Based in Ontario, Oregon, Treasure Valley Extraction is a hemp production company owned by Jim Hutchens. The Oregon native recently received the upsetting news that U.S. Bank closed six of his accounts. His conclusion is that the accounts were closed because his company produced hemp-derived CBD oil. In an era where many banks still shy away from the hemp and cannabis industries, Hutchens’ assumption isn’t far off.
When the business owner went to the bank for an explanation, he was met with a vague answer. His accounts had been closed for “cause.” The situation brings attention to the complexities of banking within the hemp industry, because cannabis still remains illegal at the federal level, banks often avoid working with cannabis and hemp companies. U.S. Bank did not make any public statements on the matter.
“I think this is discrimination against our industry,” Hutchens said to Malheur Enterprise. Yet if this is the case, his circumstance is a peculiar one since his company processes hemp, which has extremely low levels of THC. Hutchens’ company even strives to “provide a premium hemp CBD oil product that can improve health and lifestyle,” as shared on the company website. Production of hemp is in fact legal and has been considered a commercial crop since 2018 thanks to the 2018 Farm Bill. Hemp contains 0.3 percent or less of THC, according to the bill.
It’s possible that the bank is waiting for the United States Department of Agriculture (USDA) to finish implementing the policies of the Farm Bill. The Agricultural Marketing Service within the USDA is currently developing guidelines for how states can propose plans for hemp cultivation. The U.S. Food & Drug Administration also has a role to play overseeing hemp production in the country. However, without a clear answer from U.S. Bank, the possibility of discrimination still remains in consideration.
“Imagine trying to run your business and your bank says we are going to shut you down. It affects us when we do payroll,” said Dave Eyler, partner of Treasure Valley Extraction. “It is inconvenient and expensive.”
“I think this is discrimination against our industry.”
Hutchens has now turned to a credit union to handle his banking needs for the company. Just last month, The National Credit Union Administration (NCUA) provided guidelines on banking within the hemp industry. Acknowledging the Farm Bill and the hemp industry’s potential for expansion, the administration stated that providing services to companies in the industry was more than okay since the crop had been legalized for industrial production.
“Lawful hemp businesses provide exciting new opportunities for rural communities,” said NCUA Chairman Rodney Hood in the August press release.
Because both hemp and CBD oil offer a plethora of benefits, it’s important that business owners continue production with the support of banks. Hemp itself can be used in topical products, clothing, textiles and is often a more eco-friendly option compared to other materials. With the hemp industry rapidly growing in Oregon, expanding companies will need a reliable banking system to keep up with the growth.