Kat Merryfield was ready to share her farm-to-home oils, chocolates and creams with the rest of the country. But banks and credit card processors weren’t ready to work with her small business.

“We started out our website with PayPal, and it took about six months before they shut us down,” Merryfield said. “And then they seized our money.”

Merryfield could use QuickBooks to run credit cards over the phone, but it wouldn’t hook up to her website, katsnaturals.com. She tried Clover, another payment processor. Two weeks later, Clover shut her down too.

Kat Merryfield, right, answers questions about her organic hemp business, Kat’s Naturals, at the Southern Hemp Expo in Franklin, Tennessee, last month. | Stateline

All the while, Merryfield went from bank to bank, desperate for help. Online transactions made up most of her sales. But banks that welcomed Merryfield through the door lost interest once they learned of Kat’s Naturals’ main ingredient: hemp CBD.

Marijuana business owners in states that have legalized the drug, like Michigan, have struggled for years to access banking services, thanks to conflicts between federal and state law.

Now people who grow and sell hemp — a nonpsychoactive form of cannabis — are facing a similar set of problems. Although Congress legalized hemp last year, state and federal regulators are still trying to figure out how to test hemp to make sure it’s not marijuana and how to respond to the craze for hemp CBD, which is booming as an ingredient in wellness products.

Banks and credit unions aren’t sure how to serve hemp businesses while regulations are up in the air. So, many are staying away, and thousands of people who have leapt into the rapidly expanding hemp industry this year now have trouble getting bank accounts and accepting debit and credit card payments from customers.

Advocates say minority farmers and entrepreneurs find few avenues for participation and are especially vulnerable to predatory contracts with private investors.

Industry attorneys and entrepreneurs such as Merryfield, who is white, tell horror stories of hemp business owners paying high transaction fees or being dropped by their banks and payment processors unexpectedly.

“You’ve got money rolling in one day, and the next day you don’t, even though you still have customer demand and the ability to sell your product,” said Tyler Russell, an attorney with Ward and Smith P.A., in Raleigh, N.C. “But there’s nobody to clear your payments for you.”

Some in Congress are trying to help both cannabis industries with the Secure and Fair Enforcement Banking Act, or SAFE Act, which passed the U.S. House in late September with bipartisan support. The bill would assure banks and credit unions that they won’t be penalized by federal regulators for working with cannabis clients in states that allow marijuana or hemp production and sales.

The legislation, which the U.S. Senate has yet to consider, also would require federal banking regulators to issue guidance on how financial institutions should serve the hemp industry.

“My intent with the amendment is to create a very clear roadmap for a financial institution to kind of check off what they need to do in order to avoid any kind of legal scrutiny,” U.S. Rep. Andy Barr, a Kentucky Republican who wrote the hemp amendments, told Stateline.

Kentucky has emerged as a major hemp producer, with the state Agriculture Department approving close to 1,000 growers to plant some 60,000 acres of hemp this year. Barr said his constituents have complained about lack of access to banking services, particularly processing credit and debit card payments.

But some legal experts say the confusion won’t be cleared up until the U.S. Department of Agriculture, U.S. Food and Drug Administration and state agencies with hemp programs finalize their rules for hemp testing, labeling and sales.

“It’s not going to open all the doors to every bank and credit facility out there on Day 1 of becoming law,” Russell said of the SAFE Act.

What’s Legal?

Banks and credit unions face two legal issues in providing services to hemp businesses.

The first is the thin line between hemp and marijuana. The two Cannabis Sativa plants can look the same, smell the same and generate the same chemical compounds.

Last year’s farm bill defines industrial hemp as cannabis with up to 0.3% concentration of tetrahydrocannabinol, or THC, the compound in pot that creates a high. Cannabis with a higher concentration becomes, under federal law, marijuana — and therefore a dangerous drug.

That’s a big problem for banks, because financial institutions that serve marijuana businesses can be federally prosecuted for money laundering or financing criminal activity.

“Banks must have a reliable mechanism to distinguish federally legal hemp from federally illegal marijuana with extreme confidence,” the American Bankers Association told the U.S. Senate Agriculture, Nutrition and Forestry Committee in a July statement.

