“Nature does not hurry, yet everything is accomplished.” ~ Lao Tzu
The buzz you hear around the 2018 Farm Bill, that's the sound of the hemp industry coming alive.
It is an exciting and historic development that the 2018 Farm Bill removes hemp (i.e., Cannabis sativa containing 0.3% THC dry weight or less) from the federal list of controlled substances. This forever redefines hemp as an agricultural commodity.
State Agencies of Agriculture are staffing up; they will play the part of local rule-maker, regulator and enforcer.
The rise of innovation, production, and sales of hemp and hemp products is upon us. As America's newest ag-based economy gears up, we celebrate hemp's reformed legal status. Unfortunately, we can't yet cheer its complete emancipation.
We've come a long (long) way, and not to take anything from the epic drive that got us here, hemp is still going to be a highly regulated crop in the wake of the 2018 Farm Bill.
For years, hemp insiders have been playing the long game to legalize hemp. And then in mid 2018 came a surge; when US Sen. Mitch McConnell inserted language from “his” 2018 Hemp Farming Act into the Farm Bill. This was the path forward to reach the elusive goal of hemp legalization. And it was anything but clear-cut.
The US House and Senate played back and forth Farm Ball all year long. Well into the 4th quarter (of 2018), it began to look like Congress would run out the clock on the $867 billion legislation.
By November, suspense was building around this 807 page behemoth that included - as a footnote - hemp’s future as an ag commodity.
Following a year of incessant gridlock in DC, and the threat of yet another government shutdown, you just had to ask yourself, “How’s It Going To End?”
And then, wow, Merry Christmas! We got a Farm Bill and a partial government shutdown. Hemp industry players and elected officials celebrated (the Farm Bill, that is), while Congress pointed fingers at each other over the shutdown. And everyone headed home for the holidays.
Truth is, when hemp was finally dropped from the Most Wanted list of dangerous drugs, it wasn't so much a surprise for the hemp industry as it was a cause for great relief and jubilee. Hallelujah!
[author's note: Not sure how a non-psychoactive plant made it on the Most Wanted list in the first place? Click here to find out.]
What does the Farm Bill actually do for hemp agriculture, research and product development in the U.S.? A lot, it turns out.
I've identified seven key provisions in the new law that will have an immediate and lasting impact on the growth of the US Hemp industry. Unfortunately, one of them leaves a lot of people out.
There are several other administrative rules not covered below. If you're up for it, you can dive into the deep-end here.
Are we ready? Let’s take a closer look.
First the Good News
#1 – ALL parts of the cannabis hemp plant are now legal
The 2018 Farm Bill establishes a clearly defined and broad definition of hemp that covers all parts of the Cannabis plant, whether growing or not. This includes the viable seeds, "extracts", "derivatives", "cannabinoids", etc., as long as THC levels do not exceed 0.3% by dry weight.
Since cannabinoids are included in the definition of hemp, it is 100% clear that hemp-derived CBD is not a controlled substance. However, CBD products and producers are still subject to FDA regulations, and the 2018 Farm Bill doesn’t change that. (More on CBD and the FDA coming up).
#2 – Funding hemp businesses just got a whole lot easier.
With hemp removed from the Controlled Substances Act, the change in hemp’s status will mean that federally regulated institutions such as banks, merchant services, e-commerce sites and even advertising platforms (i.e., Google, Facebook, LinkedIn, etc.) - are now free to engage commercially with hemp product companies. The money is on the table.
In addition, the Farm Bill paves the way for the USDA to award federal grants for hemp research and the development of hemp products. We can expect to see land grant universities and other educational institutions that access federal funds taking more interest in supporting hemp R&D.
#3 – The USDA is now the sole federal agency to oversee hemp cultivation. State organized programs just ahead.
Good-bye Drug Enforcement Agency, you never belonged here in the first place.
The States and Tribal governments now have the responsibility of regulating hemp production and the sale of hemp products within their boundaries (in conjunction with USDA oversight).
Within a year, all States who propose to foster the research, cultivation and marketing of hemp are required to submit their plan for regulating their programs to the USDA.
Alternatively, States may choose to adopt USDA’s criteria “to monitor and regulate” hemp production within that State, rather than draft their own plan.
Thus, a producer in a State that doesn’t have a hemp plan could legally grow hemp by obtaining a USDA hemp license (unless the State has prohibited hemp cultivation).
A State plan, and/or the USDA hemp program plan, must include:
#4 – Hemp is now eligible for federal Crop Insurance.
This is huge. The 2018 Farm Bill adds hemp to the definition of “agricultural commodities” that can be insured, including after the crop has been harvested. Hemp crops grown for research are also insurable, under a provision that waives marketability requirements for the insured crop. These provisions give the farmer a familiar 'vehicle' to reduce various risks of taking on a new crop, which removes a significant barrier to entry.
#5 – Hemp and agricultural hemp products can be transported freely in the US.
All restrictions to interstate commerce of hemp or hemp products have been removed. The 2018 Farm Bill prohibits any state from interfering with the legal trade or transportation of cannabis hemp in the U.S. This is true whether a particular state has an active hemp pilot program or not.
For instance, Ohio doesn’t allow for the production of hemp in their state (I'm not picking on Ohio, but it's true). So in the case of hemp seeds, flowers, stalk, or products being transported through the state ... Ohio State Troopers stand down.
#6 - THC occurring in hemp is excluded from the definition of a controlled substance.
Section 12619 (p. 529) of the Farm Bill not only removes hemp from the definition of “marihuana” (sic), it also excludes THC in hemp from the definition of a controlled substance. Interesting.
Interpreting this section brings up a variety of questions and potential complications. For instance, if you are a CBD processor who is creating an isolate from a high-CBD variety of hemp, aren't you also building a supply of naturally occurring, concentrated THC as a ‘by-product”?
This rule sounds complicated for the CBD processor, who would now possess isolated THC that is by definition, not a controlled substance.
However, last time I checked, THC from any other source is a controlled substance. This provision should lead to some curious developments. Stay tuned.
#7 – Persons with prior felony convictions need not apply
Individuals with prior felony convictions involving a controlled substance must wait 10-years following the date of their felony conviction, before being permitted to participate in hemp production.
Make no mistake, this is a punitive act on a lot of good people who are going to be left out until it’s remedied. These men and women who have already done the time, have every right to participate in the growth of a legal industry involving an agricultural commodity.
I predict this provision will soon be challenged, or taken up and amended in future legislation. Let’s hope so.
There is one exemption; that is, anyone with a prior drug felony who was participating in legal hemp production before the 2018 Farm Bill took effect, is off the hook from the 10-year restriction and will be “grandfathered” into the new program(s).
But if the "exempted individual" registered in their state's hemp program practices "willful negligence” - they are thrown out of the hemp producers club for good.
Why is it the law is still treating hemp as a gateway drug, and hemp growers as potential dope dealers? Sounds like the DC law enforcement lobby is paranoid. What are they smoking down there?
References & Credits
1/17/2020 08:25:42 pm
Good information and will definitely keep the industry booming. Financing and insurance alone is a huge step. Thanks for all of the research and sharing.
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I'm Netaka, friends call me Tak ("tock"). I write from Vermont and curate Tak About Hemp.