What is the hemp rule that could upend electronic payments overnight?

The risk Huber references is a regulatory reinterpretation that could reclassify hemp-derived cannabinoid products — which have been treated as lawful under the 2018 Farm Bill — back into a controlled substance framework, effectively turning compliant CBD merchants into operators of drug distribution businesses in the eyes of payment processors and banks. Texas's hemp industry alone represents approximately $8 billion in economic activity, illustrating how much value is at risk from a single regulatory pivot. While Huber noted that most ISOs and banks had maintained their positions rather than panicking, he emphasized that merchants should use any window of stability to strengthen their compliance infrastructure before enforcement intensifies.

What does marijuana rescheduling from Schedule I to Schedule III mean for payment processing?

A move from Schedule I (no accepted medical use) to Schedule III (accepted medical use, moderate dependence potential — the same schedule as Tylenol with codeine) would represent a fundamental change in cannabis's federal legal status. For payment processing, the implications are significant but uncertain: Huber's view is that Visa and Mastercard 'probably do not care one way or another' as long as they can process transactions without regulatory blowback — but rescheduling would force card brands to formally revisit their merchant category policies for cannabis-adjacent businesses. Existing hemp and CBD operators with established compliance infrastructure could find themselves better positioned to expand into new markets, while those without compliance infrastructure may face new competition from well-funded cannabis entrants who gain payment access for the first time.

Why are peptide merchants being placed on the MATCH list and how can they get off?

Huber reported his firm receiving 15-20 new peptide MATCH list cases in a concentrated period, driven by payment processors categorically placing peptide merchants on the Mastercard Terminated Merchant File as a de-risking measure — often without individual assessment of the merchant's actual products or practices. His firm was 'almost wholesale getting them off match because what they're doing is not wrong. There's nothing wrong with peptides. They're not the end product.' The path to MATCH list removal requires demonstrating that the merchant's products are lawful, their business practices are compliant, and their documentation supports the legitimacy of their operations. Merchants with pre-existing blockchain-anchored COA records and compliance documentation through platforms like Q-Trust have a substantially stronger evidentiary foundation for MATCH list defense than those operating without documentation infrastructure.

What compliance requirements will remain regardless of how hemp and CBD regulations change?

Huber was explicit about the permanent compliance floor that no regulatory outcome will eliminate: 'There's still going to be a BSA requirement. There's still KYB, KYC. There's still going to be product requirements.' The Bank Secrecy Act requires financial institutions to maintain anti-money laundering programs and know their customers — which means merchants must be able to provide verifiable business identity documentation regardless of their product category's regulatory status. Product requirements will also persist: 'Even if the product requirements change and go down to zero THC, you still got to make sure that there's zero THC in these products' — meaning COA documentation proving compliance with whatever the current standard is will always be required. Merchants who build compliance systems around these permanent floors rather than specific regulatory outcomes will have infrastructure that survives any rule change.

How does Qredible help hemp and CBD merchants navigate regulatory uncertainty?

Fitzpatrick noted that Qredible's phone has been 'ringing off the hook with merchants and ISOs saying, help us get in compliance' as regulatory uncertainty has intensified. Qredible's Q-Trust platform addresses the permanent compliance floors that Huber identified: MyCOA automates COA documentation so merchants can prove product compliance with whatever the current THC or analyte standard requires — without manual effort; Q-Audit's continuous monitoring ensures marketing claims stay within current regulatory parameters as those parameters shift; Q-Certification provides a continuously monitored, blockchain-verified compliance credential that banks and processors can rely on as a real-time trust signal rather than periodic snapshots; and Q-Trust's blockchain registry creates the immutable documentation record that provides defensibility when regulatory enforcement actions or MATCH list placements occur.

What is the 'head on a swivel' challenge Huber identifies for fintech and payments heading into 2026?

Huber described the primary challenge for fintech and payment companies heading into 2026 as 'the total unpredictability' of the regulatory environment — not any specific rule change, but the pace and arbitrariness of change itself. As an example he cited marijuana rescheduling: 'What if marijuana went to schedule nothing, is treated like alcohol? All of these cashless ATM companies, they're out of business.' His advice — 'keep your head on a swivel' — reflects the need to build compliance systems that can adapt to any regulatory outcome rather than being optimized for the current one. For merchants, this means investing in infrastructure that addresses the permanent compliance floors (BSA, KYB, KYC, product documentation) while maintaining the agility to adjust specific parameters — THC limits, analyte requirements, claim standards — as rules change.

What Hemp, CBD, and Emerging Product Merchants Need to Know About Regulatory Uncertainty

Category: Business Learning Center Videos

Author: The Qredible Team

Date: December 22, 2025

A single rule change can turn a compliant merchant into a regulatory target overnight. For businesses selling hemp-derived products, CBD, peptides, and other emerging categories, regulatory uncertainty for hemp and CBD merchants has become a defining challenge. The question is no longer whether rules will change, but how quickly businesses can adapt when they do.

During a recent Qredible Live Broadcast, James Huber, Managing Partner at Global Legal Law Firm and host of the Payments Experts Podcast, offered a candid assessment of the current regulatory climate facing high-risk merchants. This discussion shed light on how businesses can build resilient operations capable of weathering sudden policy shifts while maintaining access to payment processing.

The Hemp Rule That Could Change Everything

Huber recently discussed how a quiet hemp rule could upend electronic payments overnight, effectively turning CBD merchants into drug dealers in the eyes of regulators. When asked what this kind of policy whiplash looks like on the ground, his response was measured but honest.

