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Investors: Treasury Dept. rules will buoy hemp in the U.S.

Updated: Oct 22, 2021

buoy hemp in the U.S.

This week, a subdivision of the U.S. Department of the Treasury has unveiled new guidelines for how it will approach violations of hemp regulations which have industry insiders excited about potential growth.

The Treasury’s Financial Crimes Enforcement Network, or FinCEN, recently announced that members of the hemp industry under scrutiny by the agency will receive equal treatment along with all other businesses.

Industrial hemp and CBD have been legal in the U.S. since 2018, but large financial institutions have been reticent to offer cannabis businesses loans and other financial assistance because of fears of being associated with the industry.

Early miscommunications and mixed signals from the U.S. Food and Drug Administration also hampered the growth of the promising sector of the economy.

Long-term prohibition against cannabis has tainted banks’ views of working well with CBD and hemp farmers, processors and retailers, Market Watch reports.

Still, CBD is not the same as marijuana. It doesn’t intoxicate its users and thousands across America love to use it for their chronic pain, anxiety, inflammation, arthritis and a number of other problems and it forms the basis of a rapidly growing commercial area.

Luckily, this change of regulatory posture from the Treasury will likely give hemp entrepreneurs a shot in the arm as they continue to navigate foggy, difficult-to-follow rulesets like those laid out in the Banking Secrecy Act and other laws FinCEN oversees.

"These guidelines help clarify how hemp should be treated and operate in the banking space. This is an important move by the US Department of Treasury in support of the American hemp industry," Hemp, Inc. CEO Bruce Perlowin told Market Watch.

"A lot of the hurdles that the hemp industry faces come from stigma and misinformation; in the past that has informed policy. Fortunately, the power and promise of hemp is coming to light in the mainstream and we are gaining lots of support from everyday people, regulatory professionals and policy makers.”

According to Investing Daily, four criteria laid out by the Monday FinCEN statement would allow regulators to view CBD and hemp businesses as “suspicious,” and they are otherwise strictly instructed to treat them the same as any other company.

These criteria include if the company is marketing CBD in states where it is explicitly illegal, if they are using their business as a front for marijuana sales or laundering money from marijuana sales or if the business cannot prove it is properly licensed.


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