American Hemp, Lifting the Legal Fog

By Sam Gunnells

Since 2014, when Congress passed a major Farm Bill allowing states to set their own regulations on hemp production, more than thirty states said  “yes” to industrial hemp. Now, a new Farm Bill, the Agricultural Improvement Act of 2018, has clarified hemp laws and solidified hemp’s place in the American economy. The bill removed the plant from the list of federally controlled substances and broadened access to farming rights for the people who grow it.

The measure received strong bipartisan backing–and some pretty persuasive voices led the charge. While there is still some gray area, the Farm Bill made hemp legal in across the county—opening up the CBD industry. Now, hemp is probably legal in your state.

Here’s the background on hemp laws:

You might know hemp through its illicit association with its mind-altering cousin, marijuana. But the truth is, hemp’s criminal status in America is a relatively new trend. The plant was grown widely on early American farms, due in large part to its sturdy fibers which led to an astonishing array of everyday uses. It was only after hemp’s heavy taxation under the Marijuana Tax Act of 1937, when it was targeted along with the act’s namesake, that American farmers began to shun the industrious crop.  

That association might sound fair at first blush. After all, the two strains, hemp and marijuana, belong to the same plant species, Cannabis sativa L. And admittedly, they do share a family resemblance. But that’s about where the similarities end. The major feature setting hemp apart is the plant’s extremely low levels of one vital ingredient: tetrahydrocannabinol. Better known as THC, this tough-to-pronounce compound happens to be the primary component behind the buzz that gives marijuana its claim to fame.

The allotment of THC found in hemp is so tiny, however, it isn’t likely to put even a lab rat in an altered state. And yet, when the federal Controlled Substances Act was passed in 1970, it still grouped hemp together with marijuana in the hardest class: Schedule I. That move cemented hemp’s illicit status at the federal level. And it meant growing or possessing hemp could land you with serious charges, no matter your state.

How did the 2014 Farm Bill impact state hemp laws?

Mild-mannered hemp’s federal classification as a Schedule I drug placed it among the ranks of some seriously dangerous substances, like heroin and MDMA. And for several decades, this hardline stance on hemp remained the law of the land. In the 1990s, a few states enacted or pursued legislation to allow the production of industrial hemp, but their impacts were negligible and few crops were planted.

Then, in 2014, members of Congress succeeded in passing a pro-hemp proposal–Section 7606–as part of that year’s omnibus Farm Bill. That measure allowed states to authorize a narrow range of hemp cultivation activities within their borders, ushering in a new era in American hemp. After spending decades deferring to federal leaders on hemp laws, states suddenly found themselves in the driver seat.

What Section 7606 did:

  • Giving context to its actions, Section 7606 legally defined industrial hemp to include any member of Cannabis sativa L. with a THC concentration no higher than 0.3 percent by dry weight.
  • It then authorized state agriculture departments and institutions of higher learning in states where hemp production is legal under state law to create their own pilot programs to supervise the cultivation of hemp for research purposes.
  • In states starting pilot programs–whether through an agriculture department or a research institution–it charged the agriculture department with establishing compliance regulations for the programs. This could extend to the creation of new commissions or other regulatory bodies.
  • Farmers wanting to grow hemp would need to be certified by and registered with their state’s agriculture department and remain in compliance with all established regulations.

How the 2014 Farm Bill changed the hemp game:

If the 2014 Farm Bill moved the country closer to legal hemp. By 2015, seven states–Hawaii, Indiana, Kentucky, Minnesota, North Dakota, Oregon and Tennessee–had already passed legislation and put plants in the ground. With more states jumping at the chance in 2016, the U.S. hemp crop shot up from 3,933 acres grown to nearly ten thousand in a single year

According to the National Council of State Legislatures, at least forty states have passed legislation to explore or hemp production, while at least thirty-eight now allow for hemp cultivation on some scale. Hemp plants are now being grown on more than 25,000 acres in at least nineteen states. And many of those states are already exploring some unique uses for the hemp they produce:

  • Kentucky’s pilot program is focused on studying the potential environmental benefits of hemp cultivation, including its possible use as a biofuel – an alternative to traditional fossil fuels.
  • In Colorado, researchers are taking a special look into hemp’s suitability as a source for animal feed, a potentially potent profit-driver for farmers given the staggering feed demands of the world’s farm animals.
  • Two universities in North Carolina–North Carolina State University and North Carolina A&T–are partnering with that state’s agriculture department to better understand how hemp farmers can practice soil conservation techniques in a variety of soil and climate types.   

So, what changed with the 2018 Farm Bill?

First off, the 2018 Farm Bill changed hemp’s inclusion on the controlled substances list. Hemp is no longer a Schedule 1 drug. Previously states issued licenses to farmers to grow hemp, but now the plant is federally legal. The new law also allows hemp farmers to apply for federal grants and crop insurance.

In a statement after President Trump signed the Farm Bill into law, the U.S. Hemp Roundtable said:

Effective immediately, hemp is permanently deemed a legal agricultural commodity, and popular products such as hemp-derived cannabidiol (CBD) can no longer be mistaken as controlled substances, like marijuana. The Drug Enforcement Administration now has no possible claim to interfere with the interstate commerce of hemp products. This should give comfort to federally regulated institutions—banks, merchant services, credit card companies, e-commerce sites and advertising platforms—to engage in commerce with the hemp and hemp product industry. An exciting, emerging, multi-billion-dollar hemp industry is now unleashed, providing economic opportunity to farmers and small businesses all across America.

But there’s still confusion

Despite changes in federal laws, companies who sell hemp-derived CBD still operate in a confusing space. After the passage of the Farm Bill, the FDA said in a statement:

We’re aware of the growing public interest in cannabis and cannabis-derived products, including cannabidiol (CBD). This increasing public interest in these products makes it even more important with the passage of this law for the FDA to clarify its regulatory authority over these products. In short, we treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of the source of the substance, including whether the substance is derived from a plant that is classified as hemp under the Agriculture Improvement Act. To help members of the public understand how the FDA’s requirements apply to these products, the FDA has maintained a webpage with answers to frequently asked questions, which we intend to update moving forward to address questions regarding the Agriculture Improvement Act and regulation of these products generally.

Because the FDA still holds regulatory authority over products that contain CBD, brands are unclear about what they can say, how they can market products, and what the future holds for their business. There is also increasing confusion around the use of CBD in food and beverage products. As recently as January 2019, states like New York, North Carolina, and Maine have cracked down on companies who sell CBD in food products.

What’s next for hemp laws in America?

Right now, a lot of that depends on the FDA. With powerful voices on both sides of the aisle now firmly behind hemp as an agricultural commodity, now the questions about hemp revolve around products that contain CBD—how they will be regulated, tested, and sold. 

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