"It hasn't been too bad. I haven't seen total panic," Huber said of the initial industry reaction. He noted that some of his larger CBD clients "freaked out that morning but then they go look, we've got a year to figure this out and it's probably just some more people need to make some money off of it."

The potential impact of such changes extends far beyond individual merchants. Huber pointed to Texas as an example: "What do we say, it was like an 8 billion dollar industry for Texas?" The stakes are enormous, and the timeline for adaptation is often shorter than businesses expect.

Despite the initial concern, Huber observed that most ISOs and banks have maintained their positions. "A couple of them have sort of reversed course, but most of them are there," he noted. This stability, however temporary, provides a window for merchants to strengthen their compliance posture before enforcement actions begin.

Why Product Compliance Is the Path Forward

As regulatory frameworks shift, one constant remains: product-level compliance will determine which merchants survive. Huber explained his view on where the industry is heading.

"If there's going to be a regulatory change and there's going to be no Delta 8 products anymore, let's say, the kindergarten products that they're trying to sell that look like Froot Loops, this stuff has got to get controlled," he said. "And if that stuff starts to get controlled and who knows what the revision is, it's all going to be about product compliance. It's all going to be about looking at the COAs and seeing what's in there and what's not in there."

This assessment aligns with what Qredible CEO Brian Fitzpatrick is seeing in the market. "Our phone's been ringing off the hook with merchants and ISOs saying, help us get in compliance," Fitzpatrick shared. "We're getting people coming up on our website and signing up to get in our registry and download our COA management tools and our proactive compliance tools."

The message is clear: merchants who invest in product compliance now, before enforcement intensifies, will be better positioned to demonstrate good faith efforts to regulators and maintain their banking relationships.

The Marijuana Rescheduling Wild Card

Adding to the uncertainty is the potential rescheduling of marijuana from Schedule I to Schedule III. Huber acknowledged that this change, if it happens, could dramatically reshape the payment processing environment for cannabis-related businesses.

"Schedule three, that's Tylenol with codeine," Huber noted, putting the potential change in perspective. When asked how card brands might respond, he offered a practical view: "Well, I can go to the pharmacy, I pay with my card. I don't know."

His assessment of Visa and Mastercard's likely position was pragmatic. "Visa and Mastercard probably, it's my opinion, do not care one way or another. They don't want to get the doors kicked in. They're making the money. They're making their money either way," Huber explained. "Whether you're at the ATM, you're at this, that, the other thing. Everyone's going, 'Oh, cashless ATMs are illegal.' And they're so mad. Guess what? Nothing's happened."

For merchants currently operating in hemp and CBD spaces, marijuana rescheduling represents both opportunity and threat. Those with established compliance infrastructure and banking relationships may find themselves well-positioned to expand. Those without may face new competition from well-funded entrants.

Keep Your Head on a Swivel

When asked about what worries him most for fintech and payment companies heading into 2026, Huber was direct about the challenge.

"The problem right now is just the total unpredictability," he said, noting that business owners need to keep "your head on a swivel" because regulatory changes could upend entire business models overnight. He pointed to potential marijuana rescheduling as an example of how quickly the ground can shift: "What if marijuana went to schedule nothing, is treated like alcohol? All of these cashless ATM companies, they're out of business."

Despite this uncertainty, Huber emphasized that certain compliance fundamentals will persist regardless of how specific regulations change. "There's still going to be a BSA requirement. There's still KYB, KYC. There's still going to be product requirements," he said. "Even if the product requirements change and go down to zero THC, you still got to make sure that there's zero THC in these products."

This insight offers a clear strategy for merchants facing regulatory uncertainty: focus on building robust compliance systems that can adapt to changing requirements rather than betting on any single regulatory outcome.

The Peptide Warning Sign

Hemp and CBD merchants are not alone in facing sudden regulatory pressure. Huber shared what his firm is seeing in the peptide space, offering a cautionary tale for merchants in emerging product categories.

"The peptides are blowing up and we have, I think we get like 15 to 20 peptide merchants recently because they're just wholesale putting them on match," Huber revealed. The match list, maintained by Mastercard, can effectively end a merchant's ability to process card payments.

However, Huber noted that his firm has been "almost wholesale getting them off match because what they're doing is not wrong. There's nothing wrong with peptides. They're not the end product."

This example illustrates both the risk and the opportunity in the current environment. Merchants who understand their products, maintain proper documentation, and work with knowledgeable legal counsel can often resolve compliance disputes. Those who operate without this infrastructure may find themselves locked out of the payment system with little recourse.

Build Resilience Through Transparency

The common thread running through Huber's advice is the importance of transparency with banking and processing partners. When regulatory changes hit, merchants who have maintained open communication and documented their compliance efforts will have far more options than those who have operated in the shadows.

"The big thing that really needs to happen is the bank and the processor need to know what's going on. If they know, you have a ton of defensibility," Huber stated.

For hemp, CBD, and emerging product merchants, the path forward requires accepting that regulatory uncertainty for hemp and CBD merchants is not a temporary condition but the new normal. Success belongs to those who build adaptable compliance systems, maintain transparent relationships with their payment partners, and stay ready to pivot when the rules inevitably change.

Watch the Full Episode

This episode features James Huber, Managing Partner at Global Legal Law Firm, an expert payments litigator and cryptocurrency consultant who helps electronic payment processing companies stay compliant and avoid costly legal pitfalls. From defending clients under federal scrutiny to advising on mergers, acquisitions, and compliance strategy, James brings a deep understanding of the fintech and crypto regulatory environment.

Navigating Payments, Compliance & Crypto Law – Protecting the Future of Fintech