On December 12th, 2018, the U.S. House and Senate approved the 2018 Farm Bill, which includes provisions that legalize on a federal level the production of hemp (and all cannabinoids derived from it, such as CBD). The next and final required step is the signature of POTUS.
Below is a fantastic summary of the news of the day and of the bill (credit provided to: Vicente Sederberg, LLC).
We will post updates as this story develops and we learn more about timelines and how the passage of the 2018 Farm Bill will impact hemp/cannabis industry members. Please do not hesitate to reach out to us with your questions.
One Signature Away From a Federally Legal U.S. Hemp Industry
Congress made hemp history today! The House and Senate approved the Agricultural Improvement Act of 2018, known as the 2018 farm bill, which includes provisions that explicitly legalize the production of hemp (and all cannabinoids derived from it) under federal law. It is now headed to President Trump, who will hopefully sign it into law.
The 2018 farm bill regulates hemp like other agricultural crops, allowing for federally sanctioned hemp production governed by the U.S. Department of Agriculture. It gives states, U.S. territories, and Indian Tribes the option to act as the primary regulatory authority by adopting plans that meet minimum federal standards. The bill also amends the federal Controlled Substances Act to exclude hemp from the definition of marijuana and creates a specific exemption for THC found in hemp.
You can find out more about what the bill does and does not do in the summary below. We invite you to contact us if you would like to schedule a consultation with an attorney in our Hemp and Cannabinoids practice group. Please also save the date January 17, 2019, for a hemp policy seminar at our Denver office, at which our attorneys will offer a more detailed overview of the 2018 farm bill and what it means for existing and future hemp businesses.
The 2018 Farm Bill:
- Defines hemp as an agricultural commodity under federal law and removes its current federal drug status. The bill amends federal law to define “hemp” (as opposed to “industrial hemp”) as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not” with a THC concentration of not more than 0.3 percent on a dry weight basis. It also completely removes “hemp” from the definition of “marihuana” under the Controlled Substances Act and creates a specific exemption for THC found in hemp. This will provide opportunities to obtain federal research grants and remove a barrier to obtaining crop insurance.
- Authorizes the U.S. Department of Agriculture (“USDA”) to create standards for commercial hemp production and gives states, U.S. territories, and Indian Tribes the ability to adopt their own plans for hemp production control. In addition to requiring research on the hemp plant, the bill amends the Agricultural Marketing Act of 1946 to allow for federally sanctioned hemp production under the authority of the USDA, in coordination with state departments of agriculture. States, U.S. territories, and Indian Tribes can have primary regulatory authority over the production of hemp after submitting a regulatory plan to the USDA for approval. These jurisdictions can adopt their own regulatory regimes (even if more restrictive than federal law) so long as they meet minimum federal requirements; however, they cannot prohibit shipments through states. If a plan is not approved by the USDA, it may be amended and resubmitted. In jurisdictions that don’t submit plans or do not receive USDA-approval, production of hemp in that jurisdiction would be regulated by the USDA’s program and licenses would be issued by the U.S. Secretary of Agriculture (as opposed to a state department of agriculture). This means some states may continue to limit or prohibit certain activity, and regulations will likely continue to vary state by state.
- Removes restrictions on importing and exporting hemp. Hemp will no longer be a schedule I controlled substance under U.S. federal law, making it federally legal to import and export hemp provided other regulatory requirements are satisfied.
- Prohibits persons with certain drug felonies from participating in the program. With limited exceptions for persons lawfully cultivating under a 2014 farm bill state pilot program, persons with felonies related to controlled substances are ineligible to produce hemp during the 10-year period following such felony conviction.
The 2018 Farm Bill Does NOT:
- Legalize unlicensed hemp production. Cultivation of hemp without a license from the applicable regulatory authority will remain illegal.
- Automatically change state laws or void existing state hemp programs. The industrial hemp research pilot program provisions of the 2014 farm bill will remain in effect until one year from the date on which the USDA adopts regulations governing hemp production in jurisdictions without USDA-approved programs. This means industrial hemp cultivation and the sale of industrial hemp-derived CBD may still be illegal in your state.
- Amend federal food and drug laws or make CBD a lawful food ingredient or dietary supplement. The bill expressly makes no amendments to the Federal Food Drug and Cosmetic Act, so it will not have a direct impact on the Food and Drug Administration’s (“FDA”) position that CBD is prohibited from use as a food ingredient or dietary supplement. However, removing hemp-derived CBD from the federal Controlled Substances Act and establishing regulation of hemp as an agricultural commodity will create avenues for researching its safety and efficacy, which may lead to the FDA evolving its stance on this issue.
- Mean that all hemp activities are legal in all 50 states. As mentioned above, states, U.S. territories, and Indian Tribes can adopt prohibitive or restrictive plans so long as such plans do not conflict with federal law. However, no state, U.S. territory, or Indian Tribe can prohibit the transportation of hemp or hemp products produced in compliance with federal law through its borders.
Credit to: Vincente Sederberg, LLC
Last modified: December 14, 2018