WASHINGTON, D.C. — Representatives of the Kentucky Hemp Industries Association were on Capitol Hill for a meeting with the staffs of Sen. Mitch McConnell (R-Ky.), U.S. Rep. John Lewis (D-Ga.) and Sen. Thom Tillis (R-N.C.), to discuss solutions for the banking issues that are hampering the development of the hemp industry.
KYHIA board member Joe Hickey explained the situation: “The reluctance of the banking industry to provide financial services to hemp farmers, processors and entrepreneurs is crippling this emerging industry and stalling rural economic development.”
Hickey is director of corporate relations at Atalo Holdings, one of the largest permitted hemp production companies in the U.S.
Atalo reports that a number of their wholesale and white label customers across the country have recently been unable to process retail transactions due to uncertainty in the banking industry.
At issue is lack of adherence to the regulatory guidance for the financial sector included in the Hemp Farming Act of 2018, which was signed into law on Dec. 20, 2018 as part of the U.S. Farm Bill of 2018.
“The act promised to avail hemp farmers federal agricultural grants, to make the national banking system accessible to farmers and others involved, and allow for other benefits of production of a recognized crop such as research, marketing and crop insurance,” said Tate Hall, president of the Kentucky Hemp Industries Association. “We’re making progress, such as the recent reiteration of the availability of federal crop insurance inserted into the Disaster Relief Bill. However, the banking issues are an immediate obstacle to growth of this industry and are hurting American farmers at a time when this crop should be a benefit.”
Tate, vice president of business development at Terra Farma, a large hemp processor operating in four states, said, “We really hope that by the end of 2019, the federal government can figure this thing out to make this a more pro-business and pro-farmer market as they go hand-in-hand in the young hemp industry.”
Matthew Willse is a KYHIA member and founder and president of Resonate Foods, a craft hemp farming and processing company from Eddyville, Ky. that contracts with tobacco and row crop farmers to grow hemp in the region. Willse joined the group in Washington.
“It was a great opportunity to discuss banking issues for the hemp industry with Senator McConnell’s staff,” he said. “There are still some basic financial services that aren’t readily available for legal hemp small businesses, especially merchant services and commercial debt, not to mention the advertising challenges the industry faces. I encourage industry stakeholders to make their voices heard as hemp regulations are addressed by Congress, USDA and FDA in the coming months.”
KYHIA and its parent organization, the Hemp Industries Association, plan to continue vigorous advocacy for complete implementation of the U.S. Farm Bill and the Hemp Farming Act of 2018. According to Joe Hickey, “Our goal is to encourage Senator McConnell to spearhead the effort to resolve these issues. This financial roadblock was not the intention of the Hemp Farming Act that legalized hemp as a commodity. Farmers and processors need assurance they will have access to credit card processing and that financial services will be reopened to the hemp industry. They need certainty that there will be no further unexpected bureaucratic roadblocks.”