But the U.S. Department of Agriculture has yet to create a standard, so states have developed their own. In Oregon, for instance, the top 8 inches of plants are tested 28 days before harvest for THC; in Tennessee, a portion of the top third of plants are tested 30 days before harvest. Colorado only tests the top 2 inches of hemp plants.

The varying rules mean it’s possible for hemp grown legally in one state to be classified as illegal marijuana if it were sold in another. A USDA spokesman told Stateline the agency has submitted a draft rule to the Office of Management and Budget and expects to have regulations in effect for the 2020 planting season.

And while states require THC testing before harvest, they don’t necessarily track whether hemp products hitting store shelves are, indeed, made from hemp. In Oregon, where both hemp and marijuana are legal, hemp products can be sold by marijuana dispensaries or mixed into marijuana products to up their cannabinoid content.

Adding another layer of uncertainty, U.S. Food and Drug Administration officials have said many hemp CBD products are being marketed illegally and may be unsafe.

People are getting rich selling hemp CBD as a healthy extract people can eat, dot under their tongues, or mix into creams and rub on sore muscles. Yet the FDA has said CBD can’t be sold as a dietary supplement, because the agency has approved a cannabidiol-based drug and drugs can’t be added to the food supply.

FDA leaders have said they’re open to creating a path for CBD to be legally marketed but have yet to announce new regulations. “We’re looking to report on our progress by early fall,” agency spokesman Michael Felberbaum said in an email to Stateline.

All this legal confusion makes banks and credit unions nervous. “Financial institutions are always wary of serving a business that could be running afoul of the law somehow,” said Rachel Pross, chief risk officer for Maps Credit Union in Salem, Ore.

Banks and credit unions are also waiting to see if the federal government issues specific requirements for monitoring hemp accounts, Pross said. The former President Obama administration in 2014 issued guidance that has allowed banks and credit unions to work with marijuana clients.

“As a financial institution, we are legally obligated under the Bank Secrecy Act to report any activity that is suspicious in nature,” she said. “If you don’t have a lot of clarity around what the requirements are, it’s hard to monitor the account.”

Maps Credit Union, which is known for serving marijuana clients, has approved 54 hemp accounts. Bank staff closely monitor the accounts, just as they would any other accounts judged to be high-risk, Pross said.

Banks are eager to be a part of the burgeoning hemp industry, according to hemp industry attorneys. Trade groups that represent the banking industry have backed the Safe Banking Act, arguing that it will make it easier to serve cannabis clients.

“They want in,” said Joey Fuson, an attorney with Hemp Law Group in Nashville. “They want those CBD stores that have $20,000 to $30,000 a month running through their account. They just say they don’t have any regulations to follow, and they don’t want to be the ones to forge the path.”

‘The demand is insane’

For now, many hemp farmers are caught in the middle: growing and selling a crop that’s technically legal, but not quite legal enough to satisfy banks.

It took Bob and Joe Sudderth, father and son first-time hemp growers in Gallatin, Tenn., four banks before one was willing to set up an account. Bankers were turned off by their business name, Station Camp Hemp Farms, they said, but they wanted to keep hemp in the title.

In early September, weeks prior to harvest, Joe walked between rows of hemp crops checking the health of each plant. Bob Sudderth surveyed his acre of hemp for CBD — a $7,000 investment. “Hemp is our big gamble,” Joe said.

Some entrepreneurs are trying to tackle the payment processing problem. “The demand is insane. There’s thousands of businesses that need help,” said Brian Meyer, a co-founder and vice president of business development at Solvent. Solvent, a company founded earlier this year, is developing underwriting and compliance tools that can help banks serve CBD businesses.

And growers and hemp oil manufacturers are scraping by. Merryfield has devised a payment processing workaround by partnering with Direct CBD, an online distributor of CBD products that can take credit card payments. But she’s frustrated by the regulatory delays, which she says would help encourage fair business practices.

Without federal regulations and banking services, the work of the Tennessee legislature and state lobbyists to develop the hemp industry will be a waste, she said.

