Is Hemp Legal After Farm Bill 2018? We Answer All Your Questions
On December 20th, 2018, President Trump signed the 2018 Farm Bill and passed it as law. Generally speaking, the passing of the Farm Bill has been well-received, having won overwhelming support in the U.S. Senate.
According to Google Trends, interest in the topic surged during the week of December 16th. Everyone from health product manufacturers to medical experts, politicians, and even the citizenry at large have weighed in about the impacts it will have on the industries they work in and their lives.
Let's take a look at the Farm Bill of 2018 at a high level and then dig a bit deeper into your burning hemp and CBD questions:
- 2018 Farm Bill Summary
- 2018 Farm Bill Changes - Key Areas
- Changes In Hemp Regulations
- Introduction to the De-scheduling of Hemp Manufacturing
- Is Hemp Manufacturing Legal Now?
- Is Hemp Legalized at Both State and Federal Levels?
- What Business Opportunities Will Be Created After Hemp Is Finally Legalized?
- What Is CBD?
- What Does the Future Look Like for the CBD Market Starting in 2019
2018 Farm Bill Summary
As the name suggests, the Farm Bill is a piece of legislature focused solely on farmers and ranchers and the industry they populate. First introduced in the early 1930's, a new farm bill has followed every five or so years since. These bills typically touch upon the various aspects of the agriculture industry including commodities, research, nutrition, trade, credit and more. The most recent one – the 2018 Farm Bill - while covering a lot of agricultural industry-related ground, is particularly significant in its own right because of the landmark decision to remove hemp from the controlled substances act and classify its growth for commercial use.
2018 Farm Bill Changes - Key Areas
Here are the 2018 Farm Bill Changes that along with hemp deregulation have proven significant:
- Hemp regulations revisited
- 2018 Farm Bill spending estimated to be at $867 billion from 2018-2028
- More convenient opportunities to switch between Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs
- Increase in marker loan rates
- Base acres no longer eligible for crop support
- Eligibility of family members for farm support expanded to nieces, nephews, and first cousins
- Working land programs given a complete remodel
- Growing cover crops encouraged
- No Supplemental Nutrition Assistance Program (SNAP) work requirement changes
Changes in Hemp Regulations
As I mentioned earlier, the ruling regarding hemp is one of the more significant outcomes of the Farm Bill’s amendments in 2018. Hemp can now be cultivated, processed, and sold as an agricultural product. Hemp seed doesn’t naturally contain THC (tetrahydrocannabinol, the main psychoactive agent in cannabis) - or at least such minute amounts as to be negligible - one of the primary reasons why the Senate passed the bill to deregulate its production for industrial purposes.
As part of the Farm Bill 2018, industrial hemp cannot contain any more than trace amounts of THC – 0.3% being the upper limit for THC content.
Hemp, as the non-psychoactive cousin of Marijuana, has been essentially legalized through this Bill, a move that activists have been demanding for years now.
Introduction to the De-scheduling of Hemp Manufacturing
While hemp may finally have been legalized through 2018 Farm Bill amendments, the journey to this endpoint began with the 2014 Farm Bill. Hemp Pilot programs were introduced in the previous Farm Bill in a section titled ‘Legitimacy of Industrial Hemp Research’, which first recognized that hemp is, in fact, not the same as marijuana. This allowed institutes of higher education and state departments of agriculture to pursue the research of the benefits to be derived from hemp as part of these pilot programs.
Is Hemp Manufacturing Legal Now?
The big question though is this – is hemp legal? Well, the Farm Bill clarifies that hemp can now be traded as an industrial product rather than a being deemed a controlled substance, and can even be freely transported across state borders. So yes, hemp legalization has been recognized at a federal level. It is legal.
Is Hemp Legalized at Both Federal and State Levels?
The Farm Bill also states that individual state governments could regulate the growth of hemp in their individual jurisdictions, though states cannot restrict the movement of hemp if it is entering state borders as part of its transportation or shipment. Furthermore, according to the 2018 Farm Bill, hemp can still be interpreted and controlled under the purview of government agencies such as the FDA, DEA, FTC, and TTB as per their individual assessments.
So while hemp production may not be completely unrestricted based on the state you reside in, the shackles have well and truly come off.
What Business Opportunities Will Be Created After Hemp Is Finally Legalized?
According to the infographic published by CanadaHempFoods.com, the passing of the Farm Bill has opened up the following hemp business opportunities:
- The hemp industry can use banking and financial services including credit cards and payment processors among other things.
- There are no restrictions on capital inputs and investment in this space anymore.
- As mentioned earlier, hemp can be traded across state borders legally.
- Even convicted felons will be allowed to partake in hemp-related ventures 10 years after the passing of the bill.
- Crop insurance will be made available for hemp farms, a convenience that wasn’t available before.
- Similarly, for the first time ever, there can also be a trade of hemp futures which should provide some price stability to those carrying out hemp farming.
- Further research into hemp and its benefits will be allowed more widely, allowing for more testing to see how effective it is in the medical industry, in the nutrition industry, and in terms of health and wellness in general. The growing interest in CBD (cannabidiol) and its benefits will throw open doors to new business opportunities.
Based on this, expectations for the hemp industry have skyrocketed. Some expert forecasts peg the industry to reach as much as $20 billion in value by 2022.
What Is CBD?
A cannabis compound that unlike THC does not bring about “stoned” feeling, in fact just the opposite, as it has shown reduce THC’s psychoactivity. It is being studied for its benefits:
- Supports a healthy mood
- Promotes cognitive health
- Pain management properties
- ... and much more!
The following is a podcast I recorded that explains the science of CBD in more detail:
What Does the Future Look Like for the CBD Market Starting in 2019?
In terms of using hemp-based cannabidiol or CBD business opportunities, while the federal government isn’t putting up any barriers, a recent announcement from the Food and Drug Administration has put the dampers on proceedings. Here are the permanent sections from FDA commissioner Dr. Scott Gottlieb’s communications on the subject:
- “Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds.”
- “We’re aware of the growing public interest in cannabis and cannabis-derived products, including cannabidiol”
- “We treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of the source of the substance, including whether the substance is derived from a plant that is classified as hemp under the Agriculture Improvement Act.”
Additional notes:
- As of this writing, the FDA's position is that it is still not legal to sell CBD as a dietary supplement.
- CBD-containing food and health products still need clear FDA approvals.
- Hemp-derived food products though have been given a more benign GRAS or Generally Recognized as Safe rating.
However, this bill is expected to open doors for the CBD market because now this CBD can be extracted from hemp, and making hemp legal will definitely have a positive impact on the CBD market size.
This statistic shows the total U.S. consumer sales of CBD (cannabidiol) from 2014 to 2016, and estimates until 2022, in million U.S. dollars. It is estimated that in the year 2020 CBD consumer sales will total around 1.15 billion U.S. dollars.
— Jason (@jsn0105) August 9, 2018
Source: https://t.co/kuO6twjuyH pic.twitter.com/cBrCnQQi3o
Furthermore, legalizing hemp will also encourage more and more CBD market research into the benefits of this compound, which has already shown promise in multiple medical applications. Legalizing hemp is only the first step, and promises a more progressive outlook towards CBD as well.
