Bank Confuses Industrial Hemp With Marijuana, Shuts Down Rawganique's Account

On October 5th, 2017, we received a letter from Umpqua Bank abruptly terminating our 2.5 year banking relationship. Because we sell imported clothing, bedding, and bath products made of hemp fiber, Umpqua has determined that Rawganique “operates a business line that is an excluded line of business,” meaning we are being falsely associated with the marijuana industry (which is a highly regulated industry despite being legal in many states). 

Industrial hemp is in fact a different plant than marijuana, but the two are often associated under the generic term “cannabis.” Cannabis refers to the plant genus that both hemp and marijuana varieties originated from. As our co-founder Klaus Wallner explains, “ is an organic hemp, linen and cotton clothing company. We don’t have anything to do with marijuana. That’s why this whole situation is so befuddling to us. Industrial hemp is NOT the same as marijuana. Industrial hemp contains ZERO psychoactive THC.” 

In an open letter to Umpqua, Wallner said “Our hemp fiber products cross the US, 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.” The company has been operating for 20 years and doing business with Umpqua for over two. Despite the obvious lawfulness of our commerce, Umpqua has lumped Rawganique in with the marijuana industry. 

Wallner points out in his letter that hemp seeds and hemp oil are found in all sorts of products, “like Nature’s Path’s cereal products, Dr. Bronner’s Castile Soap (which has hemp oil as a main ingredient), protein bars, and hemp clothing,” yet the bank accounts of grocery stores and clothing stores are not being terminated. 

Our team has now taken it upon ourselves to shed light on this issue. “We have always assumed it’s common knowledge that hemp is different than marijuana,” Wallner said,” and that hemp is in fact a very useful, versatile and important plant.” We plan to use our unfortunate circumstances to educate the public and increase our efforts to spread awareness about industrial hemp.

Since the letter from Umpqua arrived, Wallner has reached out to other banks with local presence to find alternatives. So far, our business has been refused by U.S. Bank on the same grounds. Banner Bank has deferred our inquiry for need of more information. Wallner asked the director of sales at Umpqua, 'Why now? We have had an account in good standing with your bank for over two years.” Their response was that they are now under more rigorous scrutiny due to new FDIC requirements and financial oversight. Banks are being unnecessarily and unfairly cautious, and small businesses are dealing with the consequences.

It doesn't make sense for banks to single us out. We sell hemp fiber clothing, shoes, bed, and bath products, none of which can be smoked or used to get high.

We would like to thank the eco-friendly, sustainability, organic fiber, and hemp communities who have already shown Rawganique immense support on social media, with many expressing disbelief and outrage at the misinformation that still surrounds industrial hemp. After all, hemp is not marijuana. Hemp is food, fuel, medicine, building material, clothing, shoes, paper, and so much more. 

We plan to continue spreading awareness and voicing our advocacy for the industrial hemp industry. If you feel the need to help, please like, comment, and share our social media posts: 

Banking Termination Letter from Umpqua Bank

An Open Letter to Umpqua Bank

Our story has already been shared on three news platforms, The Northern Light, HempToday, and What's Hemppening. Please like, comment and share these articles: