In the last couple of weeks, the League has begun working on a new issue related to legislation that would regulate hemp in Indiana. In the federal farm bill passed in December, Congress created a process for the federal government and state governments to regulate the production of hemp and, subsequently hemp-derived products like CBD oil. As a part of this process, a state must pass a regulatory scheme governing hemp production in the state and the plan must be approved by the USDA. SB 516 is Indiana’s effort at creating that regulatory framework. From this standpoint, the League has been monitoring the bill's progress with the hope that it will ultimately provide some clarity on how credit unions can proceed in offering financial services to business that sell CBD products or farmers who want to grow legal hemp.
Beyond that, the League has now had to actively lobby for a change in the legislation as it left the Senate. During the Senate debate, law enforcement representatives brought up concerns about something called “smokable hemp” that is very difficult to differentiate from marijuana. As a result, the Senate added language that would make it a criminal offense to possess, grow, or distribute “smokable hemp.” The problem is, the legislation also makes it a criminal offense to finance the production or distribution of “smokable hemp.” Consequently, the League has been working with the Indiana Bankers Association (IBA) to pass an amendment to the bill that would exempt financing from financial institutions from this criminal provision.
While it is, of course, not likely that a credit union would knowingly or intentionally finance the production or distribution of an illegal substance, we are concerned that a credit union financing a farm operation growing legal hemp or a convenience store selling legal CBD oil might inadvertently get caught up in a criminal investigation if the farm or business changed what it was doing and began producing or selling “smokable hemp.” SB 516 is scheduled for a hearing in the House Agriculture Committee on April 4 and we expect our amendment will be approved.