Thousands Of Small Business To Lose Access To Banking Services over Cannabis.

With the passing of the 2018 Farm Bill people were led into a false sense of security when it comes to banking. The word abounds that "Hemp" is legal therefore there would be no problem. There could be nothing further from the truth.

Hidden in the bill is the following statement;

‘‘(c) EFFECT ON OTHER LAW.—Nothing in this subtitle shall affect
or modify—
‘‘(1) the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
301 et seq.);

In layman terms under Federal Banking Laws, a financial institution that is required to follow Federal Reserve regulations cannot "knowingly" do business with any person or business who's income is derived wholly or in part from "illegal activity".

The Small Business Administration https://www.sba.gov/in this memo "SBA Policy Notice" set forth the following;

2.Whether a business is eligible is determined by the nature of the business’s specific operations. The following businesses are ineligible:(a)“Direct Marijuana Business” --a business that grows, produces, processes, distributes, or sells marijuana or marijuana products, edibles, or derivatives, regardless of the amount of such activity. This applies to personal use and medical use even if the business is legal under local or state law where the applicant business is or will be located. (b)“Indirect Marijuana Business” --a business that derived any of its gross revenue for the previous year (or, if a start-up, projects to derive any of its gross revenue for the next year) from sales to Direct Marijuana Businesses of products or services that could reasonablybe determined to support the use, growth, enhancement or other development of marijuana. Examples include businesses that provide testing services, or sell grow lights or hydroponic equipment, to one or more Direct Marijuana Businesses. In addition, businesses that sell smoking devices, pipes, bongs, inhalants, or other products that may be used in connection with marijuana are ineligible if the products are primarily intended or designed for such use or if the business markets the products for such use.(c)Hemp-Related Business” --a business that grows, produces, processes, distributes or sells products purportedly made from “hemp” is ineligible unless the business can demonstrate that its business activities and products are legal under federal and state law. Examples of legal hemp products include paper, clothing and rope.

With the Tax Season in full bloom more and more "indirect Business" are being identified and are at risk of losing their SBA loans and financial services!

In the meantime, as they have done in numerous years past, the U.S.Congress sits on legislation that would #ENDtheMADNESS. To see those pieces of legislation visit our website listed below.

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