Jan 31

Loans and banking restrictions

4 comments

One of my biggest concerns with hemp production is the barriers to entry, particularly with banking regulations. I have been reading a lot on the proposed rules in Illinois, in addition to federal guidelines, and I am not convinced that we as producers will be protected. Where is everyone going to get their business loans, and how can I go about getting started in this industry? I have access to land and agricultural resources through a family row-crop operation, but my major concern is discrimination in funding by banks because I am wanting to produce industrial hemp.

 

I would appreciate any input or ideas from other members, and I look forward to hearing your thoughts.

Hi, Becca

 

I wanted to look into your concerns and I found an article that is on the Carolina Cannabis News website written by Rhiannon Fionn. https://carolinacannabisnews.com/will-the-2018-farm-bill-help-with-hemp-banking-issues/ I'll have to study it in detail later but it looks like it contains a good chunk of information that will at least confirm your concerns if not address them. I'll read the full article and do some further research so I can make a blog post about this later. Thanks for starting the discussion!

Besides being a new Hemp Farmer, I am also the Director of the IL Small Business Development Center in Dixon, IL (www.sauksbdc.com). We do have one local bank who is bnaking for hemp businesses (www.saukvalleybank.com - contact Jamie Gisi jgisi@saukvalleybank.com 815-632-4480. However, keep in mind that farming for hemp is BRAND NEW to us in the USA. That means that everyone, and I mean everyone, is still trying to figure it all out. I read an article today about a farmer who planted 5 acres of clones and 1/2 were male. Regardless to say, he lost his entire crop. So, whether you are planting for fiber, seed, or flower -- banking, crop insurance, and the like are difficult things to price and insure. Once we have some experience under our belt you will see these services expand and free up. You will also see the prices come down as risk is more predictable. Corn, Soy, and other row crops have long histories and the standard deviation on yields, estimates on weather and trade impacts can be somewhat predicted and priced into the process. However, hemp is so new, we have no idea how it will grow on your land, how your processes will work out for you, will you be able to access and manage the labor required, etc. etc. So, our number one recommendation is if you are approaching a bank or insurance agent, spell out all the risks and explain your plans for mitigating each of them. Good luck -- and feel free to request an appointment with your local IL SBDC to help you put a plan into place.

I am in the same position as becca.95, I have inherited a family farm in Whiteside County, Illinois. I am looking to use some of the acreage to grow hemp. I also live out of state, and didn't know if it would be better to lease the acreage. I know what is being paid in NC for land lease for hemp, but didn't know if anyone in Illinois is even looking to do this yet.

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