What Is Square’s Policy for Cannabis & CBD?

By Eric Ives
June 19, 2020

Although Roger Adams isolated CBD in the early 1940s, the cannabinoid didn’t become big business until recently. There was some…

Although Roger Adams isolated CBD in the early 1940s, the cannabinoid didn’t become big business until recently. There was some research into it in the last few decades, but nothing major. However, now that it is legal to grow industrial hemp in the United States, sales of cannabidiol are expected to skyrocket. In the Internet age, it is easier than ever to sell products online. Yet confusion over the industry means merchants are wondering if they can use services such as Square for CBD sales.

Can You Sell CBD Online in the U.S.?

Before we look into whether you can use Square for CBD processing, let’s look at the state of online cannabidiol sales in the United States. Already, it is a multi-billion-dollar industry. Sellers offer a huge variety of CBD products, including: 

  • Sprays
  • Topical Balms
  • Capsules
  • Supplements
  • Oils 

Unfortunately, it is also an unregulated industry, and one riddled with misinformation. One of the most damaging examples is the suggestion that ‘CBD is legal to sell in all 50 states.’ Once an online seller hears this phrase, they automatically assume it is possible to ship CBD products throughout the United States. 

This is not strictly true. Much of the information stems from a misinterpretation of the 2018 Farm Bill. It legalized the growth of industrial hemp with a THC content of up to 0.3%. It did not legalize CBD or any other cannabinoid. The reality is this: The FDA hasn’t approved any CBD product, barring a GW Pharmaceutical offering called Epidiolex. It is often recommended to help patients with epilepsy manage their seizures.

The lack of federal oversight means that like marijuana rules, states are free to do what they like. Unlike cannabis laws, few states are clear on whether CBD is legal or not. There are a handful of states that seem to stand against cannabidiol, but most of them fail to provide clarity. Top CBD brands such as PureKana officially say they don’t ship to certain states. Services like Shopify also clearly outline a few places they do not support in terms of CBD sales. 

What we want to know is whether Square CBD sales are possible. Does this particular merchant services aggregator permit the sale of cannabidiol? Let’s find out.  

The Advantages of Using Square

The good news is that this financial services company does enable you to sell cannabidiol. Indeed, there is a special Square CBD guide where the organization outlines how you can use it to sell your products. Regardless of how you go about your Square CBD sales process, it has a payment solution. You can do the following:

  • Take Payments Online: Use your website or set up a free online store with Square to sell CBD.
  • Take In-Person Payments: It is possible to accept card payments on the move or at your store.
  • Receive App Payments: You can even integrate Square payments into your mobile app!

The company had launched a small invite-only pilot program to offer services to CBD sellers in March 2019. It went so well that Square decided to implement a broader rollout. The move came after years of Square refusing to work with CBD companies. All CBD products sold on the platform must come from hemp and contain no more than 0.3% THC. Please note that Idaho and South Dakota are, at present, excluded from the Square program. 

Ultimately, Square provides merchants with everything they need to manage their CBD business. This includes helping with payments, payroll, hardware, and inventory management. The entire process works seamlessly to provide a total overview of your whole company. 

Those who have used Square for CBD processing are full of praise for the service. They say that they get better rates and are treated with trust and respect. They also: 

  • Get to eliminate the middleman, and can sign up in 15 minutes.
  • Have a flat fee option.
  • Have the option to view analytics to help future sales.
  • Benefit from fast payment processing.

Square CBD Processing Fees

Square tries to make its CBD-related fees as straightforward as possible. CBD sellers still miss out compared to other vendors who pay 2.6% and $0.10 per transaction. However, the costs are still competitive. You pay less if you have in-person payments compared to online, app, and key-in sales. Here’s a quick look. 

  • In-Person: 3.9% + $0.10 per tap, dip, or swipe.
  • Online and In-App: 4.2% + $0.30 per transaction.
  • Keyed-In and Card on File: 4.8% + $0.15 per transaction.

There is no question that the transaction fees are relatively high. A $100 online sale would result in charges of $4.50, for example. Nonetheless, sellers are happy to take the hit for the opportunity to make CBD sales on Square. At least there is only one rate per card, so you won’t receive any unpleasant surprises. Until the financial sector fully welcomes cannabidiol, merchants will need to take what they can get.


While Square CBD processing isn’t exactly cheap in terms of fees, it opens a valuable avenue for vendors. If nothing else, the company’s rates are transparent, and they don’t try to sneak in statement, monthly, start-up, or refund fees. Once you sign up, you know what you have to pay. You can get set up extremely quickly, and begin growing your CBD empire! Square is a reliable option if you want to gain a foothold in the industry without needing to negotiate a slew of complexities. 

Once you use Square, you have the chance to use its impressive array of services. These include payroll and inventory management. If you elect to use Square to sell CBD, make sure it comes from hemp and contains no more than 0.3% THC. We also recommend checking to see if you are legally allowed to sell to the areas where your target audience mainly resides. Contrary to what you hear or read; CBD isn’t necessarily easy to ship to all 50 states. 

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