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#2226985 - 12/09/19 02:51 PM CBD
Littlebug Offline
New Poster
Joined: Mar 2006
Posts: 24
One of our branch managers opened an account for the sole purpose of selling CBD products, specifically hair and skin products. From my understanding, in Connecticut, where all of our branches are, CBD is legal as long as the THC is less than 0.3% and is derived from hemp. My problem with this account is that we have not decided as an institution if and when we will be banking CBD/Hemp/Cannabis. At this time my program states that we are not opening accounts that relate to the legal medical marijuana industry. Management is fighting with me, stating that if we continue to monitor this account we should be okay because the CBD products are not being ingested. I disagree since we have no EDD process at this time (prior to the account being opened), which should be in place before these types of accounts are entertained.

Am I crazy or should this account be closed ASAP???

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#2226986 - 12/09/19 03:05 PM Re: CBD Littlebug
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,632
I don't know that the account has to be closed as keeping it is really a management decision. However, keeping it would absolutely elevate your risk of examiner scrutiny, especially since your policy doesn't seem to address due diligence or BSA management for such accounts. The problem with CBD is that it is difficult to know if it is being produced and/or sold legally, because the rules are still new and are also fairly complex. For banks that make a strategic decision to bank CBD customers, I would expect a clear/detailed policy statement on such accounts and a detailed CDD and EDD/monitoring program for such accounts.
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.

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#2226989 - 12/09/19 03:16 PM Re: CBD Littlebug
Littlebug Offline
New Poster
Joined: Mar 2006
Posts: 24
Thanks Adam Witmer, I appreciate your input!

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#2230442 - 02/06/20 10:32 PM Re: CBD Littlebug
JennKK2 Offline
Gold Star
Joined: Nov 2006
Posts: 263
" …..At this time my program states that we are not opening accounts that relate to the legal medical marijuana industry. …."

I only ask this for further clarification but medical marijuana and hemp are two different elements banks need to consider, correct?
so based on your question I would assume the CBD products your new customer is selling is marijuana derived?
plan your Work and Work your Plan

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#2230470 - 02/07/20 03:35 PM Re: CBD Littlebug
TryingtoComply Offline
Diamond Poster
Joined: Apr 2013
Posts: 1,965
The West
We use a questionnaire for hemp-related accounts and perform CDD before opening. We have had to decline several accounts as the business websites included supplements for human ingestion.

For the account that you already have, I would do due diligence to see what you find. Your policy/procedures should be updated to indicate how you will handle HRBs.

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#2230517 - 02/07/20 06:03 PM Re: CBD Littlebug
Andy_Z Offline
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Joined: Oct 2000
Posts: 27,503
On the Net
I'm in the camp with JennKK2, CBD/Hemp/Cannabis may be related, but are different.

This may be the bank's opportunity to spell out the differences and determine what it will do for legal entities/customers dealing in legal products, or to as a policy say these are similar to (as an example) MSBs in that there is more work and risk than the bank wants to accept and to refuse all such accounts.

I see less risk in CDB products, labeled and periodically tested. Hemp may be acceptable, depending on the status of the product. I understand that if it's being grown and the crop is what you're depending on, the weather and water it gets can make it usable or not as it can take on properties that remove it from the hemp category (I may be over simplifying this, I was never an ag banker).

A question for the bank is, what are you comfortable with and do you want any part of the market or not. Having one account may be a good test of what resources will be needed.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#2241333 - 08/20/20 02:38 PM Re: CBD Littlebug
SmallBank3 Offline
Joined: Nov 2019
Posts: 57
I know this is a bit older but I'm wondering why ingestible is a sticking point versus only topical applications when banking a business that sells CBD products? Would it be different if it were ingestible hemp oil versus ingestible CBD? We are reviewing possibly banking a hemp processor whose products include a food additive so I'm curious what specifically we need to be looking out for?

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#2241336 - 08/20/20 02:43 PM Re: CBD Littlebug
rlcarey Online
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Joined: Jul 2001
Posts: 79,675
Galveston, TX
Ingestibles have to be FDA approved.
The opinions expressed here should not be construed to be those of my employer:

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#2241344 - 08/20/20 03:46 PM Re: CBD Littlebug
ColoradoAML Offline
Gold Star
Joined: Mar 2018
Posts: 290
I'd recommend reviewing this, especially 9 and 10, as part of your new customer consideration.

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