Square Opens Platform to CBD Sellers
Popular payments firm Square, Inc. has opened up its platform to U.S. companies making CBD products, the San Francisco-based company announced Thursday.
In a blog post, Square said its new early-access program “allows businesses in the U.S. to sell CBD products on Square quickly, easily, and securely.”
“We believe everyone should be able to participate and thrive in the economy,” it wrote in the blog.
The company pointed to the 2018 Farm Bill passage as a driving force to begin working with CBD merchants, and the October launch builds on a beta test of the service that was offered to select companies in May. Square had previously refused to work with CBD companies in any capacity.
Last December, President Donald Trump signed the 2018 Farm Bill into law, a move that decriminalized industrial hemp and removed the plant from the Controlled Substances Act.
While the bill’s passage opened up broader cultivation and commercialization of industrial hemp – defined as a cannabis sativa plant containing less than 0.3 percent THC -- banks and other financial institutions have remained hesitant to work with companies focused on selling hemp-derived cannabidiol products.
In its blog post, Square said businesses participating in the new program must be selling CBD products that are “hemp-derived and have less than 0.3% THC,” which complies with language in the Farm Bill.
According to Cheddar, Square worked to be certain it could facilitate CBD sales via its platform, and it has developed due diligence to ensure merchants are complying with state and federal regulations.
Square said it would charge vendors 3.9% plus 10 cents per transaction for in-store purchases and 4.2% plus 30 cents for online transactions. That’s compared to fees of about 2.6% plus 10 cents per in-store transaction, and 2.9 percent plus 30 cents for online purchases conducted via Square.
The company’s decision to launch a broader scale payments program for CBD companies comes one week after the U.S. House of Representatives voted in favor of the Secure and Fair Enforcement (SAFE) Banking Act of 2019, which prevents federal financial regulators from punishing financial services companies that conduct business with bonafide U.S. cannabis operations.
Additional details are available on the Square blog.