Legal Hemp In The USA: What The 2018 Farm Bill Means For US Hemp

The United States just legalized hemp.

Pres. Donald Trump signed the Agriculture Improvement Act of 2018, better known as the 2018 Farm Bill, earlier today. This omnibus bill includes numerous programs and policy changes, not all of which are related to agriculture. For hemp supporters and industry professionals, it’s a cause for celebration. Hemp is now out of reach of the Drug Enforcement Administration and, with a few notable exceptions, closer to being treated like any other crop.

“It’s been a long time coming and a lot of people have put a lot of effort in to get [legal hemp] to happen,” said Courtney Moran, founding principle of Earth Law, LLC, a firm that specializes in hemp law.

Spearheaded this year by Sen. Mitch McConnell, the hemp legalization amendment was inspired by previous efforts from Rep. James Comer, and decades of advocacy work by hemp supporters nationwide. Legalizing hemp had bipartisan support in both the House and Senate. Legislators softened the most problematic clause in the amendment, which bans some people with felony drug convictions from participating in the hemp industry, during negotiations between the two chambers.

One remaining uncertainty is CBD oil, the massively popular healing supplement made from hemp. Now out of reach of the DEA, negotiations with the Food & Drug Administration over the supplement’s legality could be complex.

“We’re feeling terrific but the battle is not over,” said Jonathan Miller, general counsel to the U.S. Hemp Roundtable, an industry advocacy organization. “We’ve got state laws that we need to deal with, we’ve got the FDA issues looming.”

Legalizing hemp in the U.S. marks a major change for American agriculture itself. We expect to cover numerous aspects of this law in the coming days, but this article offers an overview of the major changes and what we can expect next from legal hemp in the United States.

INDUSTRIAL HEMP REMOVED FROM CONTROLLED SUBSTANCES ACT

Hemp in all its forms — whether used as food, medicine, or textile — represents one of the first crops domesticated by humans. Then, the war on drugs brought about negative associations with psychoactive cannabis (“marijuana”) that spilled over onto hemp, marijuana’s close cousin. The result was decades of prohibition in the U.S., broken only for a brief period of hemp growing during World War II.

In 2014, Pres. Barack Obama signed a previous version of the Farm Bill which partially legalized hemp under state-based research programs. In 2017, 19 states grew a total of 25,713 acres of hemp in the U.S. However, laws vary greatly even among hemp growing states. Most hemp is still imported, while a gray cloud of legal uncertainty hung over the industry due to ongoing policies tying hemp to federal drug prohibition.

Until now, the Drug Enforcement Administration argued that industrial hemp is essentially identical to psychoactive cannabis, and therefore a “Schedule I substance” under the Controlled Substances Act. Schedule I substances face the strictest penalties for use and are considered to have no benefit to humanity, despite the numerous benefits of all forms of cannabis.

The 2018 Farm Bill completely removes hemp and anything made from hemp from the Controlled Substances Act.

“They have no right or authorization to ever be involved in this again,” Miller told us.

Advocates hope this will improve numerous policies that hurt the industry. Some vendors, especially those selling CBD oil, face legal threats. Hemp businesses routinely struggle to access banking, advertising, and other services. Ari Sherman, president of Evo Hemp, a leading vendor of U.S.-grown hemp foods, expressed his frustration with the status quo.

“We’re the only product in the grocery store that can’t be advertised,” said Sherman.

Attitudes are already changing. Even before being signed into law, the 2018 Farm Bill inspired the Alabama state attorney general to back off from plans to prosecute CBD stores.

LEGAL HEMP NOW UNDER USDA CONTROL

Regulation of hemp will now fall under the USDA, which will set national policies for the crop.

The Farm Bill does allow states to set more restrictive regulations, including banning hemp growing. It also protects the rights of Native American tribes to grow, or not grow, hemp on their lands. However, neither tribes nor states can interfere with interstate commerce surrounding hemp.

“People have been afraid that if they ship [hemp] from Colorado to Washington, what are they going to do in Idaho?” Miller said. Under the new law, “Idaho will still have to let it come through.”

The definition of industrial hemp will remain unchanged from the 2014 Farm Bill. Only cannabis with less than 0.3 percent THC will qualify as legal industrial hemp. THC, the main cannabinoid in psychoactive cannabis which makes people “feel high,” occurs in all forms of the plant but in very low levels in industrial hemp. Under current regulations, farmers must destroy destroy the entire harvest if their hemp tests at 0.4 percent or higher.

“As a Kentucky hemp farmer and processor, it is very important to me this law has passed; Kentucky farmers, and farmers across the entire U.S. will now have the ability to grow this versatile crop.” said Brian Furnish, Director of Farming & Global Production at Ananda Hemp in Cynthiana, Kentucky, Sen. McConnell’s home state.

Though the Farm Bill is now law, legalizing hemp won’t happen overnight. Until the Department of Agriculture finalizes its hemp policies, the rules of the 2014 Farm Bill will continue to officially apply.

“We hope [the USDA] look to the guidance of well-developed pilot programs, in particular Oregon and also Colorado and Kentucky,” Moran said. “Look to their guidance and [don’t] make it overly restrictive as the goal is to really open up access to farmers throughout the United States.”

