The latest news about CBD hemp businesses are here:
- New guidelines mentioning how hemp businesses can get federal loans has been released by USDA .
- Massachusetts’ state hemp plan has been approved by USDA.
CBD News Stories
- Guidelines For Hemp Businesses To Receive Federal Loans Are Released By USDA
- Massachusetts’ State Hemp Plan Is Approved By USDA
New Guidelines For Hemp Businesses To Receive Federal Loans Are Released By USDA
A document has been released by the US Department of Agriculture (USDA) with guidelines for providing direct and guaranteed loans regarding hemp
These guidelines on hemp have been updated gradually in different programs and services to comply with 2018 Farm Bill, which legalized the hemp federally.
The agency wrote in a memo to state office,
“While it’s understood that this new commodity will likely produce some servicing challenges because of State and Federal regulations, it should be treated as closely as possible to any other agricultural commodity and serviced in the same manner,” wrote the agency in a memo to state offices.
The memo goes on to provide details about servicing in general, as well servicing direct and guaranteed loans.
Loans will begin being serviced by the Farm Service Agency (FSA) in 2020, and only licensed hemp producers will be eligible, including those operating under the 2014 Farm Bill.
Borrowers growing without a license will be considered in non-monetary default and losses will not be covered.
Licenses cannot be transferred under any circumstances.
For both direct and guaranteed loans, a contract is required that indicates four key points:
- provide for termination based on objective “for cause” criteria only
- require that the grower be notified of specific reasons for cancellation
- provide assurance of the producer’s opportunity to generate enough income to develop a cash flow budget and repay the loan, and
- be issued by a purchaser that has a reasonable and realistic prospect of fulfilling the contract.
For those requesting loan servicing, the FSA needs to see Farm Business Plans that “reflect realistic performance assumptions under current conditions for specific situations, including but not limited to:
- increased input costs by region
- intended use of hemp being produced (CBD, fiber, seed, grain, etc.)
- increased income for organic production
- changes in unit numbers and weights
- quality levels if production is for CBD
- other relevant factors that affect net income.”
FSA will conduct routine servicing on each type of loan.
Review the memo in full here.
USDA Approves Massachusetts’ State Hemp Plan
USDA approved the hemp plan of Massachusetts this week, increasing the total number of approved state plans to 17.
Other states that have been approved include Delaware, Florida, Georgia, Iowa, Kansas, Louisiana, Montana, Nebraska, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Washington, West Virginia, and Wyoming.
USDA has been gradually approving state plans and said that it “continues to receive and review hemp production plans from states and Indian tribes.”
The agency has so far approved plans from 42 tribes.
Plans that are currently under review are from Hawaii and the US Virgin Islands.
Seven states are in the process of drafting their hemp plans for USDA approval or resubmitting their plan: Arizona, California, Connecticut, Illinois, Nevada, Oklahoma, and Tennessee.
Eighteen states are choosing to grow under the 2014 Farm Bill provisions for one more growing season: Alabama, Alaska, Arkansas, Colorado, Indiana, Kentucky, Maine, Maryland, Minnesota, Missouri, New Mexico, North Carolina, North Dakota, Oregon, Utah, Vermont, Virginia, and Wisconsin.
