Hemp farmers struggle with rejection from banks, social media ads
Industrial hemp is a burgeoning new business in New York, with a wide variety of uses, from food to beauty products and even building material. But farmers in central New York are having difficulty obtaining normal banking services, even after the 2018 federal farm bill legalized hemp across the country.
Allan Gandelman is the owner of Main Street Farms and New York Hemp Oil in Cortland. About 40 acres of the farm is dedicated to growing hemp, which is in the same Cannabis family as marijuana, but contains under 0.03% THC, so it can’t get you high. The company has been rejected by several banks, credit card processors and a payroll company from doing business, before eventually landing with a credit union.
“It was really difficult because when you’re trying to run a business and you can’t have a bank account, it doesn’t really work," Gandelman said. "We can’t run payroll, there’s nowhere to make deposits, people are writing us checks. It was a really scary moment there, that we might not be able to continue functioning.”
If they could invest more in their company, Gandelman said they would expand their processing operations.
"Not having access to capital means we can’t scale our processing business as fast as we would like,” Gandelman said. “What’s going to happen this season, and we’re already getting these phone calls and seeing it, farmers in New York don’t have enough processors to help them with the harvest. Without access to capital to buy more equipment, we can’t speed up our processing side of our business.”
On top of that, Dan Dolgin co-founder of Eaton Hemp in Madison County, which makes organic hemp seed snacks, said Facebook and Instagram won’t allow the marketing of hemp products.
“And it’s frustrating because we have all the lab results, we have everything we need to show that we’re totally legit," Dolgin said. "There’s no THC. This is a product that’s legal throughout the United States."
Banks and other companies might be refusing to provide services to the hemp industry because of confusion over the legal status. While visiting Main Street Farms on Monday, Sen. Charles Schumer (D-NY) said he’ll push federal regulators to issue new guidance to banks to confirm the legality of hemp and related products. The hope is once banks are comfortable, social media and the rest will follow.