On December 20th, 2018 the 2018 Farm Bill was approved and signed by President Trump. The 2018 Farm Bill makes significant changes to previous regulations governing Industrial Hemp and its derivatives. With the passing of the 2018 Farm Bill, industrial hemp has been re-scheduled and it is now legalized at the federal level which will lighten regulations governing CBD production and distribution.
The Bill amends the definition of Hemp which allows it to be more broadly regulated than it was under old legislation. The Bill maintains Hemp’s definition as: the plant Cannabis sativa L. and any part of that plant whether growing or not with a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on dry weight basis. However, the Bill alters the definition to include all parts of the Cannabis sativa L. including seeds thereof and all derivatives, cannabinoids, extracts, acids salts, isomers, and salts of isomers.
Further, hemp is now exempt from the definition of marijuana allowing Hemp and Marijuana to be classified as separate types of cannabis. This bifurcated classification allows hemp and CBD producers to negotiate banking contracts that have been nearly impossible for cannabis businesses to obtain. Hemp producers can now also insure their crops, which provides broader business protections for hemp farmers and their crops. This is huge news for the industrial hemp industry as the Bill broadens state and tribal hemp programs, which will allow more farmers to produce industrial hemp than were allowed under previous legislation.
The Bill still gives authority to states when considering the legality of hemp and its derivatives, but they are not allowed to interfere with the distribution of CBD even if the state has not legalized hemp production. States that wish to have an industrial hemp program must submit plans to the USDA for approval prior to implementing such plans. State plans are required to establish regulations that stipulate the land where hemp can be cultivated and procedures for testing hemp and disposing of non-compliant hemp. States must also outline how they propose to enforce violations of the 2018 Farm Bill.
The new Bill does develop standard penalties for violating industrial hemp regulations. Non-negligent violations will be given up to two years to remediate the problem. If an industrial hemp producer negligently violates a state or tribal plan more than three (3) times in a 5-year period, then they are ineligible to produce hemp for 5 years beginning on the date of the third violation. This gives Hemp Producers a reasonable chance to become compliant without being severely punished for inadvertent mistakes. However, repeat offenders can face criminal convictions if they remain non-compliant.
While the Farm Bill legalizes hemp and its derivatives production and distribution, it does not change the FDA’s stance that CBD is not approved for use as a dietary supplement or food additive. Accordingly, any producer of CBD must be careful when marketing the benefits of CBD in their products and for now CBD is not federally approved to be used in food or beverages.
The 2018 Farm Bill is a large feat for the industrial hemp industry. It broadens the federal regulations surrounding industrial hemp and its derivatives which include one of the most sought-after commodities this year, CBD oil. Further, it will appease banking and insurance obstacles for hemp producers, which will offer protection over allocated funds as well as crop failure.
The Farm Bill’s passing is also a huge step forward for the cannabis industry as a whole. The passing and signing of the Bill indicates the federal government’s willingness to reconsider outdated legislation relating to cannabis, and offers some hope that the current administration may offer similar concessions to non-Hemp cannabis moving forward.