Kentuckians have a deep interest in the production, cultivation and sale of industrial hemp and hemp derived products. Maybe our enthusiasm for this crop is rooted in the Commonwealth’s history. The Great Compromiser, Henry Clay, recognized the potential of hemp and grew it to make rope and bagging. Or, perhaps it’s because we recognize the enormous opportunities the industry provides for entrepreneurship and job creation. Either way, it’s clear, the hemp industry in the Commonwealth is booming.

Much of the growth of the industry occurred under the Industrial Hemp Research Pilot Program, established by an amendment to the 2014 Farm Bill, which I supported and allowed states to grow and cultivate low-THC non-intoxicating cannabis, or industrial hemp, for research. Since the program’s enactment, the number of approved acres in Kentucky increased from 922 in 2014, the first year of cultivation, to over 50,000 in 2019. In 2018, sales of hemp products were 3.5 times more than the previous year.

Despite the success of the pilot program, in many cases, regulators failed to give financial institutions the certainty they needed to offer banking services to legitimate hemp businesses. To address this issue in the last Congress, I introduced the Industrial Hemp Banking Act, legislation that would have established a safe harbor for depository institutions providing credit and other banking services to qualifying participants under the pilot program.

Last year, Kentucky’s congressional delegation successfully led the effort to include hemp legalization in the reauthorized Farm Bill, also known as the Agricultural Improvement Act of 2018. That legislation, which was signed into law on December 20, 2018, successfully defined industrial hemp as low-THC cannabis and removed it from the Controlled Substance Act.

However, following the de-scheduling of hemp, the industry remains subject to similar and, in some cases, more significant challenges than it faced under the pilot. Industrial hemp growers, producers, and retailers continue to struggle to access to financial services, including bank accounts and card processing. This is because federal financial regulators often conflate illegal marijuana with legal industrial hemp and hemp-derived products and continue to apply undue scrutiny to financial firms providing banking services to the hemp industry.

For example, just last month, a major card processor closed all cannabidiol (CBD) merchant accounts, effectively ending access to payment services for legitimate hemp businesses across the Sixth District.

As a member of the House Financial Services Committee, I have prioritized the need for Congress to intervene and resolve this problem. In addition to my efforts last Congress, I have continued to put pressure on regulators to clarify the legal status of hemp and its eligibility for banking services.

In a hearing last month, I questioned FDIC Chairman Jelena McWilliams and the other financial regulators about actions they were taking to ensure that legal hemp businesses in Kentucky have access to banks and card providers. I further urged them to release a unified statement clarifying that, unlike marijuana, industrial hemp is legal under both state and federal law, and therefore eligible for financial services. I will continue to push regulators to provide banks and credit unions the clarity they need to offer their services to legal hemp businesses in Kentucky.

Moreover, since meeting with various constituent businesses, card processors, and financial institutions, I have been working across the aisle with Congressman Ed Perlmutter (D-CO) to find a solution to alleviate these issues. I have authored amendments to the SAFE Banking Act that would reinforce the legal status of hemp and hemp related businesses while also requiring financial regulators to honor the Congressional intent of the 2018 Farm Bill.

With the rapid expansion and success of the industrial hemp industry, Kentucky farmers and entrepreneurs have drawn upon our proud agricultural heritage to adapt and meet modern demand. I am proud to fight for these hardworking and innovative Kentuckians, and I will continue work to ensure that legal hemp businesses have unfettered access to the banking system and markets across the country.