The U.S. Department of Agriculture has announced a new hemp program, days after Maine officials went to bat for a Whitefield farm that lost its financing and insurance over a lack of clarity in federal hemp regulations.
A community outcry over Sheepscot General Farm’s viral Facebook post Oct. 18 led Maine Gov. Janet Mills and U.S. Reps. Chellie Pingree and Jared Golden to call on U.S. Agriculture Secretary Sonny Perdue to issue regulations in accordance with hemp’s legal status under federal law.
Maine Department of Agriculture, Conservation and Forestry Commissioner Amanda Beal; state Rep. Chloe Maxmin, D-Nobleboro, who represents Whitefield; and state Rep. Craig Hickman, D-Winthrop, a farmer who serves as House chair of the Agriculture, Conservation and Forestry Committee, have all contacted Sheepscot General as well.
On Tuesday, Oct. 29, the USDA announced the creation of the U.S. Domestic Hemp Production Program, saying it is required under the 2018 U.S. Farm Bill. The program will create a nationwide regulatory framework that will make qualified hemp farmers eligible for federal farm loans and crop insurance.
“At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets,” Perdue said in a statement Tuesday.
The new rules will allow for hemp cultivation under the federal program’s rules or under state or tribal programs approved by the USDA.
The rule includes provisions for the USDA “to approve hemp production plans developed by states and Indian tribes including: requirements for maintaining information on the land where hemp is produced; testing the levels of delta-9 tetrahydrocannabinol; disposing of plants not meeting necessary requirements; and licensing requirements,” according to a USDA press release.
The USDA hopes to have these rules in place when the 2020 hemp-growing season begins next spring.
Sheepscot General Store and Farm, of Whitefield, posted the following on Facebook at 7:54 p.m., Friday, Oct. 18: “This afternoon we got news that #camdennationalbank is going to close our bank and loan accounts because of our hemp crop. We also were issued a notice from our property insurance Acadia Insurance that we have until Nov 19th to find another insurer. We believe this is wrong.”
The bank canceled a $12,000 equipment loan it had recently issued for a produce cooler the couple had ordered but have yet to receive, the Portland Press Herald reported.
The Press Herald reported that without insurance, farmers Taryn and Ben Marcus would risk losing the mortgage on their home.
According to Renée Smyth, executive vice president and chief experience and marketing officer for Camden National Bank, the confusion for banks regarding hemp comes from a lack of direction thus far from federal regulatory agencies.
In an email to Taryn Marcus, Smyth said the bank does not have a process in place to meet federal regulations. She said Camden National wants to work with hemp businesses and “continue to push our federal regulators to provide guidance and procedures so that we can serve” such businesses.
Despite the federal legalization of hemp with the passage of the 2018 U.S. Farm Bill, “neither the Financial Crimes Enforcement Network (FinCEN) nor federal bank regulators have issued updated guidance on working with hemp businesses following this change,” Smyth said in the email.
Hemp is similar to psychoactive marijuana in appearance and odor. Marijuana is illegal at the federal level, but legal in Maine.
The federal and state governments define hemp as a cannabis sativa plant with a concentration of less than 0.3% delta-9-tetrahydrocannabinol, or THC, the psychoactive component in marijuana that makes the user feel high.
The hemp crop is making a comeback in Maine, where historical reports say it was commonplace in Colonial times.
Since the Maine Legislature approved hemp as a commercial crop in 2015, its cultivation has steadily increased in the state.
Hemp cultivation began with a pilot program in 2016 involving two farmers and a quarter-acre. This year, 167 farmers are licensed to grow 2,706 acres of industrial hemp in the state, according to the Maine Department of Agriculture, Conservation and Forestry.
According to Taryn Marcus, Camden National Bank informed the business of its decision around 4:30 p.m., Friday, Oct. 18.
Sheepscot General’s insurance company, Acadia Insurance, had notified the business of its decision to terminate coverage a few weeks before, allowing until Nov. 19 for the business to find new insurance. Acadia’s parent company has declined comment.
Taryn Marcus said she is happy that Sheepscot General is now working with cPort Credit Union, as she feels the financial institution has values more in line with their own.
Within hours of Sheepscot General’s Facebook post, which reached 115,267 people and got 46,442 engagements, Pingree, D-Maine, contacted the farm to offer her support. Maxmin, Hickman, and Beal all contacted the farm Saturday morning.
Taryn Marcus said she was grateful for the overwhelming show of support from the community and elected officials, especially after business hours.
According to a press release from Mills’ office, the governor and Beal sent a letter to Perdue on Oct. 22, calling on the USDA to finalize guidance to “help states like Maine implement regulations relating to the production of commercial hemp,” as required under the 2019 U.S. Farm Bill.
On Oct. 28, Pingree and Golden, D-Maine, also sent a letter to Perdue urging him to expedite the review process and establish hemp rules, as required by the Agriculture Improvement Act of 2018.
The next day, the USDA announced the creation of the new federal hemp-growing program.
Maine’s U.S. representatives had sent a similar letter to the department in April.
“Hemp is a growing industry in Maine, where 167 new hemp growing licenses were issued this year alone. In 2016, that number was just two. Hemp offers new economic opportunities for Maine farmers, but those opportunities are being stifled by a lack of regulatory clarity and support,” a press release about Pingree and Golden’s recent letter stated.
Smyth, from Camden National Bank, pointed to the passage in the U.S. House of Representatives of the Secure and Fair Enforcement Banking Act as a potential bright spot on the horizon for clarity in federal hemp regulations.
If the bill passes the U.S. Senate and is signed into law, it would create a regulatory framework for banks and insurance companies to deal with all types of cannabis clients, even those dealing with the federally illegal psychoactive variety.
Amendments regarding hemp attached to the bill would issue guidance to financial institutions confirming the legality of hemp and hemp-derived CBD products within 90 days of the enactment of the law, according to Smyth.
The SAFE Banking Act is the first stand-alone marijuana reform bill in history to pass the House of Representatives, in a 321-103 vote, Southern California News Group reported Sept. 26.
However, the bill faces opposition in the U.S. Senate, where passage is uncertain.