Customers Bank, a commercial bank based in Wyomissing in Pennsylvania, has announced that it will start doing business with hemp and hemp-based companies within Pennsylvania and New York.
The bank said that it would provide all banking services, including mobile and online banking, commercial checking, bank fraud protection and wire transfers. The only condition that the bank is imposing is that those businesses should comply with the applicable state laws for the industry.
The decision has been welcomed by many hemp businesses, especially startups, who said that they were relieved that Customers Bank was giving them an opportunity to grow their businesses in the traditional way of taking loans and putting that money into R&D, equipment acquisition and payroll, among other business expenses.
Geoff Whaling, Hemp Industry Association’s chairman, was also pleased by the announcement made by Customers Bank. The hemp industry advocate said that the bank’s decision was providing a much-needed solution to the hemp industry.
The excitement over the announcement by Customers bank is understandable because for several decades, the hemp industry was a no-go area for financial institutions since hemp and its cousin marijuana were classified as Schedule I controlled substances.
Banks still continued to distance themselves from the hemp industry even after the 2014 Farm Act allowed states to establish pilot hemp programs for research purposes.
Last year, the Agriculture Improvement Act of 2018 (aka the Farm Bill) legalized the commercial cultivation, processing and trade in hemp and its products. That law resulted in an explosion of interest in hemp-derived CBD products, but banks were still wary of opening their doors to hemp companies.
In fact, even those few that had accepted hemp industry actors as clients closed their accounts arbitrarily, putting their operations and very existence at risk. The concerns of access to banking services have even prompted Congress to include protections for the hemp industry in a bill due to be voted on to protect banks that do business with state-level marijuana companies.
The fact that Customers Bank hasn’t waited for the SAFE Banking Act to be enacted and has instead decided to unilaterally open its doors to hemp companies is a bold step that should be applauded. Other banks in Pennsylvania, such as Fargo Bank and Fleetwood Bank, revealed that they wouldn’t start doing business with hemp companies just yet, citing regulatory concerns.
Analysts are convinced that hemp industry players like Organigram Holdings Inc. (TSX: OGI) (NASDAQ: OGI) and SinglePoint Inc. (OTCQB: SING) look at the step taken by Customers Bank as a sign of better times to come since other banks will follow these early adopters in working with the hemp industry.
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