After all, growers across Maine have experienced financing troubles of the same sort — including difficulty finding banks and payment processors willing to do business with them.
Some found relief eventually through the few Maine financial institutions willing to work with them or through private financial backing. But several run without any financing at all, either because their operations are small enough not to need it or they never tried to obtain it in the first place because they presumed it was not an option.
It’s now legal to grow hemp, and a boom in commercial hemp farming is underway propelled by the popularity of CBD, which is extracted from the crop’s flower. But financing troubles persist as federal regulations and banking laws have yet to catch up with the burgeoning industry that involves growing a strain of cannabis that, unlike marijuana, has too little THC to get someone high.
The plight of Sheepscot — which garnered publicity earlier this year when it opened a pick-your-own hemp field — spurred Gov. Janet Mills and Agriculture Commissioner Amanda Beal to write a letter to the U.S. Department of Agriculture, urging the federal agency to finalize regulations that would make it clear how states could regulate hemp operations and how banks and insurance companies could do business with them.
A hemp industry publication reported late last month that the USDA had written regulations and that it was awaiting approval from the White House.
Nancy McBrady, director of Maine’s Bureau of Agriculture, Food and Rural Resources, said she had heard of three other instances in which hemp growers struggled with financing before she learned of Sheepscot’s struggle.
The bureau does not require prospective growers to have insurance or financing before they seek a state license, although McBrady said it’s “good business practice” to have both in place. The bureau does not recommend particular financial institutions, McBrady said, but refers growers who cannot find backing to other farmers for advice.
The state currently has 163 licensed hemp growers, according to the Department of Agriculture, Conservation and Forestry’s website. Several of them contacted by the BDN said they have struggled to find financing, and some have none at all.
Lisa Dulac, vice president of Green Herbs Medicinals, LLC in Poland, said private investors have provided funding. Another grower, Denise Rybeck of Maine Hemp LLC in Greene, said her operation is “extremely small” and does not require any additional financing. And two others, Mike Degou of Moose Valley Hemp in Caribou and Benjamin Edwards of Schoppee Farm in Machias, said they had not bothered to seek financing because they thought it would be “impossible.”
“We have had a seemingly endless string of struggles with banking and insurance,” Edwards said. “Simply keeping a checking account open and proper insurance coverage has proven challenging enough.”
Scott Funston of West Bath, who grows hemp with a business partner and runs a CBD business called Anoids, said he runs his business on a “shoestring budget” because he could not get financing for the hemp he grows after talking to four banks.
Patrick Wallace, who runs Headland Homestead in Durham, said he talked to five banks in the past year before he said Portland-based cPort Credit Union — perhaps the only financial institution in Maine that advertises its willingness to work with hemp growers and CBD businesses — issued him a debit card for his family’s farm.
cPort was also praised by Claire Stretch of Windham, who owns All Kind LCC. But she still struggles with finding a payment processor — a service such as Square or Paypal — that will process electronic payments for her hemp-related business. She said she has gone through three payment processing services in the past year alone for her hemp-related business. She’s gone through another three for her CBD-related business.
After being unable to find a bank that would work with her business, Sarah Hewitt of Victory Hemp LLC in Union, who has been farming hemp for CBD oil for three years, said she was able to set up an account with Bangor Savings Bank as long as the business only sold hemp in its raw form.
Finding a bank or credit line for her hemp-derived product line Victory Botanicals has been more challenging, Hewitt said. Like many farmers, she said she is watching the progress of the Secure and Fair Banking Act closely. The legislation, which has passed the U.S. House but has yet to pass the Senate, would allow financial institutions to work with state-licensed cannabis businesses.
Meanwhile, Maine hemp farmers might have a financial institution that’s willing to work with them coming online. Maine Harvest Federal Credit Union, which is preparing to lend exclusively to food producers and farmers, is not open for business yet, but CEO Scott Budde said the credit union would be “very interested” in working with hemp farmers.