New Federal Regulations Impact Commercial Production of Industrial Hemp
Credit unions are advised to ensure industrial hemp operation members comply with licensing, testing, and other state requirements.
With the passage of the Agriculture Improvement Act of 2018, industrial hemp is now treated differently than marijuana at the federal level. The act directs the U.S. Department of Agriculture to issue regulations and guidance to implement a program for commercial production of industrial hemp in the United States.
Even with the change, no new guidance on the topic has been issued by FinCEN. To make matters even more complex, state law also comes into play.
In Idaho, hemp is classified with marijuana and is illegal under the state law.
Oregon treats hemp differently. For the purposes of industrial hemp, the plant must contain a tetrahydrocannabinol, or THC, concentration of 0.3 percent or less. In addition, the Oregon Department of Agriculture is working on a program to regulate industrial hemp in Oregon with permanent rules for growing, handling, retail sales, and testing of industrial hemp. All growers and handlers must be registered with the state. More information can be found on the state’s industrial hemp website.
Washington state currently only allows industrial hemp as part of the industrial hemp research program, which limits the processing of industrial hemp to seeds. The bills that were introduced in Olympia this session to create a program along the lines of Oregon’s seem to have failed at this point.
Which brings up the question of providing banking services for industrial hemp concerns. Since these programs are highly regulated by the states, additional due diligence is needed by credit unions to ensure their operations are properly licensed with the state; their product is regularly tested; and the operations comply with other state requirements.
Question of the Week
Q. Does an individual with power of attorney, or POA, have the authority to close a membership account?
A. Yes, absent any language limiting the POA’s authority, the POA can close an account and withdraw the final shares just as the primary member could.
Office of Foreign Assets Control (OFAC)
OFAC has updated the SDN list as of April 12, 2019. The last update prior to this was April 5, 2019.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.