What the Farm Bill Means for Hemp Legalization

Oct 4, 2019

The monumental Agriculture Improvement Act of 2018 (simply known as The Farm Bill) was signed into law on December 20, 2018. For the first time ever, a cannabis product was removed from the Controlled Substances Act. Yes, industrial hemp is now legal and it will be treated as an agricultural product. The change is so dramatic that the legislation is known in some circles as the 2018 Hemp Farm Bill and Hemp Bill 2018.

What is Hemp?

Hemp is botanically the same species as marijuana, yet is lacking its most common cannabinoid, tetrahydrocannabinol (THC), which provides a well-known psychoactive effect. Depending on the variety, THC levels in marijuana can reach up to around 30%, while THC levels in hemp are less than 0.3%. This lack of THC is why hemp has historically been used for industrial purposes like making rope, sails, paper and clothing. Although THC is not prominent in hemp, CBD is. CBD is a non-psychoactive cannabinoid that interacts with receptors in the immune system and central nervous system to provide medicinal benefits. It is used successfully to treat a variety of ailments, disorders and diseases such as chronic pain, anxiety, insomnia, epilepsy and depression.

What does the 2018 Farm Bill Do?

Prior to the passage of the 2018 bill, it was legal for states to establish pilot programs to grow and study hemp on a limited basis to try and gauge the market for hemp-derived products. Currently, the bill allows for broad hemp cultivation and makes it legal to ship hemp-derived products across state lines for commercial purposes. It also removes the restrictions on the sale, transport or possession of hemp-derived products.

As you might expect from a federal bill, there are restrictions and conditions. The law does dramatically expand the potential for hemp production but it does not create a system that allows hemp to be grown by just anyone. With the 2018 Farm Bill hemp cultivation without a license is against the law. Growing hemp with THC content above 0.3% is also a violation of the law. Within the bill is language outlining potential punishment for repeat offenders. States will be heavily regulated; there is now a shared federal and state regulatory authority that handles hemp production and there are specific steps that states must take to develop regulatory plans to submit to the federal government for approval. State departments of agriculture must consult with the state's governor and chief law enforcement officer to devise a plan to submit to the Secretary of the USDA for approval. If states decide not to develop their own regulatory program, the USDA will implement a regulatory program under which hemp growers in those states must comply.

What is the Future for Hemp Farmers?

Hemp can be used in so many different products that the potential market is huge. Hemp fibers are used in fabrics, insulation, paper, textiles, yarns, carpeting and construction materials. Salad dressings and cooking oil can contain hemp seeds. Hemp seeds can also be crushed to create hempseed oil that is used by the cosmetic industry and included in shampoos and soaps. Legislators at the state level are aware of the potential and are addressing various policy issues such as how they will define hemp, license growers and regulate and certify seeds. As of today, there are 41 states that have now enacted legislation to establish industrial hemp cultivation and production programs. Additionally, since hemp grows very quickly and easily compared to many other crops, farmers can grow it on the side as a type of insurance product in case something goes wrong with their primary harvest.

What are the Challenges Ahead for Hemp?

In the U.S. hemp is still very new and as with any new product, there are issues related to how it will be branded, how markets will be developed, how it will be sold and how it will be regulated. There may be demand for products made with hemp and farmers growing hemp but that doesn't mean that farmers can easily get the product to a processor and then to the public. At the end of the day, there are many aspects that need to be developed to create a dependable and commercially viable supply chain.

There is also the issue of extracts from hemp being sold and marketed as CBD when, in fact, they do not have the same medicinal elements as CBD. Conversely, there is the lingering issue of CBD's legality. When it comes from marijuana, CBD is classified as a Schedule I controlled substance under the country's Controlled Substances Act (CSA). When it is derived from hemp, it is considered legal and not covered by the CSA. How these differences will be monitored and regulated remains to be seen.

Another question mark deals with crop insurance. As defined in the 2018 Farm Bill, a producer who gets a portion of revenue from hemp is still eligible to participate in the Whole Farm Revenue Protection Plan (a federal risk management safety net for all commodities on a farm under one insurance policy). But if a farmer has insurance on hemp and it is found to be over the 0.3 THC limit and the crop has to be destroyed, will the farmer receive compensation?

The 2018 Farm Bill and hemp have a complicated relationship. The removal of hemp from the Controlled Substances Act and the labeling of hemp as an agricultural product are excellent advances but there is still a great deal to do in terms of integrating hemp and hemp products into the marketplace and continuing to research the plant to better understand all of its components and qualities. It will remain a highly regulated crop and is yet another issue that finds state governments and the federal government struggling to move forward in unison.

What do you think of the Farm Bill? Have you integrated hemp into your life yet? Tell us in the comments below!