LEGAL HEMP INDUSTRY STILL FACES ‘TRAGICALLY UNFAIR’ FELONY BAN

The most controversial part of the hemp legalization amendment to the Farm Bill was a clause which banned people with felony drug convictions from participating in the industry.

The legal hemp amendment originally passed by the Senate banned anyone with a felony drug conviction from participating in the hemp industry. People like Veronica Carpio, who has been a Colorado hemp grower since 2014 but also has a past psychoactive cannabis conviction, could have been forced out of an industry they helped to create.

Ministry of Hemp was one of the first media outlets to report on this hemp felony ban. Carpio told us that attention from reporters, and subsequent pressure from parts of the hemp industry, resulted in an important change to the new law. Moran told us Sen. Ron Wyden was a strong advocate for a compromise. But the felony ban remains in a modified form.

“I think it’s tragically unfair,” Carpio told us. “I’m fairly devastated over it actually.”

Under the compromise, now incorporated into the final law, the felony ban exempts anyone already growing under a 2014 Farm Bill-compliant state hemp program. Additionally, anyone whose conviction took place more than 10 years ago may grow hemp.

Carpio is grateful that her business is not likely to face any interruption, but she still condemned what she sees as an unfair restriction on hemp, which makes it unlike any other crop. She’s also concerned that the ban will disproportionately affect black people, and other marginalized groups, who tend to be arrested for drug crimes more often.

“Why should I, and others that were under the 2014 Farm Bill, why are we getting exceptions?” she asked.

“I know I should be happier about [the compromise] but I’m not, it should have been removed completely.”

In addition, she suggested this clause and others in the bill could create unnecessary government surveillance and monitoring of hemp growers.

LEGAL HEMP BUT WHAT ABOUT LEGAL CBD OIL?

The most popular application for hemp in the U.S. is CBD oil. CBD, or cannabidiol, has numerous benefits from easing symptoms of stress to reducing epileptic seizures. U.S. sales of CBD products reached $190 million in 2017. At the same time, the market is currently completely unregulated, making it challenging for consumers to separate quality CBD products from snake oil.

Hemp supporters argued that CBD products were protected by the 2014 Farm Bill and other legal precedents, but the DEA often disagreed. Though 2018 Farm Bill explicitly removes any product made from legal hemp from DEA oversight, the FDA regulates anything intended for human consumption. That includes CBD oil.

Moran noted that under the Farm Bill, “the FDA still has the complete authority that they do under the Food, Drug and Cosmetic Act.”

So far, the FDA has limited itself to targeting CBD vendors that make illegal health claims about their products. The FDA classifies everyday CBD products as nutritional supplements and bans vendors from claiming hemp extract treats any health conditions.

WILL THE FOOD & DRUG ADMINISTRATION WEIGH IN ON CBD OIL?

“The next step for the hemp CBD industry is that we need to self regulate CBD products to ensure they are safe, well tested, and properly labeled,” said Joseph Dowling, CEO of CV Sciences, maker of PlusCBD Oil, in a statement sent by email.

Many industry experts believe the FDA will face pressure to develop regulations around CBD products with the passage of the Farm Bill. Another factor is the recent approval of Epidiolex, a prescription epilepsy drug made from CBD derived from psychoactive cannabis. The approval of Epidiolex marks the first time the FDA officially recognized the medical value of cannabis. Still, some worry that it could lead to a crackdown on access to over-the-counter CBD supplements.

This is a complex and developing aspect of the 2018 Farm Bill and hemp legalization that we intend to cover in more depth in the future. Until then, CBD consumers should rest assured that their favorite supplement is likely to remain available. With CBD generating millions in profits and benefitting thousands of consumers, the FDA faces immense financial and popular pressure to keep this supplement available.

“The wind is at our back,” Miller said. “The public loves hemp-derived CBD so it’s only a matter of time.”

LEGAL HEMP IS A ‘WIN’ FOR PLANET EARTH

While CBD helps people feel better, and hemp can generate immense profits for both farmers and hemp companies, the benefits of legal hemp go deeper. Hemp can heal the soil, requires almost no pesticides and only moderate watering compared to other crops. Hemp fabric is a more sustainable alternative to cotton, and the woody core of industrial hemp plants can be made into hempcrete, a sustainable building material with numerous remarkable qualities.

While Miller cautioned that hemp is “no panacea,” he noted that Europe is already making increasing use of hemp plastic.

“It’s biodegradable and renewable,” he said. “Just imagine if that can be replicated on a mass scale what that could mean for the environment.”

Moran agreed:

“[The environment] is the most important aspect of all of this. … The reason I have been an advocate for the past 10 years and why I have focused my entire education and career on industrial hemp legalization is because this plant can do amazing things for the earth, for the soil.”

Sherman suggested this could be a moment with international significance. Evo Hemp’s attempts to encourage hemp farming in foreign countries often faced resistance from officials afraid of U.S. government retaliation. That could be on the verge of changing.

“All of these countries around the world are going to open up their hemp policies,” he predicted.