“I think we’re all groping around in the dark hoping something will solve these problems,” Merryfield said. “The farm bill, well, that protects the farmers, but without manufacturers, how are the farmers going to sell what they produce? We have to protect everyone in the supply chain.”

Whether you’re struggling with a health issue or your quality of life needs a positive boost, CBD could potentially help. Here are some ways to incorporate and use CBD-based products in your everyday life.

The cannabis plant itself is both medically and therapeutically beneficial, especially because of the wide variety of cannabinoids it contains. Although cannabidiol (CBD) and tetrahydrocannabinol (THC) are two well-known and widely used cannabinoids, according to one study, the cannabis plant contains over 400 chemical entities, and more than 60 of those chemicals are known as cannabis cannabinoids.

Despite the latter, specific compounds like CBD are extremely useful, especially in the treatment of different medical conditions and diseases. Since CBD is non-psychoactive, non-addictive, and medically beneficial, numerous people are attracted to it. Whether you’re struggling with a health issue or your quality of life needs a positive boost, CBD could potentially help. There are numerous ways to incorporate and use CBD-based products in your everyday life. Here are just a handful of suggestions.

Cannabidiol Delivery Methods and Ways to Use This Cannabinoid

Cannabidiol can be derived from both industrial hemp and the whole cannabis plant. However, individuals can reap CBD’s benefits regardless of where it was derived from. In general, there are numerous medicinal and therapeutic benefits that users can experience from consuming various CBD-based products. Thus far, studies have revealed CBD’s ability to treat different medical conditions, diseases, and illnesses, which has led to an increase of people looking into and using this alternative form of medicine. Also, CBD can improve one’s quality of life and well-being. Regardless of where you are in your life, you can benefit from consuming CBD.

In addition, there are different ways that CBD can be consumed, as well as the usage of various CBD products. For example, there are five main delivery methods that can be utilized, such as inhalation, oral, sublingual, topical, and transdermal administration. And there are numerous CBD-based products that can easily be incorporated into one’s life. Due to the variety of benefits cannabidiol contains, people consume this cannabinoid to improve their well-being and to achieve medicinal and therapeutic relief in their daily life.

Highly Recognized Medicinal Properties of CBD

People consume CBD for different reasons, but some of the cannabinoid’s most common and highly recognized medicinal properties include: analgesic, anti-anxiety, anti-depressant, anti-spasm, anti-epileptic, antiemetic, anti-inflammatory, antioxidant, neuroprotective, and anti-tumoral. CBD contains many more medicinal properties, but recently, these properties have been the reason for countless people consuming this cannabinoid: analgesic, anti-inflammatory, anti-spasm, anti-anxiety, and anti-epileptic. Aside from CBD’s medicinal properties, therapeutic benefits can be delivered too. Thus, regardless of your current state of being, different CBD-based products could be incorporated into your life.

Topical and Transdermal CBD-Based Products to Implement into Your Daily Routine

Regardless of the medical condition you have or the health issues you experience, CBD could be very useful. There’s not one particular product that works for everyone, which allows individuals to find CBD-based products that work best for them. Depending on the reasons for CBD usage, certain products may be more beneficial than others.

For instance, if your goal is to experience localized relief, it’s suggested to use a topical CBD-based lotion, cream, or ointment that can be applied onto certain body parts or joints that need relief. Generally, topical CBD products are ideal for relieving muscle soreness, cramps, muscle spasms, and neck, knee, or joint pain. Topical CBD products are increasing in usage for several reasons, but especially because they don’t deliver psycho-active effects since they seep into the skin’s pores rather than entering the body’s bloodstream. If you’re interested in using a topical CBD product, check out this lotion, which is produced and sold by a Colorado company called Infinite CBD.

Besides topical CBD products, individuals can use CBD transdermal patches.

Transdermal CBD patches are similar to nicotine and birth control patches in terms of where they’re placed on the body and the medicine that’s distributed throughout the body. These patches consist of an adhesive patch that’s infused with cannabis-based oils or cannabis-based isolates like CBD, THC, or a combination of them. Then, the patches gradually deliver the cannabinoid medicine through the body’s skin and via the capillaries, which permit the cannabinoids to enter the body’s bloodstream.

