CBD Account Shut Down by Square? What to Do Next

On August 7, 2026, Square emailed sellers with the subject "[Action required] Important update about your Square account and CBD products." Citing the upcoming federal change to the definition of hemp, it said:

"Because of this change, selling CBD and hemp-derived products — online or in person — will no longer be permitted on Square's platform."

The notice, as published by Marijuana Moment on August 7, sets these terms:

• By October 15, 2026: remove any CBD, hemp and hemp-derived items from your Square catalog, both in-person and online. After that date, those items are no longer permitted.
• In-person sales are included. Selling CBD at your counter on a Square reader is covered too.
• Mixed shops can stay. Square says your account stays open for your non-CBD products "to the extent permitted under Square's policies."
• November 5, 2026 (reported): one payments provider reports that Square will close accounts that still sell CBD at 11:59 p.m. ET that day. We haven't seen that date in Square's own words, so treat October 15 as your real deadline.

Square's CBD industry page now redirects to its home page (checked September 27, 2026). Before October 15, you still have a few weeks to set up a replacement while Square keeps working.

Many sellers try Stripe or PayPal next. Each platform has its own rule, and a lot of what's written online is out of date. Here's what each one says, with the date of its source:

So does Stripe allow CBD? Not freely, but it doesn't ban it outright either, despite what many pages say. Low-THC CBD needs Stripe's approval before you sell, and CBD edibles are prohibited. The phrase "per local limits" matters: the federal limits themselves change on December 11, 2026 (more on that below).

Signing up for these apps takes minutes because nobody reviews your products first. The review comes later, and it can end the account. See why Stripe and Square close accounts. If you sell on Shopify, our guide to accepting cards on an online CBD store covers the options by cart.

Do these first. Dashboard access can be limited after a closure, so start with your data.

1. Download everything: transaction history, payout reports, open disputes, invoices, and customer and item lists.
2. Save your subscription and customer records. Export what Square lets you take: customer names, emails, plan details and billing dates. Ask Square in writing whether it will transfer saved card data to another PCI-compliant processor. Don't copy card numbers yourself.
3. Get the money details in writing. Ask for the date of your final settlement, the amount of any held funds or reserve, and the date those funds will be released.
4. Save the notice and any closure email. Your next underwriter will want to see them.
5. Tell customers with open orders or subscriptions what's changing and when. A customer who hears from you first is much less likely to file a chargeback.
6. Keep answering disputes. Chargebacks can arrive for months, and they come out of any held balance.

Your money doesn't disappear when a platform drops CBD, but some may arrive late. Platforms hold funds after a closure to cover refunds and chargebacks they can't collect from you. What the agreements say, as of September 2026:

• Square may delay payouts or require a reserve, with no fixed number of days in its Payment Terms (updated July 30, 2026).
• Stripe may hold a reserve to cover your liabilities, with no fixed hold period in its services agreement.
• PayPal may hold a balance "for up to 180 days" when it's reasonably needed to protect against liability (User Agreement, updated September 14, 2026).

For Square and Stripe, the only reliable release date is the one they give you in writing. Our guide to frozen funds after a Stripe, Square or PayPal shutdown covers how to push for release and when to escalate.

Document the amount held, the promised release date, every email and ticket number, and an itemized statement of deductions when the money comes back.

Reserves on your next account. A CBD-approved merchant account may also hold back part of your sales for a while. Quotes published by CBD processors in 2026 commonly describe reserves of about 5% to 20% of sales, held 90 to 180 days. That's a market range, not a rule. Get any reserve in writing before you sign. For the mechanics, see how rolling reserves work.

Square's exit is a platform decision. But CBD accounts also close for reasons that follow you to your next processor if you don't fix them:

• Products outside your approval. A few delta-8, THCA or hemp flower SKUs in a CBD catalog can end an account, even when most sales are CBD oil.
• Health claims. Words like "treats", "cures" or "relieves" on product pages or ads. The FDA doesn't allow disease claims for CBD, and underwriters check websites for them.
• Disputes. Subscription and free-trial offers drive a lot of CBD chargebacks. Visa's monitoring program counts fraud reports plus disputes against settled card-not-present sales; since April 1, 2026, a US merchant at 1.5% or more, with at least 1,500 fraud reports and disputes in a month, is "excessive". Our guide to CBD chargebacks covers prevention.
• The federal hemp change. Enacted law is scheduled to exclude cannabinoids the plant can't produce naturally from "hemp" on November 12, 2026, then, on December 11, 2026, to exclude cannabinoids converted outside the plant (such as delta-8 made from CBD) and move to a total-THC test with a 0.4 mg total THC per container cap. Both dates are pending, and bills to delay them are in committee as of September 2026. A product that no longer meets the federal definition of hemp at the time of sale is a problem for any processor. See the 2026 hemp law change for what it means product by product.

Could a shutdown put you on MATCH? MATCH is Mastercard's list of businesses that banks have terminated for serious reasons such as fraud, excessive chargebacks or processing for others. A closure only because Square stopped allowing CBD doesn't fit most of those reasons, but the bank behind the platform decides. Ask in writing whether you were reported, and under which reason code. Our guide to how the MATCH list works explains the codes and your rights.

The goal: have the new account live before the old one stops.

1. Apply now, not after October 15. A CBD application needs more documents than a Square signup. Ask each provider how long its CBD review takes.
2. Disclose everything. List every product, and explain the Square notice in a sentence or two. Surprises found later are what end accounts.
3. Keep Square running for your non-CBD items if you have any, and stop CBD sales there by October 15.
4. Set up and test the new checkout. Connect the gateway to your website or cart, run a small live sale, then a refund. Authorize.Net, for example, is a gateway that works with the merchant account behind it and connects to more than 1,000 shopping carts.
5. Move subscriptions carefully. Ask your new provider whether it can import saved cards from Square, and whether your account supports recurring billing for your products. If cards can't be moved, email subscribers a link to re-enter their card before their next billing date.
6. Tell customers the new name on their card statement. An unfamiliar billing descriptor causes "I don't recognize this" disputes.
7. Close out Square in writing once the new account is live, and keep watching for final payouts and disputes.

Before you sign, ask for pricing in writing. START's pricing model is interchange-plus: the card network's cost plus a fixed markup, shown line by line, with no termination, annual or address-verification fees. How interchange-plus pricing works explains what to look for.

A CBD-approved merchant account is one a bank approves knowing you sell CBD. That review is what makes it last. Expect to provide:

• A full product list with SKUs, and your supplier or manufacturer details
• A current COA for each product or batch. A COA (certificate of analysis) is a lab report showing what's in the product. Underwriters look for a third-party lab, a batch number and a full cannabinoid profile. After December 11, 2026, expect questions about total THC and mg per container.
• A website with no health claims, plus clear refund, shipping, privacy and subscription terms
• Business basics: formation documents and EIN, owner ID, a voided check or bank letter, and recent bank statements
• Your processing history: three to six months of Square statements and the Square notice

The full checklist, with fixes for common declines, is in our guide to CBD merchant account requirements. To see which products fit, check what we accept on our CBD merchant account page.