Several federal agencies recently gave the "green light" to banks and other financial institutions regarding offering banking services to enterprises engaged in the production and/or sale of hemp. Hemp is a plant that is similar to marijuana but with very low or no levels of THC-the psychoactive substance that results in a "high" feeling.
Under the 2018 Farm Bill, hemp was removed as a controlled substance under the Controlled Substances Act. Banks have nonetheless been reluctant to offer banking services to hemp producers and sellers, not being certain regarding whether suspicious activity reports were still required to be filed when dealing with hemp enterprises.
Now that that question has been answered by several federal banking agencies, banking services and products for hemp-related enterprises should be easier to find and should reduce the risks for banks.
The Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network said in Dec. 3 guidance that banks would no longer have to file suspicious activity reports just because they conduct transactions or other services for hemp-related businesses. Banks had been slow to serve industrial hemp-related businesses despite the cousin to marijuana being removed from federal controlled substance scheduling in the 2018 farm law. There was uncertainty over whether hemp would be subject to the same types of robust reporting requirements as marijuana.