A 2003 study was conducted on the impact transdermal CBD patches had on rodents. It was found that the patches were successful, and they provided relief to the rats. Another similar study discovered that the transdermal application of CBD disallowed inflammation. Via transdermal usage, the active cannabinoid medicine doesn’t process through the body’s respiratory and digestive systems as compared to inhalation and oral consumption.

Also, transdermal CBD patches are convenient and easy to use, they provide a gradual release of relief, long-lasting effects, and they’re sold with pre-loaded doses of cannabinoids to provide users with more control regarding the quantity of medicine they’re taking. If you’re interested in trying this form of CBD, check out the patches sold by Mary’s Medicinals.

Oral, Sublingual, and Inhalation CBD-Based Products to Implement into Your Daily Routine

Oftentimes, CBD products are consumed orally via infused food and drinks. However, the effects take longer to kick in as compared to other methods. It’s important to know that oral CBD products enter the bloodstream while passing through the digestive system. For immediate relief, this isn’t the best option. To prevent pain and related symptoms from occurring, individuals can consume CBD-based oral products like infused capsules and infused gummies or other foods. If this is the route you want to take, check out Infinite CBD’s infused capsules and flavorful infused gummies.

Then, sublingual CBD administration is different than other methods because of how it’s consumed and its nearly immediate effects. To prevent and/or relieve anxiety, stress, or pain, many individuals use CBD sublingual sprays or droppers. The medicine is placed underneath the tongue, and the effects occur very quickly. Several CBD sublingual sprays and droppers are on the market, but you choose which one has the right CBD:THC ratio based on your needs, wants, and financial state. One popular CBD-based sublingual product is by Care by Design, which has a ratio of 18:1 CBD to THC.

Lastly, inhalation is another method that’s still used nowadays. Some people smoke high CBD strains whereas others vape instead. One study found that when one vapes, they absorb up to 33 percent of the total cannabinoids that are present in that product or cannabis strain. For health purposes, vaping is better than smoking because combustion is avoided. If you’re interested in experiencing a positive quality of life and well-being while putting your health first, consider checking out Infinite CBD’s vape juice that can be added into your favorite vaporizer. Or, you can purchase vape cartridges depending on your preference.

Overall, CBD has a non-addictive makeup, non-toxic properties, incredible safety profile, and a wide variety of medicinal and therapeutic benefits, which can be useful to anyone. If you’d like to improve your quality of life, well-being, and achieve much-needed relief, consider implementing a CBD-based product or two into your daily life. Leave a comment below about which CBD product you’d be willing to try and/or the success you’ve had with CBD products so far!

In June 2019, the Sunny Meadow Street explosion in San Diego that left three people badly burned sent shockwaves through the media. The reason behind the devastating detonation? An illegal attempt to produce a concentrated form of cannabis, known as hash oil or honey oil.

Hash-oil explosions caused by illegal operators have become more frequent across the U.S. and Canada, leaving a slew of serious injuries in their wake. Many don’t realize just how dangerous cannabis extraction can be. That’s why legal, state-licensed cannabis laboratories use sophisticated, high-tech systems to help maximize efficiency and mitigate risk. However, even for legal operators who practice their cannabis craft by the book, real hazards exist and significant safety precautions need to be taken to keep staff, consumers and community members safe.

In a high-risk line of work in an ever-changing industry, it’s important for cannabis companies to consider designating a safety and compliance manager to hold everyone accountable. These individuals will take the lead to develop and implement a comprehensive, customized safety and compliance program to address potential hazards, reduce risk, and improve overall efficiency.

So, What Are The Risks Exactly?

The most common injuries for cannabis workers include slips, trips, and falls, exposure to pesticides and other biological hazards, electrocution, improper handling of sharp objects, and cuts, among others. According to a Colorado cannabis workplace analysis by Pinnacol, a workers’ compensation provider, more on-the-job injuries spike in frequency between 10 a.m. and noon and the most expensive injuries occur at 2 p.m.  More injuries occurred in February and October versus any other month and, despite the industry-recognized 4/20 holiday, April marked the month with the fewest accidents. Of the workers surveyed, 38 percent were more likely to be injured within their first six months of employment.

