At Uncas Farm in Whitefield, farmers Teryn and Ben Marcus looked forward to a new cash crop this fall, only to be caught up in a nightmare scenario involving the intersection of newly legal hemp farming and desperately needed financial services.

The Marcus’ held a pick your own hemp harvest at their farm in early October. Their marketing of the event paid off, including a spot on WGME-13, but the extensive coverage was followed by some serious problems. A few days after the event, they started getting letters.

On Friday, Oct. 18, the Marcuses’ bank informed them their $12,000 loan, for a produce cooler they had ordered but not yet received, was being called in.

A few days earlier, their insurance company gave them notice their policy would be rescinded Nov. 19. The loss of insurance on their farm, their Sheepscot General Store, and their home could cause their mortgage to be called in, Teryn Marcus said.

The Marcuses said both changes occurred because the couple raised a legal hemp crop on three acres of their 180-acre farm. “We don’t think this is right,” Teryn said. She said she was sure it was a mistake, so she called the insurance company as soon as she got its letter. “We thought they believed we were growing marijuana,” she said. “But they didn’t. They knew it was hemp, and they knew hemp was legal,  but they said they couldn’t serve us anymore.”

That’s because there are still no federal guidelines on how to handle hemp. Some of the issues may be resolved when new hemp draft guidelines are published in the Federal Register, according to United States Department of Agriculture Undersecretary Bill Northey.

The draft rules, in process since hemp and marijuana were legally severed from each other last December as part of the 2018 Farm Bill, include guidance for farmers about issues such as acceptable tetrahydrocannabinol, or THC, content. Marijuana is regulated under the United States Drug Enforcement Act, but as of last year, the USDA regulates hemp. Hemp and marijuana are the same species, cannabis sativa. But there are differences in the plants, based on the types of seeds grown, weather conditions during the growing season, and other factors, according to USDA. Marijuana is still federally illegal, under Schedule I rules, which also criminalizes drugs such as heroin and cocaine. Hemp, on the other hand, is legal, but the harvested crop has to be tested to make sure it hasn’t made the jump from benign hemp to federally illegal marijuana before it can be sold.

For a product to be legally hemp, it must contain less than 0.3 percent THC, the psychoactive ingredient in marijuana that produces its characteristic euphoric highs, Northey said. If a crop contains more, outside of a small uncertainty factor, it is considered marijuana and must be disposed of.  Sometimes a farmer can do everything right and still get marijuana, Northey said, especially if the weather is unfavorable. He said certain seed types work better for different areas in the country, but farmers must know the risks they face in raising this crop.

Hemp was historically grown for its fiber, which was used for fabric, rope, and paper; in recent years, a substance in hemp flowers, cannabidol, or CBD, has been added to tinctures, rubs, and chews for the treatment of ailments such as insomnia, anxiety, pain from arthritis in humans and animals, and migraines. This is the end product most growers want, because the market for it is exploding, Teryn Marcus said.

Wiscasset Newspaper contacted the businesses Teryn told about. The insurance company said it did not answer questions about policyholders. The bank also said it would not answer questions about individual customers, but a spokesman said because the bank is federally chartered, it has to follow federal rules, and as of now, there are no federal rules in place.

The Marcuses fell into the gray area by raising a crop before the federal rulemaking was completed, even though it was entirely legal when they bought the seeds, planted them, and harvested them.

The draft USDA rules for hemp do not mention private banking or insurance. Some crop insurance programs will be phased in for the 2020 growing year, according to the USDA website,  and some loans will be available through USDA, but no wording in the draft document prohibits private banks or insurers from disqualifying farmers based on the crops they are growing.

With that in mind, U.S. Rep. Chellie Pingree (D-Maine) sponsored the Secure and Fair Enforcement Banking Act, or SAFE Banking Act, which allows hemp and marijuana businesses access to the regular banking system. The bill easily passed the House, and is waiting for Senate approval with about 350 other House-approved bills. The SAFE Banking Act was referred to the Senate Committee on Banking, Housing, and Urban Affairs on Sept. 26. “Maine’s hemp industry will be hampered by uncertainty until this bill passes,” Pingree said.

Learning about the Marcus’ situation, as well as other hemp growers in Maine facing the same problem, Gov. Janet Mills wrote to Secretary Sonny Perdue of USDA asking that rules be finalized on behalf of the growers who have already raised a crop and are finding themselves facing possible ruin because there has been no federal guidance. She said the state passed an act to amend hemp laws, and directed Maine Department of Agriculture to implement the state’s plan until further information is available from the USDA.

The Marcuses have received offers from other financial service companies that may be able to help them get through until USDA’s rules go into effect and the banks and insurance companies take notice. Their insurance broker told them she thought she could get them covered, but the price might be higher than what they had been paying, Marcus said. They received an offer from one bank, but it was so far from their farm that it would require a courier to take the cash to the bank.

Marcus said they are very busy right now, but not in the ordinary harvest-time way. “We have to spend our time trying to line up a bank and an insurance company,” she said.