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Issues with cannabis and banking are a major hurdle for the legal industry that lawmakers have yet to address effectively. Given the federal Schedule I status of cannabis, banks and financial companies typically refuse to work with businesses that have direct ties to cannabis production or sales. They do this because federal law leaves banks vulnerable to criminal charges and asset forfeiture for conducting business with drug-related companies. The banks even have to flag accounts that they think may be questionable.
Thankfully, attempts at reform are at least starting to gain traction, although the issue is currently far from resolved. However, this week, important federal figures, including the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency, and the Conference of State Bank Supervisors issued a statement on Tuesday, December 3rd, 2019.
Effectively, this statement declared that banks can now work with hemp-based companies, including farmers and retail businesses, because hemp is no longer a Schedule I substance. That means that hemp companies should now have access to all of the same banking and payment processing or merchant services as any other business.
This new policy will make it substantially easier for hemp farmers and businesses that work with or sell hemp-based products to open new bank accounts and secure merchant services for their websites and retail operations.
Although this move still leaves the primary sector of the cannabis industry vulnerable because of the necessary cash economy that the lack of banking access and credit card processing options creates, there is no question that legitimizing the hemp industry and its ability to bank is a step in the right direction. Hopefully, with so many efforts at reform taking place at the federal level, banking access for legal cannabis businesses will also become reality in the near future.
For previous Ladybud articles about hemp, click here.