It's not like cannabis companies are ignoring safety. For many companies, production managers are responsible for the supervision of the staff as well as the line and oversee all aspects of production, quality control, and inventory. But with so much on their plates already, it can be difficult for production managers to keep their undivided focus on worker safety. For this reason, it is important that cannabis operators take these factors into consideration and think about designating an individual who can dedicate their full attention to ensuring safety and compliance practices are carried out properly.

But even when a cannabis company designates someone whose sole responsibility is to lead safety and compliance initiatives among workers, it can be difficult to determine what areas need to be addressed first. Here are a few important steps for safety and compliance managers to consider:

Surveying the work environment. And identify and evaluate the hazards that pose the most risk to staff members. Take time to speak with upper-level management, representatives of every area of production, and legal resources. Once the high-risk areas of the workplace are determined, focus initial training and safety initiatives on addressing these areas first.

Establish a company culture of workplace safety. Make sure that workers at every level of management understand and reiterate the importance of safety practices within the workplace. Ensure that leaders within the company prioritize safety in their own practice and encourage workers their managing to do the same.

Use clear, concise messaging. To keep employees engaged and help them to retain important information, safety and compliance managers should through modern, customized approaches. Effective training techniques may include visual and hands-on methods, including videos, presentations, interactive polling and even funny memes. It may be beneficial to draw inspiration from parallel, yet more established industries such as brewing and pharmaceutical.

Communicate with outside experts. Widen your knowledge by communicating with other safety and compliance team members outside the company. Safety and compliance managers would benefit from communicating one another to fine-tune efforts and increase overall transparency within the industry.

In a transformative and growing industry, it’s important that cannabis companies make safety and compliance a priority and take proactive approaches to identify and address risks. While effective safety procedures and protocols are important in every industry, in cannabis it can mean the difference between safety and serious injury.

The MLB and its players union have discussed the possibility of loosening its testing on marijuana, according to the LA Times

This March, John Coyles, the MLB vice president of drug, health and safety programs, sent a memo to players about marijuana. He warned major and minor players alike that CBD, much as any other cannabis substance, was banned for baseball players. Echoing what the PGA Tour told golfers earlier this year, he said using CBD could elicit a positive drug test for marijuana.

“Claims of CBD products being ‘THC free’ are false and misleading,” Coyles wrote in the memo. “We have seen multiple positive drug tests…in the past year for THC that appear to have resulted from the use of CBD products, despite the product labels.”

He isn’t wrong, by the way. Last month, Ellipse Analytics tested 250 top-selling CBD products and found THC in 45% of them. Among products that labeled itself “THC free,” 21% of them were detected for THC. While baseball players don’t sustain the level of injury and inflammation as football players, they still need effective and safe pain management tools. What constitutes as safe and effective is under review, the Los Angeles Times reports, following the death of Angels pitcher Tyler Skaggs.

The toxicology report found that Skaggs had the opioids fentanyl and oxycodone when he died by choking on his vomit, as well as alcohol. Opioids and cannabis are listed as drugs of abuse under the MLB’s current policy. Though players undergo routine tests for performance-enhancing drugs, they don’t receive regular testing for drugs of abuse. But in the minors, players have stricter testing and this season 13 players were suspended after test revealed drugs of abuse in their system. However, 80% of those suspended were due to marijuana.

Now the MLB and its players union have discussed the possibility of loosening its testing on marijuana, according to the LA Times. What happened to Skaggs has also opened the possibility of teams testing players for opioid use (team doctors can’t prescribe players opioids). Currently the two sides are now discussing whether players could use cannabis following surgeries, or whether they could use it as general pain relief.

“The parties have discussed whether to loosen baseball’s restrictions on marijuana—not specifically as a trade-off for opioid testing, but as part of the annual review of the sport’s drug policy, according to three people familiar with the talks but not authorized to comment publicly on them,” reports the Times.