{"id":92684,"date":"2019-08-04T01:59:47","date_gmt":"2019-08-04T01:59:47","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/hemp-entrepreneurs-face-banking-challenges\/"},"modified":"2019-08-04T01:59:47","modified_gmt":"2019-08-04T01:59:47","slug":"hemp-entrepreneurs-face-banking-challenges","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/hemp-entrepreneurs-face-banking-challenges\/","title":{"rendered":"Hemp entrepreneurs face banking challenges"},"content":{"rendered":"\n

\"Hemp
Hemp is fully legal, but it can be tough for hemp companies to find banking services.<\/span>Jerry McBride\/Durango Herald file<\/span><\/figcaption><\/figure>\n<\/p>

Opening a checking account or getting a loan can be tough for hemp businesses in Southwest Colorado and across the nation because federal regulations haven\u2019t caught up to the industry.<\/p>\n

The 2018 Farm Bill declassified hemp as a controlled substance, but federal guidelines for financial institutions interested in doing business with the hemp industry haven\u2019t been written, making it difficult for some hemp business owners to open accounts and get loans.<\/p>\n

When Brandi Barattini tried to find a bank for Cannagenics Inc., a Durango hemp farming company and wholesaler, it was difficult to find services or find out why services weren\u2019t available, she said.<\/p>\n

\u201cWhat do you do when you keep getting told: \u2018No, no, no?\u2019 \u2026 How are you supposed to pay vendors?\u201d said Barattini, executive vice president for the company.<\/p>\n

Cannagenics<\/a> now receives banking services through its holding company, she said.<\/p>\n

Across the country, Cannagenics customers in Nevada, Arkansas and New York are also experiencing problems with having their accounts frozen, she said.<\/p>\n

\u201cIt\u2019s not a Colorado problem; it\u2019s a national problem,\u201d she said.<\/p>\n

It\u2019s also \u201calmost impossible\u201d for hemp companies to get large conventional loans, she said.<\/p>\n

Financial problems for hemp companies are cropping up as demand for hemp-derived CBD products balloons.<\/p>\n

CBD oil can be used to improve sleep, reduce inflammation and treat seizures, but it is not yet regulated by the U.S. Food and Drug Administration.<\/p>\n

The CBD market was $390 million in 2018. That is expected to jump to $1.3 billion by 2022, according to New Frontier Data, a cannabis statistics company.<\/p>\n

Clear direction from the federal government to banks could clear up most of the problems and encourage investment that would help the industry grow, said Scott Perez, a part-time hemp consultant and farmer in La Plata County.<\/p>\n

\u201cIf Congress would make it real clear to banks that their will is for the banking industry to work with the hemp, that would really solve a lot of problems,\u201d he said.<\/p>\n

Some banks are finding a way to provide services.<\/p>\n

First Southwest Bank is one of the local financial institutions working with the hemp industry after having figured out a way to navigate one of the biggest risks for banks \u2013 ensuring a company is selling hemp and not marijuana, because marijuana remains federally illegal, said CEO Kent Curtis.<\/p>\n

Hemp is defined by the state of Colorado as having less than 0.3% THC, the psychoactive substance in marijuana.<\/p>\n

Banks must be ready to prove to regulators that the hemp businesses they are working with are federally legal, he said.<\/p>\n

First Southwest Bank requires hemp customers to submit testing results twice a year to prove the product they are selling meets the state\u2019s definition for hemp, Curtis said. The bank is also selective about which companies it works with because the industry is young and developing.<\/p>\n

\u201cIt\u2019s still the Wild West,\u201d he said.<\/p>\n

If First Southwest Bank received testing results from a company that did not meet state standards, the bank could shut down that company\u2019s account, he said.<\/p>\n

Managing hemp accounts is more work than a traditional account because the institution must ensure testing results are submitted, he said.<\/p>\n

However, the state\u2019s clear guidelines around hemp have given the industry in Colorado a clear advantage and allowed the bank to provide services, he said.<\/p>\n

\u201cColorado as a state is probably further ahead than any other state in the country,\u201d Curtis said.<\/p>\n

mshinn@durangoherald.com<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Southwest Bank finds a way to fill the need<\/p>\n","protected":false},"author":1,"featured_media":92685,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6150,6171,5738,5740,5737,5736,5735],"tags":[2547,1504,21,13,28],"naviga_topic":[],"class_list":["post-92684","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-arable-farming","category-banking","category-cortez","category-frontpage-lead","category-headlines","category-local-news","category-news","tag-arable-farming","tag-banking","tag-cortez","tag-frontpage-lead","tag-headlines"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/92684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=92684"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/92684\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/92685"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=92684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=92684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=92684"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=92684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}