💡 Key Takeaways:
- Square has strict policies on CBD sales, limiting some businesses from using their payment processing.
- Square charges higher fees for CBD transactions than standard transactions
- Some CBD businesses face service disruptions or shutdowns due to Square’s CBD restrictions
- KORONA POS lets CBD businesses choose their payment processor, meaning they can operate without worrying about sudden shutdowns or high fees
Many CBD businesses turn to Square POS for its user-friendly interface and easy-to-use hardware. Still, Square’s CBD-related policies and fees can make processing payments tricky (or even impossible) for businesses in this high-risk industry.
This post will explore Square’s CBD program and discuss why it may not be the best fit for CBD businesses. We will also cover alternative solutions that support and facilitate CBD sales, such as KORONA POS.
Does Square Allow CBD Sales in 2025?
Yes, Square allows CBD through their aptly named Square CBD program, which enables retailers in most states to sell hemp and hemp-derived CBD products with less than or equal to 0.3% THC.
While Square has updated its policy to support CBD-related businesses, it still requires companies to meet legal compliance for sales and charges higher processing fees for CBD products. If you sell CBD products, you may find that alternatives like KORONA POS offer more flexibility.
What is Square’s Policy on CBD?
CBD retailers using Square can sell hemp and hemp-derived products with less than or equal to 0.3% THC in most US states. Retailers must produce and sell products in compliance with applicable laws, such as the most recent Farm Bill and state laws.
Hemp flower is permitted only with lab certification confirming the THC level and ingredients. Square users cannot sell marijuana, marijuana-derived products, products that contain more than 0.3% THC, or paraphernalia such as pipes or bongs.
Square users cannot process payments shipped to countries where CBD is illegal, such as China, Iceland, Russia, or India.
Square CBD Requirements for Payment Processing
CBD payment processing looks different with every POS system and processor. Unlike KORONA POS, Square has an integrated payment gateway with strict regulations around CBD sales. Here’s what Square requires from retailers selling CBD:
✅ Apply for the Square CBD Program
You cannot simply sign up for Square and then begin selling CBD. You must apply for Square’s CBD program if you sell CBD products, including oil, flower, seeds, lotion, topicals, or wax.
Once you apply, Square will begin reviewing your application and requesting relevant documentation, such as information about your business, bank statements, and item descriptions.
✅ Legal Compliance
To successfully process payments using Square, CBD retailers must comply with all local, state, and federal regulations regarding the production and sale of CBD products. This includes providing documentation such as licenses and certificates of analysis for each product sold.
✅ CBD Products You Can and Can’t Sell On Square
Square allows for the sale of hemp-derived CBD products with less than or equal to 0.3% THC. Products not FDA-approved or containing more than 0.3% cannot be sold using Square.
Additionally, retailers using Square cannot sell any products containing synthetic-derived cannabinoids, including hexahydrocannabinol (HHC) and tetrahydrocannabinol-o-acetate (THC-O).
✅ Website Compliance
Square doesn’t allow any claims that your CBD products may cure, treat, or aid conditions such as anxiety, inflammation, depression, PTSD, ADHD, cancer, or other health conditions.
Retailers must ensure their website does not contain restricted information, as per the FDA regulation of cannabis and CBD, or Square will withhold your funds.
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Square CBD Fees and Charges
Square’s pricing does not include startup fees, statement fees, monthly fees, PCI compliance fees, business card fees, or hardware leasing fees. Still, Square’s processing fees are higher for CBD products than for standard products.
Square cbd program rates:
- Online – 3.8% + 30¢ per transaction
- In Person – 3.5% + 10¢ per tap, dip, or swipe
- Keyed in and Card on File – 4.4% + 15¢ per transaction
Rates are subject to change as Square’s CBD program is still in beta testing.
These fees can add up quickly for businesses with a large sales volume. In comparison, KORONA POS lets CBD businesses choose their payment processor, meaning competitive, transparent pricing and no surprise account freezes.
Benefits of Using Square for CBD Sales
The Square CBD program isn’t all bad. After all, users in compliance get all the benefits of Square POS, a system widely celebrated for its user-friendliness and affordability.
Here are some perks of using Square for CBD sales:
✅ Benefit #1: Integrations
- Square offers everything necessary to manage your CBD business, including payments, hardware, payroll, and inventory management. CBD retailers can benefit from Square’s integrated ecosystem for a complete view of their business.
✅ Benefit #2: User-friendly interface
- Square has undoubtedly created a user-friendly interface. Even first-time CBD business owners can quickly learn the software’s features, and that’s certainly a perk.
✅ Benefit #3: Security Features
- Square uses multiple security features to protect customer and business data, such as encryption at the moment of swipe, two-factor authentication, and PCI compliance. It’s a vetted and trustworthy POS system for all kinds of businesses, including CBD-selling ones.
Issues and Challenges with Square’s CBD Payment Processing
Square is notoriously tricky for CBD retailers, which is why many are looking to make a switch to a more CBD-friendly POS or payment processing solution. Here’s what these retailers struggle with when using Square for their CBD sales:
❌ Challenge #1: High Fees
- Square’s fees are steep, especially when processing high-risk CBD transactions. Compared to processors built for high-risk industries, like Paybiotic, Square’s fees appear astronomical.
❌ Challenge #2: Restricted Product Sales
- With Square’s CBD program, you can only sell highly specific types of CBD products. For example, Square does not allow the sale of CBD-infused beverages, topicals, or products with THC content—even if they meet legal requirements.
- This restriction can be a considerable disadvantage for businesses that offer a broader range of CBD products (or who want to).
