Senator Chuck Schumer yesterday (August 12) spoke from Main Street Farms in Cortlandville, discussing the financial issues the farm and its “Head & Heal” CBD oil brand have experienced with taking out loans, processing credit cards and handling payroll accounts.
Although the 2018 Farm Bill legalized the production and sale of industrial hemp, banks and lenders have still been unsure on whether they can provide services and products to industrial hemp-oriented businesses.
Schumer now says he’ll push federal regulators to issue clear guidance to these institutions confirming the legality of doing so.
“The industrial hemp industry is seeding and growing all over Upstate New York, with new businesses like Main Street Farms popping up left and right, which is why I fought so hard to strip the burdensome and outdated federal regulations from it by passing the Hemp Farming Act of 2018,” said Schumer. “However, if these businesses aren’t able to get financing from a bank or find a credit card processor that doesn’t charge them an arm and a leg, none of that matters all that much.”
Schumer pointed to Main Street Farms as the perfect example of an industrial hemp business with great potential that’s being held back by issues with financial products.
Located on Route 215 in Cortlandville, Main Street Farms maintains a 100-acre industrial hemp farm and also recently announced plans to open up a processing facility in the city of Cortland. The farm projects these two operations will employ a combined 80 people.
But it hasn’t been easy.
Following passage of the 2018 Farm Bill, Main Street Farms went to five different banks looking for financing and was turned down by every one due to their association with industrial hemp.
They finally found a local credit union that was willing to help, but the inconsistent access to financial services made launching their business challenging.
Furthermore, Main Street Farms had to pull numerous products off its website that were preventing credit card processors from working with the company.
There are now a few processors that work with Main Street and other hemp businesses, but they charge well above-average rates.
Additionally, the lack of access to financial products not only affects the hemp businesses, but its employees as well.
Schumer said his office has heard stories from employees of hemp businesses being unable to access private loans due to the nature of their employment.
“That’s why I’m urging the FDIC, Federal Reserve and OCC to issue updated guidance to the financial institutions looking to provide services to industrial hemp-oriented businesses as soon as possible,” said Schumer, “to help growers, producers and industry harvest the massive potential of this versatile crop.”
He was joined yesterday by Allan Gandelman, Owner of Main Street Farms and President of New York Cannabis Growers and Processors Coalition, along with Homer Mayor Hal McCabe, Cortland Mayor Brian Tobin and other local officials and industry experts.
Industrial hemp is a type of cannabis plant that is grown largely for industrial uses, but it can also be utilized for food, oil, and cosmetic products. Hemp contains a very small amount, typically between 0.2 and 0.3 percent of tetrahydrocannabinol (THC), and while from the same species of plant as marijuana, it has varied widely in use.
The Schumer-backed Hemp Farming Act of 2018 was passed and signed into law as part of the 2018 Farm Bill. This legislation:
· Removes industrial hemp from Schedule 1 of the Controlled Substances Act
· Empowers states to be the principal regulators of hemp
· Allows hemp researchers to apply for competitive grants from the U.S. Department of Agriculture (USDA); and
· Makes hemp farmers eligible to apply for crop insurance