A Washington State (USA) natural clothing retailer has had its banking activities closed, again underscoring the challenges faced by companies that sell hemp-based products – and the conflation of non-THC industrial hemp with marijuana.
Rawganique.co, based in Blaine, Washington, received a letter from Umpqua Bank earlier this month abruptly terminating its two-and-a-half year banking relationship, the company said. Rawganique.co sells imported clothing, bedding and bath products made of organic hemp, linen and cotton.
“Banks are being unnecessarily and unfairly cautious, and small businesses are dealing with the consequences,” said Klaus Wallner, Rawganique’s co-founder, who attributes the closing of its accounts to hemp’s continued conflation with marijuana.
U.S. marijuana firms have struggled with banking issues since some states legalized its sale, with occasional spillover of problems for sellers of hemp-derived products.
Umpqua Bank justified the closure based on the fact that it has come under more rigorous scrutiny due to new Federal Deposit Insurance Corporation (FDIC) requirements and financial oversight, telling Rawganique in a letter that it “operates a business line that is an excluded line of business,” Wallner said.
In an open letter to Umpqua, Wallner informed the bank that “our hemp fiber products cross the U.S., Canadian, and many other countries’ borders everyday without any problems, because hemp products are legal at both the state and federal level and have always been.”
Following Umpqua Bank’s break with Rawganique, the company reached out to U.S. Bank, which refused to take its business based on a similar justification regarding the FDIC, the company said.