CannaTrac CEO on Federal Agencies' Relaxed Financial Services Rules for Hemp-Related Companies-- CFN Media
Seattle, Washington--(Newsfile Corp. - December 23, 2019) - CFN Media (OTCQB: CNFN), the leading agency and financial media network dedicated to the North American cannabis industry announces the publication of an article covering Farm Bill banking clarification for hemp-related businesses, and CannaTrac's innovative payment solution.
To view an enhanced version of this graphic, please visit:
To say finding financial services has been difficult for cannabis and hemp companies in recent years is a gross understatement. For many, even understanding regulations has been arduous at best. A lack of continuity in regulations between states and federal laws has traditional banks steering clear of the industry for fear of backlash, but that doesn't need to be the case with the new hemp laws, according to the industry financial services experts at CannaTrac Technology.
In December 2018, the Agriculture Improvement Act of 2018 (aka 2018 Farm Bill) was signed into law, legalizing hemp at the federal level at the start of 2019. Still, banks remained distant and cautious because of murky regulations. Earlier this month, five government agencies unitedly clarified policy for financial institutions with regards to hemp-related businesses.
"They've removed some of the archaic processes for banks in tracking accounts for companies dealing with hemp," said Thomas Gavin IV, Vice Chairman and CEO of CannaTrac, in a phone conversation with CFN Media. "Now that hemp is no longer federally scheduled alongside marijuana, some requirements have been eased, which is terrific for our industry."
CannaTrac specializes in financial services in the cannabis/hemp space. The Chicago-based company offers a suite of services for financial institutions as well as its industry-leading cashless mobile payment systems solution branded CannaCard that benefits retailers and consumers alike.
Why the Hesitancy for Banks?
Although they look essentially identical, hemp and cannabis have a major differentiating factor. Specifically, hemp is a non-intoxicating version of Cannabis Sativa, meaning that it contains zero to negligible amounts of THC, the compound in cannabis responsible for the "high." Having no psychoactive effect along with many industrial, cosmetic and potential medical uses underscored hemp being removed as a Schedule I drug under the Controlled Substance Act with the passage of the 2018 Farm Bill.
While cannabis is legal in 33 U.S. states and Washington, D.C. for either medical or recreational uses, it remains a Schedule I narcotic and illegal at the federal level. The federal designation means that the majority of banks don't want to touch money stemming from cannabis operations.
Hemp being a cousin of cannabis has muddied the situation for banks there also. Without traditional banking services, companies operating in either the hemp or cannabis markets (or both) have been forced into all-cash models.
This is a highly inefficient and unsafe practice that companies have been coerced into.
Apropos, a partnership between Pacific Banking Corp and CannaTrac addresses this obstacle by allowing licensed retailers to apply for the CannaCard system and traditional banking services at the same time.
What the Agencies Said
On December 3, the governing bodies looked to provide some clarity about changes in banking services with the 2018 Farm Bill. In a statement, the group - consisting of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors - did just that, writing:
"Because hemp is no longer a Schedule I controlled substance under the Controlled Substances Act, banks are not required to file a Suspicious Activity Report (SAR) on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants."
The agencies also said that it remains up to a state's or tribal government's discretion to allow hemp operations regardless of the legal federal status.
Rob Nichols, President of the American Bankers Association, applauded the regulatory guidance, calling it "long-sought" while particularly pointing out that the onus for complying with regulatory requirements is on bank customers in the hemp industry and not the bank serving those customers.
"Effectively, hemp-related companies aren't being singled out anymore," said Gavin. "To that point, financial institutions from the Fed's purview can service these companies and need only to act in accordance with policies that they would for their other customers as allowed by local laws."
The guidance further made it clear that all federal regulations regarding marijuana businesses have not been affected in any manner and that all policy outlined in prior years remains intact with cannabis remaining a Schedule I drug.
Most strongly believe that someday there won't be an all-cash model for marijuana companies, whether it comes in the form of new banking laws, de-scheduling of cannabis or outright legalization of the plant. It's going to be a slow change, considering it took nearly a year for some clarity on financial services in the hemp space.
Currently, CannaTrac stands head and shoulders above the crowd with its CannaCard system and is being rolled out in states where marijuana is legal, including the massive California market. The company is in the process of a $15 million capital raise to fuel its tremendous growth opportunity in the US and internationally, as it prepares to become a publicly traded entity.
"While we are a leading player in the cash-only cannabis world today, we're also thinking three steps ahead," commented Gavin. "We have our model competitively priced with today's conventional card services, which will give us an edge as the established name brand in the business when full marijuana legalization occurs in the future."
In the face of an industry-wide shakeup, the outlook of the cannabis financial markets remains positive according to some industry experts. Take Terry Patton, Founder and Chairman of CannaTrac, a financial markets veteran, for example. He agrees wholeheartedly with Danny Moses of The Big Short who was quoted in a recent interview as saying "I've never seen a sector have the political tailwinds, the economic tailwinds, and the wellness tailwinds that this sector potentially has…" Patton further added, "In my years of experience, when people are flocking out of the market, this has often been the greatest opportunity for the steadfast investor to take advantage of lower price points of entry in growth companies to accumulate wealth."
Click here to read the full article: https://www.cannabisfn.com/cannatrac-ceo-on-federal-agencies-relaxed-financial-services-rules-for-hemp-related-companies/
About CFN Media
CFN Enterprises Inc. (OTCQB: CNFN) is the owner and operator of CFN Media, the leading agency and digital financial media network dedicated to the legal cannabis industry.
For Visitors and Viewers
CFN Media's Cannabis Financial Network (CannabisFN.com) is the destination for savvy investors and business people profiting from the worldwide cannabis industry. Viewers will see breaking news, exclusive content and original programming involving the people, companies and investments shaping the industry.
For Cannabis Businesses & Companies
CFN Media is a leading agency and financial media network dedicated to the cannabis industry. We help private, pre-public and public cannabis companies in the US and Canada attract capital, investors and media attention.
Our powerful digital media and distribution platform conveys a company's message and value proposition directly to accredited and retail investors and national media active in the North American cannabis markets.
Since 2013, CFN Media has enabled the world's preeminent cannabis companies to thrive in the capital and public markets.
Learn how to become a CFN Media client company, brand or entrepreneur: https://www.cannabisfn.com/become-featured-company/
The above article is sponsored content. CannabisFN.com and CFN Media, have been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: http://www.cannabisfn.com/legal-disclaimer/
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/51043