Nov. 5: Square closes hemp-primary accounts as Wisconsin shops plan to keep selling after Dec. 11

Some Wisconsin hemp retailers say they plan to keep selling low-THC products after the federal intoxicating-hemp definition tightens on Dec. 11, 2026, arguing the goods remain lawful under Wisconsin's delta-9 THC standard even as payment processors cut off hemp accounts, according to a Nov. 5 Milwaukee Journal Sentinel investigation.

The Journal Sentinel reported that Kind Oasis, a THC and CBD shop in Milwaukee, consulted its attorney, bank, and insurer and concluded it can continue selling gummies and beverages that stay under the state's THC threshold if sales remain in-state. Company spokesperson Jason Handal told the paper, "It's legal under state law," and, "We're comfortable with our compliance."

That stance tracks a May 2026 Wisconsin Legislative Council issue brief on the federal hemp rewrite. Senior staff attorney Amber Otis wrote that the federal change "does not directly affect the legality of hemp under state law" because Wisconsin's definition still turns on delta-9 THC concentration rather than the new federal total-THC and per-container tests. The brief also warned that state-law legality "is not a defense to a violation of federal law," and that "industry participation will depend on risk tolerance by stakeholders and the manner in which the enforcement of the federal controlled substances laws is prioritized."

Congress narrowed the federal hemp definition in late 2025. Under that rewrite, final hemp-derived cannabinoid products with more than 0.4 milligrams of total THC per container, plants or products above 0.3 percent total THC including THCA, and products with cannabinoids that a cannabis plant cannot naturally produce, or that were synthesized outside the plant, fall outside federal hemp and are treated as marijuana under the Controlled Substances Act. A stopgap funding law later delayed most of those changes to Dec. 11, 2026, while the exclusion for cannabinoids not capable of being naturally produced by the plant still takes effect Nov. 12, 2026, according to Congressional Research Service legal analysis republished at EveryCRSReport.

The Legislative Council brief was published in May 2026, when the rewrite's main effective date was still Nov. 12. The Dec. 11 delay does not change the brief's core state-law point: Wisconsin statutes do not automatically adopt a more restrictive federal hemp definition, so a product can remain hemp under state law while failing the new federal tests.

Wisconsin's hemp market is large and lightly regulated compared with states that route intoxicating products through licensed cannabis systems. The Journal Sentinel put the state's hemp industry at about $700 million. It reported that state law does not set an age limit for hemp purchases, does not require product testing for safety or dosing, and does not impose packaging rules. Earlier in 2026, the paper said it bought 30 Milwaukee-area hemp products and found most above the coming federal limit, with some contaminated. Minneapolis hemp and cannabis attorney Jason Tarasek told the Journal Sentinel that Wisconsin's thin state rules could raise enforcement risk relative to tightly regulated adult-use markets, and that "in Wisconsin, no consumer can reliably know that a hemp-derived THC product has been tested."

Not every Wisconsin operator is taking the same risk. Phillip Scott, who owns a Madison hemp retail store and founded the Wisconsin Hemp Farmers and Manufacturing Association, told the Journal Sentinel he plans to keep running his shop as it is after watching Democrats win control of both chambers of Congress in the midterms, hoping lawmakers still craft a hemp path. He predicted that about half of the state's hemp businesses will close and that roughly a quarter of those that remain will operate as they do now. "A lot of people are going to take the risk," Scott said. "People have put years of their lives on the line here."

Rob Pero, owner of Canndigenous, a Wisconsin CBD drink company whose products are sold in grocery channels including Piggly Wiggly and Woodman's, told the paper he does not plan to sell his current products under the federal ban. "I wouldn't want to put my life on the line," Pero said. He said distributors have held larger orders while they wait for clarity.

Even retailers who believe Wisconsin law still covers their shelves face immediate commercial pressure. The Journal Sentinel reported that Square is shutting down hemp business accounts on Nov. 5. Don Raleigh, vice president of sales and partnerships at Evolve Payment, told the paper card processors will not allow transactions for products prohibited under federal law, and that businesses that ignore processor terms risk fines or bans. Raleigh said Wisconsin hemp businesses may have to pivot to cash or pay-by-bank methods such as ACH.

That payment cut tracks Square's earlier hemp exit. In August 2026, Marijuana Moment reported an email in which Square told merchants that selling CBD and hemp-derived products would no longer be permitted on its platform because of the federal rewrite, directed mixed-catalog sellers to remove CBD and hemp items by Oct. 15, and said non-CBD products could remain. A Square spokesperson told Marijuana Moment the company was notifying impacted sellers to ensure compliance with the new federal law. The Journal Sentinel's Nov. 5 reporting confirms that hemp-focused accounts are being closed on that date, separate from the Oct. 15 catalog scrub for mixed sellers.

Insurance is also unsettled. Cory Lake, CEO of Lake Group Insurance in Minnesota, told the Journal Sentinel he has about 300 hemp and cannabis clients, including a Wisconsin THC beverage company, and will decide day by day after the ban whether to keep covering Wisconsin hemp. "Without those rules and regulations, it's tough to create an insurance policy, but more importantly, it's just tough to make sure that people are safe," Lake said.

Local enforcement posture is unclear. A Wisconsin Department of Justice spokesperson told the Journal Sentinel that local law enforcement handles the vast majority of enforcement in the state. A Milwaukee Police Department spokesperson said the department intends to seek legal guidance from the city attorney's office.

Kind Oasis told the Journal Sentinel it has already moved away from delta-8 products and may drop THCA flower, which Congress expressly brought into the total-THC calculation. Handal said the shop will stay in close contact with its attorneys.

Hemp Law Watch reviewed the Nov. 5 Milwaukee Journal Sentinel investigation, the May 2026 Wisconsin Legislative Council issue brief, Marijuana Moment's August Square notice reporting, and Congressional Research Service analysis of the Dec. 11 delay and Nov. 12 synthetic-cannabinoid exclusion. Business plans described above are the companies' own statements as reported by the Journal Sentinel; they are not findings that any product is lawful to sell after Dec. 11 under federal law. This report is not legal advice. Retailers and consumers should confirm current federal, state, payment-processor, and insurance rules with counsel and their own providers before deciding what to sell, buy, or process.

Readers should treat Dec. 11 and Nov. 12 as statutory effective dates that Congress could still amend, and treat Square's Nov. 5 account closures as a private underwriting decision that does not itself change the criminal law.