A few weeks ago, Sheepscot General Store and Farm in Whitefield was making headlines for its innovative "U-pick hemp," a crop that was legalized under the 2018 USDA farm bill. Now the story is one of uncertainty as the family farm finds itself in limbo with its bank and its insurance company both planning to drop the farm.
It should be an exciting time for a farmer: the moment when the farm starts to recoup a bit of its investment. But that’s not the case for Ben And Taryn Marcus right now. They have got buyers interested in 1500 plants in their drying shed, and they've also got a problem.
First, the farm's insurance company, Acadia Insurance, announced it would not be renewing any of the policies held by the farm or store. Then the farm's lender, Camden National Bank, told them they could no longer do business together.
“Basically they called us on a Friday afternoon and let us know they were going to have to close our accounts,” says Ben Marcus. “Our cash account and our loan accounts. Basically made it sound like we were gonna be getting a check on Monday, and ‘good luck to you.’"
Ben Marcus says the bank has since walked back that threat — at least partially. He says they received an apology from Camden, and were assured that the farm's loan accounts will remain safe. But because hemp is a strain of cannabis sativa, which, federally, is considered an illegal drug, current banking rules meant to crack down on related money laundering and crime put their cash deposit accounts at risk.
"We have not been issued any guidance by our federal regulators as to how we can bank with these companies, these farmers," says Renee Smyth, chief marketing officer with Camden National Bank.
Smyth says she cannot comment on any specific customer accounts, but she says Camden National wants to work with hemp growers, and she thinks that will be possible if federal legislation makes it through Washington.
"We are currently waiting on the Safe Banking Act, which passed in the House 321-103 and is heading to the Senate,” Smyth says. “In that current regulation, as it stands now, it instructs the federal banking regulators to issue guidance to financial institutions regarding the legality of hemp and hemp-derived CBD products."
Ben Marcus says he understands that the bank and his insurance company may feel that the liability is too much, but he says insurance companies and banks should not have been caught off guard. The initial framework making hemp legal was put into the 2014 farm bill. Those provisions were further expanded in the 2018 farm bill, with the state licensing more than 170 farms to grow it.
"They knew this was coming down the pipeline. It's been in the spotlight all season long,” he says. “To not even mention it until we're harvesting our crop and marketing it is absurd. There's no excuse for that."
He also says it seems that the anti-crime banking rules regarding cannabis and cannabis products are being unequally applied.
"There're CBD products in just about every store you go into. So where are they drawing the line?"
The upheavals also mean uncertainty for the Marcuses' employees. Store manager Penny Moshier says she's worried about losing liability insurance, and access to financial services.
"Electronic transfers, the payroll is direct deposit,” Moshier says. “I mean, we need a financial institution that's going to be dynamic and can work for us."
Options do exist for the financing and insuring of hemp businesses, but Ben Marcus says they tend to be more expensive, and he says the farm has been trying to draw a distinct line between marijuana, which is psychoactive, and their product, which is not.
Meanwhile, the Marcuses’ situation has not gone unnoticed by customers at their store.
David Chase of Whitefield says he is rethinking where he puts his money.
"The Camden National is my bank, and so I did just text them and tell them that we're on the rocks as far as I'm concerned,” Chase says. “I mean if I have money in the game, which I do with the bank, I don't want it misused, and apparently it is being misused on my neighbors."
It's not clear how long the Marcuses will be allowed to bank with Camden, or whether the Safe Banking Act, which has strong support from independent U.S. Senator King, will pass in time to help them.
Acadia Insurance released a written statement saying it does not publicly comment on underwriting decisions related to individual policyholders. It goes on to say that "In newly emerging industries, prudent underwriting requires that we carefully analyze and evaluate the risks and applicable laws and regulations associated with providing insurance to the emerging industry."
The Marcuses have less than a month to find another insurer.