Legal and Regs

Finding Clarity in the Gray Area of Delta-8 Banking

Written by Anthony DiMeo

The presence of Delta-8 in the marketplace has certainly been a wild-ride for the last few years. Even to this day, an official determination of Delta-8’s federal legality is still not clear. For Delta-8 producers, this constant uncertainty has made the goal of securing transparent and sustainable banking or lending seemingly impossible.

The 2020 Interim Final Rule, an addendum to the 2018 Farm Bill that made CBD derived from hemp federally legal, further expounded on the Farm Bill by declaring that synthetically-created tetrahydrocannabinols be treated as Schedule I controlled substances, but did not specifically restrict Delta-8. Because Delta-8 is actually synthesized from legal, hemp-derived CBD, therein lies the current federal gray area status. Another intriguing factor of Delta-8 production is that Delta-9 waste (which is still federally illegal THC) can be used to create Delta-8 as well. If any of this seems confusing to the public, it’s no surprise that the hesitation of banks to provide producers with financial backing and online payment processing of Delta-8 and CBD products is commonplace in the market due to the high-risk. With the reality of the federal government having the ability to shut down not only a business operation, but a bank or financial institution for even just incidental connections to federally illegal cannabis sales, any determination from the powers-that-be stating that Delta-8 is not actually legal from
one side can be detrimental.

In a real-time market data study conducted by FINCANN via the Bank Branch Locator Database in June 2021, researchers found that “the amount of federally-insured, fully-compliant and industryfriendly banks working with cannabis industry purveyors to be at 212 total– which is roughly 4% of all national and local banks in the entire U.S.” Despite lending a hand to Delta-8 and CBD merchants, account termination is still a very-real possibility should any of these bank’s policies be further reviewed or altered down the road.

However, the fact that such cannabis/CBD/Delta-8-friendly banks do actually exist gives hope. Sites like FINCANN (The Cannabis Banking Authority) do the work as one-stop resource for evaluating potential client relationships between producers and any of the aforementioned 212 compliant and sustainable banks, while also providing factual analysis based off of market research and financial data.

Until federal legalization clears up all of this confusion, Delta-8 producers can take solace that such firms and a handful of others like it, can provide a glimmer of clarity within such a gray area that continues to overshadow the current market.

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Anthony DiMeo

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