Underwriters Shouldn't Be Reading Lab Reports
Underwriters Shouldn't Be Reading Lab Reports The Manual COA Problem Is Becoming One of the Biggest Compliance Gaps in Regulated Payment...
For the past several years, the hemp industry has operated in one of the most complex and rapidly evolving regulatory environments in commerce. Federal guidance, state laws, card brand policies, and sponsor bank expectations have often struggled to keep pace with a market that has expanded from CBD into intoxicating hemp-derived cannabinoids, beverages, edibles, concentrates, and thousands of other consumer products.
Now, with the implementation of Section 781 approaching—and despite ongoing legislative discussions and continuing resolutions that could affect implementation timing—the direction of travel is unmistakable: oversight of hemp-derived products is increasing, not decreasing.
For payment processors, sponsor banks, and merchant acquirers, this is more than a regulatory update.
It represents a fundamental shift in how regulated merchant portfolios must be managed.
For more than twenty years, merchant underwriting has focused on one primary objective:
Know Your Merchant (KYM).
Organizations collect business documents, verify ownership, perform OFAC and AML screening, review websites, determine MCCs, and assess financial risk.
These practices remain important.
But they no longer answer the most important question facing regulated commerce:
What products is this merchant actually selling today?
A merchant can remain the same while its product catalog changes weekly.
New cannabinoids are introduced.
Labels are redesigned.
Marketing claims evolve.
Products are discontinued and replaced.
Certificates of Analysis (COAs) expire.
State restrictions change.
Yet most financial institutions have little or no visibility into these changes after onboarding.
That creates a growing blind spot for underwriting, compliance, and enterprise risk.
Section 781 reflects a broader regulatory trend toward tighter oversight of hemp-derived products by revising the statutory definition of hemp and narrowing what qualifies for federal protection under existing law. Among other changes, it shifts attention toward total THC rather than only delta-9 THC and has implications for products that were previously marketed as compliant under the 2018 Farm Bill framework.
Even with implementation timelines subject to legislative change, organizations should not interpret delays as a reason to wait.
Instead, they should view this period as an opportunity to prepare.
Very few organizations can confidently answer questions like:
If these answers require weeks of manual research—or cannot be answered at all—there is significant operational risk.
Most monitoring programs focus on:
While valuable, these programs rarely monitor the products themselves.
Yet in regulated industries, products often represent the greatest source of compliance risk.
A merchant selling one non-compliant hemp product can expose the processor, acquiring bank, sponsor bank, marketplace, and payment ecosystem to unnecessary regulatory scrutiny.
The future of merchant risk is no longer just Merchant Intelligence.
It is Product Intelligence.
The organizations best prepared for the next phase of regulated commerce will have the ability to:
Identify regulated products across their portfolios.
Digitize product compliance documentation.
Validate Certificates of Analysis.
Track product-level changes over time.
Search portfolios by product, cannabinoid, ingredient, or compliance status.
Generate evidence for sponsor banks, auditors, regulators, and card brands.
Continuously monitor products—not just merchants.
This transforms compliance from a reactive exercise into an ongoing intelligence capability.
For decades, compliance has relied on PDFs, spreadsheets, email attachments, and manual document reviews.
That model is becoming increasingly difficult to sustain.
As regulated industries evolve, organizations need searchable, structured, continuously updated product intelligence rather than static documentation.
The future is digital.
The future is searchable.
The future is continuous.
Qredible was built specifically for regulated products and regulated commerce.
Our MyCOA platform enables merchants to centralize and manage Certificates of Analysis, product documentation, compliance records, and product transparency in a structured digital environment.
For payment processors, sponsor banks, and financial institutions, Qredible extends those capabilities through portfolio-wide intelligence.
Our platform helps organizations:
Offer MyCOA to merchants as a value-added service that improves compliance while creating new recurring revenue opportunities.
Rather than asking, "Who is this merchant?", organizations can begin asking the more important question:
"What products are they selling today—and are those products still compliant?"
Section 781 is unlikely to be the last significant regulatory change affecting hemp and regulated products.
State laws will continue to evolve.
Card brand expectations will become more sophisticated.
Sponsor banks will demand greater visibility.
Consumers will expect greater transparency.
Organizations that build product-level intelligence today will be better prepared for whatever comes next.
The winners won't simply respond to regulatory change.
They'll be ready before it happens.
Qredible is building the intelligence infrastructure for regulated commerce. Through MyCOA, Product Intelligence™, and Merchant Intelligence™, we help payment processors, banks, merchants, marketplaces, and regulators move beyond static merchant files to continuous, product-level compliance intelligence.
Because the future of regulated commerce isn't just knowing your merchant. It's knowing every product they sell.
This article also appears on LinkedIn: https://www.linkedin.com/pulse/781-hemp-rule-wake-up-call-payment-processors-banks-fitzgerald-cpp-bn9pe
