an alternative repayment arrangement, such as a payment plan, because repayment normally comes from daily card sales. Square’s loan eligibility page adds that, as of August 2026, businesses that sell CBD are not eligible for new Square loans, and it gives the change in federal law as the reason. A percentage of sales becomes a fixed installment at the moment your Square sales stop. Model that payment against the weeks when you may have no card acceptance.
How to move off the Square CBD program, step by step
Work through these steps in order, starting three weeks before the date in your notice. If that date has already passed, begin at step 2 with whatever Square still lets you download, then go straight to step 5.
- Read your notice and write down the date and the version: remove items and stay, or close.
- Export everything listed above. You should end with a folder holding six months of history that does not depend on a login.
- Check each SKU against the amended federal definition. Compute total THC per container and sort products into keep, reformulate and drop. A new processor will not board what the law excludes.
- Decide what stays on Square. Candles, apparel or services can remain; the CBD line needs its own processing.
- Apply for a merchant account with a processor whose acquirer underwrites hemp, and send the complete file at once.
- Connect and test before the old rail goes dark: a live order, a refund, a rebill if you run subscriptions, and a payout to your bank.
- Tell customers. Subscribers get a dated message naming the new billing descriptor, so the first charge under a new name is recognized.
- After closing, watch the Square dispute inbox and the linked bank account for at least four months.
The timeline below is a realistic plan for a complete file. It is a plan, and no underwriter can promise it.
| Days before your closing date | What should be done |
|---|---|
| 21 | Data exported, SKUs triaged, application sent |
| 14 | Written offer received, contract signed, identity checks under way |
| 7 | Integration and test transactions |
| 0 | Square stops and the new account is already taking orders |
If you are already inside that window, send the file anyway and prepare customers for a short gap. The general closure sequence, including what to ask a processor in writing, is in the guide to a closed Stripe or PayPal account.
What a high-risk underwriter asks a former Square seller
More than the program asked, because you are opening a merchant account of your own. Square is a payment facilitator: its sellers process under Square’s master account, which is how one policy update can switch off a whole category. A dedicated account is underwritten on your file, and the acquirer answers to the card schemes for what you sell.
Expect a deeper review on six points:
- Products. A certificate of analysis for each SKU, with total THC in milligrams per container, the measure the amended federal definition uses.
- Supply. Who manufactures the products, and whether each cannabinoid was extracted from the plant or made by conversion.
- Website. Every product page, the claims on it, the age gate, the refund and shipping terms.
- Channel split. How much of your Square volume was in person and how much online. Online volume carries more disputes, and the acquirer sizes the reserve on it.
- History. Monthly volume, average ticket, refunds and disputes from your exports. Without a dispute report, count disputes against transactions month by month.
- The notice. It shows the account ended because Square left the category, which reads very differently from a closure for your conduct.
CBD accounts typically carry a rolling reserve, written into the offer before you sign. The arithmetic is in the rolling reserve guide.
One limit to state plainly. OpenGate is a gateway for online and remote payments: checkout on your site, a hosted payment page, payment links, and a virtual terminal for phone orders. If most of your Square volume came from a card reader on a shop counter, you need a card-present provider for that part, and we will tell you so.
If the application stalls
Three causes explain most delays with former Square sellers.
- Lab reports that do not match the live catalog, or that give percent by weight with no figure per container.
- Products the amended definition excludes that are still for sale on the site.
- A business bank account at an institution that closes hemp businesses once it notices them. Confirm in writing that your bank accepts hemp proceeds.
What not to do
- Do not rename CBD items in your Square catalog to keep selling them. Square monitors activity under its terms, and mislabeling turns a policy exit into a violation on your record.
- Do not open a second Square account for the same products.
- Do not assume another mainstream platform reads CBD differently. Stripe’s CBD policy treats low-THC CBD as a restricted business that needs approval and lists other CBD products as prohibited. Under the Shopify CBD rules the store is allowed and Shopify Payments is not, so you still need a third-party gateway.
- Do not take the store offline. Remove the products the law excludes and leave the rest live: an underwriter approves what it can read, and an empty domain shows nothing.
- Do not wait for Congress. A delay moves the statute and leaves your notice where it is.
A policy exit of this kind does not normally create a MATCH listing. The MATCH guide explains when listings happen and how to check.
What to send before your closing date
Send one complete package: the Square notice, your exports, the SKU list with lab reports, your company and ownership documents, and the address of the live store. How the vertical is underwritten is laid out on our CBD and hemp page and in the CBD payment processing guide.
When the package is ready, apply for CBD processing. A person reads the file, and you hear back within 1 business day with terms in writing, the list of gaps, or a refusal and its reason. There is no fee to apply, and the decision to sign comes after you have read the offer.