On Monday, the U.S. House of Representatives as soon as once more passed the Secure and Fair Enforcement (SAFE) Banking Act with a 321-101 vote.
The act goals to guard establishments offering monetary companies to state-legal cannabis, hemp and ancillary companies.
“This bill will provide additional clarity for banks, insurance companies and card processors that they can in fact do business with legally operating hemp businesses,” stated Rep. Andy Barr (R-Ky.) throughout a House flooring debate Monday afternoon. “It would also direct our federal financial regulators to update best practices for serving hemp and CBD businesses.”
Despite hemp’s legality on a nationwide degree, many trade enterprise homeowners are nonetheless having bother discovering monetary establishments that may work with them – particularly on the subject of cannabidiol (CBD) companies. To that finish, many trade organizations are supportive of the invoice.
But the invoice incorporates a small provision that’s regarding to others.
Larry Farnsworth, spokesperson for advocacy company National Industrial Hemp Council (NIHC), factors out that the SAFE Banking Act defines “hemp-related legitimate businesses” as firms that have interaction in hemp or CBD enterprise “in conformity with the Agricultural [sic] Improvement Act of 2018.”
In different phrases, these working in states nonetheless operating their hemp pilot packages beneath the Agricultural Act of 2014 (the 2014 Farm Bill) might not be afforded the identical protections as these in states with new plans authorised by the U.S. Department of Agriculture (USDA).
It’s an enormous piece of the puzzle which may be overlooked, Farnsworth says. As of now, 20 states are nonetheless planning on working beneath their pilot packages this upcoming season, together with a few of the nation’s largest producers like Colorado, Kentucky and Montana. (Under the USDA’s remaining rule, states will likely be permitted to function beneath their pilot packages till Jan. 1, 2022.)
Overall, Farnsworth says almost 75% of the hemp produced in 2020 got here from states nonetheless working beneath pilot packages.
What’s extra, many farmers nonetheless have product leftover from earlier years that was produced beneath pilot packages, Farnsworth says. With the present language of the SAFE Banking Act, banks could also be hesitant to service any enterprise coping with that leftover product.
“Ironically, we’re delegitimizing hemp as a business while we’re allowing the … marijuana industry to access the banking system,” Farnsworth says.
The Good News
Farnsworth says the NIHC is at present working with Congress to amend the invoice to incorporate all legally working hemp companies, whether or not working inside 2014 or 2018 farm invoice framework.
“We would like to see a hemp economy that works for everybody,” Farnsworth says.
Aside from that provision, the NIHC and different trade teams are largely supportive of the SAFE Banking Act.
The invoice has gone by a number of iterations over a span of some years. According to U.S. Hemp Roundtable, language revolving round hemp and CBD companies was added to the primarily cannabis-driven invoice in late 2019. Importantly, the invoice additionally clarifies that hemp companies will not be topic to the identical scrutiny wanted for adult-use cannabis.
The House has handed the SAFE Banking Act thrice since 2019, however every time, it failed within the Senate. The invoice now heads to the Senate for a vote as soon as once more.
“Prospects for the bill appear brighter this year with the change in control of the Senate,” U.S. Hemp Roundtable writes on its website. “And the bill itself is much improved to explicitly protect financial and credit card transactions for hemp farmers and processors, as well as businesses engaged in the handling, manufacturing and sale of hemp-derived cannabinoid products such as CBD.”
Hemp Grower Associate Editor Tony Lange contributed to this report.