26 SEPTEMBER / OCTOBER 2018 GR SUMMIT Dax Denton Senior Vice PresidentGovernment Relations Indiana Bankers Association ddenton@indianabankers.org @ibagovrelations Bank Customers and CBD Oil A complex issue for Indiana banks Banks in many states nationwide face increasing challenges related to the legalization of marijuana or its products. To date, 21 states have legalized the use of marijuana for medicinal purposes, and another nine states now allow recreational use. Additionally, a handful of states have legalized either the sale or consumption of a derivative hemp called CBD oil, with certain guidelines in place. Indiana recently joined this list of states with the passage of SEA 52. The legislation permits the sale and use of CBD oil, requiring that the product contain a THC amount lower than 0.3 percent. The problem for the banking industry is that THC, no matter the amount, remains an illegal substance under federal law. It is expected that federal regulators still view it as illegal, despite changes to state law. Legalizing the sale of CBD oil in Indiana brings challenges to Indiana banks regarding customers connected, even tangentially, to the business of selling the product. This problem is not new, as many lenders doing business across state lines (Michigan, Illinois or Ohio) have been encountering the same situation for years, as other states have enacted legalization laws. Unfortunately, no clear answers currently exist. However, Krieg DeVault LLP has prepared a memo, “Banking Marijuana-Related Businesses,” at the request of the Indiana Bankers Association. This detailed memo may serve as guidance as you navigate the complexities of this issue; access is provided through the information box below. Absent some type of congressional action, new state laws permitting the sale and use of marijuana and CBD oil will continue to present a thicket of problems to lenders. As we continue to monitor this issue, we ask that you please send us questions about the specific challenges of marijuana-related banking issues. These will prove useful in subsequent conversations with policymakers moving forward. You may email your questions to me at ddenton@indianabankers.org, or please call at 317-387-9380. HB “Banking Marijuana-Related Businesses” is a detailed memo prepared by Lori Jean, a partner with Krieg DeVault LLP. To access, click on the hand icon in HB Digital, or email a request to: ddenton@indianabankers.org Krieg DeVault Memo
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