What the New Farm Bill Mean to the CBD Industry?
The Farm Bill was first drafted in 1933 and gets updated about every five years. The Farm Bill provides important agriculture and nutritional policy extensions and, when meeting about the Farm Bill, the word cannabis usually does not come up in conversation. This year things are a bit different. Read on to find out more about the new Farm Bill and what it will mean to the Cannabis industry.
What is the Farm Bill?
Before looking at how changes in the Farm Bill will affect the CBD industry, let’s start by getting a good understanding of what the Farm Bill is.
The Farm Bill was first introduced in 1933, during the time of the Great Depression and the Dust Bowl. It was conceived to address the needs of American farmers at a time when hunger and poverty were prevalent throughout the country.
During these times, it was very difficult for farmers to make money. Hence, the first Farm Bill was drawn up. Under the bill, the federal government paid farmers to cut back on their production and then bought surplus agricultural goods to provide for the thousands of hungry Americans.
Since then, the federal government has been reviewing the Farm Bill approximately every five years. A handful of issues are usually discussed. Crop insurance, conservation and commodities are the dominant issues that account for 99% of government spending. However, the remaining 1% covers innovative programs that can change the landscape for American farmers as negotiations take place that could cut, reduce, reshape or expand vital programs.
The Farm Bill and the CBD industry
This year, legislation explores an issue first introduced to the political spotlight regarding the Farm Bill in 2014, cannabis. Back then, Congress authorized state pilot programs to study the cultivation and commercial marketing of industrial hemp as a viable crop. These studies led to a significant turning point in 2018, as the issue was pushed forward by Senate Majority Leader Mitch McConnell, a well-known cannabis supporter.
Before delving into the issue any further, it’s important to establish a bit of background. When defining cannabis, the cannabis plant and hemp for the first time is being identified differently when hemp should contain no more that 0.3% THC. Therefore, it can not have psychoactive effects. This is the first time the state is differentiating between hemp and other cannabis plants which were, before now, all made illegal under both the Marijuana Act of 1937 and the Controlled Substances Act of 1970.
So, essentially, under the new Farm Bill, hemp will be legal, but with serious restrictions.
Under past legislation, pilot programs allowed for small scale expansion of hemp cultivation for limited purposes. The new Farm Bill is more expensive.
It allows hemp cultivation broadly, beyond pilot programs that may be studying hemp for scientific purposes. It allows hemp to be transported across state lines for commercial and other purposes. There are also no restrictions put on the sale, transport or trade of hemp items, as long as all business is conducted in accordance to the law. However, there are a number of restrictions involved with these laws.
Restrictions Regarding the New Farm Act
If you are involved in the manufacturing of hemp, you may see the New Farm Act as a major victory. However, there are a number of restrictions still involved in the growing and selling of the product.
For one, as previously noted, hemp must not contain more than 0.3% THC as per section 10113 of the Farm Bill. Products with THC that exceeds that level will be considered non-hemp cannabis or marijuana, and will not be protected under the new legislation.
There will also be a shared state-federal regulatory power over hemp cultivation and production. State departments of agriculture will have to consult with the state’s governor and chief law enforcer to provide a plan to be submitted to the Secretary of USDA. Only once the plan has been approved, will farmers and manufacturers be able to proceed with cultivation and production.
Other states may have a different game plan. If the state does choose not to add a hemp regulatory program, the USDA will construct a regulatory program mandating hemp cultivators to apply for a license and comply with federally run programs.
The bill also outlines punishments for those who violate the new legislation. Violations can include operating without a license or growing hemp with a THC level that exceeds 0.3%. Violators will be forced to comply with the law and could even be charged with felony for their violation.
How the New Farm Act Encourages Research
One of the purposes of the new legislation is to protect and encourage research on the hemp plant.
Section 7605 re-extends protection for hemp research and the conditions under which research can be conducted. Section 7501 includes hemp under the Critical Agricultural Materials Act.
The creation of this type of legislation will help raise awareness regarding the importance, diversity and opportunities of the plant. Opening more opportunities for research that is needed to improve hemp based products and help them become more socially accepted. It will also make hemp research eligible for competitive grant funding under the National Agricultural Research, Extension and Teaching Policy Act of 1977.
Changing the Face of Hemp Farming
Under the new Farm Act, hemp will be treated like any other agricultural product in many ways. For instance, section 11101 of the act allows hemp farmers to be protected under the Federal Crop Insurance Act. This will help to protect farmers who experience crop losses when growing hemp.
This will be extremely helpful to farmers who are starting out with the product and may still be getting used to what it takes to successfully grow these crops.
How the New Farm Act Will Change the CBD Industry
Many people turn to CBD to improve their quality of life. Cannabidiol (CBD) has been known to provide several health benefits, but it is difficult for some to obtain the quality products they need due to legal uncertainties that come with purchasing and using CBD products.
So, the question on many minds must be, now that the new Farm Act has come into effect, will CBD be completely legal? Unfortunately, the answer to that is no.
Section 12619 of the Farm Bill removes hemp derived products from their Schedule I status under the Controlled Substances Act, but it does not refer to CBD in general. CBD itself, remains as a Schedule I Substance under federal law. The new Farm Bill just creates exceptions to this Schedule I status in certain situations.
It ensures that any cannabinoid (CBD included) will be legal if it is derived from hemp that is produced in a manner that is consistent with the Farm Bill and all the regulations it mandates. All other cannabinoids, produced in any other setting remain a Schedule I, illegal substance under federal law.
Despite there still being a number of regulations regarding the sale and use of CBD, predictions are already being made for changes that will occur in the CBD industry. To get to the point quickly, the new bill is expected to bring unprecedented growth to the industry.
Experts predict that more companies will begin to break into the CBD industry, marketing and selling products that were once thought of as controlled substances. Banks and payment centers will experience a trickle down effect as more industries will be turning to them for the processing of their goods and services.
Others predict that the doors the new Farm Bill has opened will set the stage for legalization across the country. If this happens, there could be a doubling or tripling of domestic cultivation within the next year and CBD could be shipped everywhere. Many are optimistic about this happening and feel that this type of acceptance of CBD could be life changing as it is known to be an effective natural alternative to many medical treatments.
However, key figures like commissioner of the U.S. Food and Drug Administration, Scott Gottlieb is quick to point out that the USDA still considers interstate commerce of foods and dietary supplements containing CBD to be illegal. The agency plans to hold meetings on how to regulate CBD in the future.
In any case, new developments should lead to a boom in the CBD market which is expected to grow in an annual growth rate of 132% in the next five years.
How the Farm Bill Affects State Legal Cannabis Programs
Over the past 22 years, 33 state have legalized cannabis for medical purposes and 10 states have legalized cannabis for adult use over the past 6 years. The Farm Bill has no effect on these state legal cannabis programs and they will still be considered illegal under federal law with no exceptions. However, there is hope that the Farm Bill will lead to great reform that will make these laws more widely accepted.
Although the new Farm Bill will allow for more legal and available CBD products, it does not mean all CBD products will be legal moving forward. As always, it is important to check local laws and regulations before purchasing and using products to make sure you are on the right side of the law.
The New Farm Bill was signed by President Trump on Dec. 20, 2018. Writing this article just a week into these changes taking place, it is difficult to say how this will affect the CBD industry and the country in general. However, the path is set for increased acceptance that can mean a boost in the industry. In addition we can expect an easier way for consumers to get quality products that will improve their quality of life. The times they are a changing…and hopefully, this time, it’s all good.