Representatives of the Kentucky Hemp Industries Association (KYHIA) were on Capitol Hill for a meeting with the staffs of Senator Mitch McConnell, Representative John Lewis and Senator Thom Tillis to discuss solutions for banking issues related to the nascent legal hemp industry.
“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," said KYHIA board member Joe Hickey. Hickey is also director of corporate relations at Atalo Holdings, one of the largest permitted hemp production companies. Atalo reports that a number of its wholesale and white label customers across the country have recently been unable to process retail transactions due to uncertainty in the banking industry.
Kentucky Department of Agriculture
Kentucky Commissioner of Agriculture Ryan Quarles, right, delivers Kentucky's state hemp plan to U.S. Agriculture Secretary Sonny Perdue.
At issue is lack of adherence to the regulatory guidance for the financial sector included in the Hemp Farming Act 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.”
"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 Hall
Matthew Willse is a KYHIA member and founder and president of Resonate Foods, a craft hemp farming and processing company from Eddyville, Kentucky, 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."
Reliable access to banking and financial services are a primary concern for the legal hemp industry as states such as Kentucky seek to establish infrastructure and a viable industry within the state. You can read more about Kentucky's efforts here.