Friends, just a quick note on the news that the U.S. Treasury Department (through its Financial Crimes Enforcement Network) has issued new guidance to banks and credit unions that, in short, hemp companies should be treated like just about everyone else (except for non-hemp cannabis companies (known as “marijuana-related businesses” in FinCEN parlance)). (link)

Back in December 2019, when FinCEN first issued guidance on dealing with hemp businesses (saying that Suspicious Activity Reports would no longer be required), I wrote in these Musings that the 2019 guidance “may help banks become more comfortable servicing compliant hemp companies, removing another roadblock to growth for the industry.” (link) Perhaps I was too optimistic, because half a year later, based on my conversations, hemp companies still have trouble accessing basic financial services such as credit cards and bank accounts. Hopefully, this broad, definitive statement from FinCEN will finally open up banking and credit once and for all.

One thing to note is that the guidance is very focused on customer due diligence (“know your client”). This includes not only confirming proper licensing, but also that the customer is complying with state laws and not otherwise dealing with non-hemp cannabis. To me, this properly acknowledges the fact that hemp is a highly-regulated, but legal (well, other than in a few states) industry and should be treated that way – fairly, but carefully.