❌ Challenge #3: Account Holds and Freezes
- One of the most disruptive challenges associated with the Square CBD program is its tendency to put account holds or freezes on CBD businesses’ ability to accept payments—all without warning.
- Businesses have complained that Square POS has held tens of thousands of dollars due to sometimes inaccurate or irrelevant concerns over their legal compliance with company and federal CBD policy.
❌ Challenge #4: Square’s Customer Service
- Square’s customer service has been critiqued for its lack of responsiveness, especially when dealing with high-risk industries like CBD.
- When accounts are suspended or frozen, which can happen unexpectedly, CBD companies often find themselves unable to reach a representative or are left on hold for long periods.
Can You Accept CBD Payments Without Square?
If you use Square POS, you’re locked into Square’s integrated payment processing, which means you’re subject to Square’s strict CBD regulations and high processing fees. If you’d like to switch to a more CBD-friendly payment processor, you will need to transition your point of sale (POS) system, too.
By switching to a processor-agnostic solution, like KORONA POS, you can choose the payment processor that suits your budgets and needs without worrying about sudden shutdowns or freezes.
KORONA simplifies the switching process by handling the entire migration from beginning to end. You won’t have to worry about a thing!
Get started with KORONA POS today!
Explore all the features that KORONA POS has to offer with an unlimited trial. There’s no commitment or credit card required.
5 Best Alternatives to Square for CBD Payment Processing
1. KORONA POS
- It lets you choose your payment processor
- Highly customizable and industry-specific
- Advanced inventory management tailored to CBD businesses
- KORONA POS pricing starts at just $59/month and increases with added features and packages.
- KORONA POS integrates with various payment providers, offering CBD retailers the ultimate flexibility of choice.
- KORONA POS is a highly customizable tool with complex features, meaning it may require more initial setup or training for basic use than Square.
- KORONA POS is ideal for CBD and other high-risk businesses, such as dispensaries, that need a reliable, all-in-one payment processing, inventory management, and customer relationship management (CRM) system.
KORONA POS is very user-friendly. You can customize the interface to conform to your business needs. Their customer service is in the United States, always accessible, and always awesome. We love that we can use it to help our business scale.
-Darlene P.
2. Lightspeed Retail
- Lightspeed integrates with various e-commerce platforms, making CBD sales easy for businesses that sell both online and in-store
- The software offers detailed analytics and reports to track inventory, customer behavior, and sales.
- Lightspeed has a highly customizable user interface
- Pricing starts at $69/month for the basic plan. Custom pricing is available for advanced features or multi-location businesses.
Lightspeed offers powerful features for managing multiple stores all from one place.
Due to its many advanced features, new users often find Lightspeed’s system overwhelming.
- Most Capterra customers appreciate Lightspeed’s flexibility and detailed reports, while others point out the steep learning curve.
Multi-location CBD retailers
3. Flowhub POS
- Explicitly designed for cannabis retailers
- Keeps users compliant with state and local regulations
- Secure and quick payment processing (although it does not accept credit card payments)
- Custom pricing based on business size, number of locations, and features needed. Typically, basic plans start around $99/month per location.
- Flowhub is built specifically for the cannabis and CBD market, so it works for you to ensure compliance and payment processing are as easy as possible.
- Flowhub doesn’t accept credit cards, so if you’re only selling CBD products below 0.3% THC, you might be better off with Square.
Customers appreciate Flowhub’s industry-specific focus, especially its compliance features. However, some users mention that the price is a barrier for small businesses.
CBD retailers with multiple locations that also sell cannabis and that need a specialized POS solution with compliance tracking.
4. Cova POS
- Cova is explicitly tailored for cannabis retailers and CBD businesses, offering specialized, industry-specific tools.
- Supports the management of multiple retail locations
- Real-time inventory updates and continuous syncing between physical and digital stores
- Custom pricing based on the number of locations and business requirements. Expect to pay between $100 and $200/month per location.
- Cova POS is purpose-built for the cannabis and CBD space, so you won’t deal with the random lockouts or harsh regulations that you would with the Square CBD program.
- Cova has fewer payment processing options than competitors like KORONA POS, which can restrict flexibility.
- Users appreciate its industry-specific features, but some mention that it may not be as cost-effective for smaller operations.
Cannabis and CBD retailers needing specialized features for compliance and inventory management.
5. Quantic POS
- Quantic offers a high degree of customization to meet the specific needs of CBD retailers
- CBD-store-specific features, such as tools to manage age and local law compliance
- Starts at $79/month with scalable pricing based on business needs and add-ons
The highly adaptable platform allows businesses to tailor their workflows and reports.
- Quantic is less focused on regulatory requirements than, say, Flowhub, so it may not be the best solution for CBD retailers looking to sell cannabis.
- Quantic POS reviews highlight its intuitive interface, reliable transaction tracking, and specialized features that help CBD retailers stay compliant with local regulations.
- CBD retailers looking for a user-friendly, compliant, and secure point-of-sale system tailored to the unique needs of the industry.
Learn more about how credit card processing works and save your business money with this free eGuide.
Choose the Right Payment System for Your CBD Business
Choosing the right payment processor is crucial for the success of your CBD business.
If you’re looking for flexibility, KORONA POS offers processor-agnostic solutions for high-risk industries. With no surprise freezes or restrictive policies, KORONA can provide the freedom and security your CBD business needs to grow.
If you’re ready to switch from Square POS, explore our pricing and find the plan that best suits your needs.
Speak with a product specialist to learn exactly what you need and how we can help.
