Nebraska’s Governor says the state’s ability to help the fledgling industrial hemp sector is limited to the current system of approval of pilot projects and associated permits, and there’s not too much more that the state can do to help with economic development funding that may be available to other industries.
In Scottsbluff, Western Farms Seed Company has a pending LB840 application with the city, as well as limited private financing for their hemp seed production project. Until just recently, federal regulations barred financial institutions from providing services to the industry under old guidelines in which industrial hemp was still classified as a scheduled drug. The 2018 Farm Bill de-listed hemp from the schedules, and just this past week federal banking regulators issued new guidance that would ultimately help clear the way for banks to begin working with hemp producers.
Pete Ricketts tells Rural Radio News the state’s Department of Agriculture is poised to help clear the way for production ramp-up next year pending federal approval. “What we can do at the state, though, is make sure we get our rules and regulations published and our plan put with USDA so we can get those approved as quickly as possible going into 2020, so everybody knows what those ground rules are,” says Ricketts. “We’ve established what our permitting program is going to be and we expect USDA will sign off on our plan; obviously there will be time with USDA on how quickly they can turn that around.”
Ricketts says the financing situation for hemp producers has been complicated by states such as Colorado with legalized marijuana, just one of many growing pains that can be anticipated as hemp production begins in Nebraska and elsewhere. Under the new federal guidance issued Dec. 3, the Federal Reserve told banks as long as a customer involved with industrial hemp productions was operating under a USDA, state or tribal regulatory plan, it would be the financial institution’s business decision on what services and products to offer to those customers, and such businesses would be subject to the standard Suspicious Activity Reporting as any other banking consumer.
Even with the federal guidance, Legislative staffer Mitchell Clark in Senator John Stinner’s office tells Rural Radio News there will still be changes in Nebraska law that need to take place before banks could potentially offer financing to hemp producers. Clark says for example, the state regulations on securities that can be listed to secure a loan will need to be updated first.
Western Farms has an open house scheduled for Thursday afternoon from 4 to 6 p.m. at their facility on Avenue B in Scottsbluff so the public can get a better understanding of their project and how it could provide an economic boost to the area in the future.