After a difficult 2020, 2021 looks to be a year of new beginnings and fresh starts. Maybe you’re considering entering into the world of CBD retail as one of your resolutions. If that’s the case, you’ll need to know about the potential changes to CBD laws in the new year.
Before we dig into any upcoming changes, let’s take a look at where laws regarding CBD stand after 2020.
Recap: CBD Laws to Date
As you likely know, hemp-derived CBD was made legal by the 2018 Farm Bill. This landmark bill allowed for the growing and cultivation of hemp with a THC percentage below 0.3%. The laws it spawned ensured that the growing of hemp remained highly regulated, but functionally made the production of hemp legal. With hemp production made legal, it allowed for the creation and sale of CBD products.
It’s important to note that while the production of hemp is now legal, CBD remains in a gray area depending on the state and CBD product in question. Section 12619 of the Farm Bill removed the schedule 1 designation of hemp-derived products, such as the ones sold by US Hemp Wholesale. Because CBD can also be extracted from other plants within the cannabaceae family (cannabis, hops, etc.) the chemical compound of CBD is not explicitly made legal by this bill.
All of these caveats and specifications may sound confusing, but following the law is simple. Make sure that all the CBD products you intend to sell are hemp-derived and contain less than 0.3% THC.
State Level
At the state level, determining the legality of CBD takes a bit more effort. With the sole exception of the state of Idaho, you will always be in the clear when selling hemp-derived CBD products with less than 0.3% THC. Per the Idaho Office of Drug Policy, for CBD to be sold in Idaho it must “both contain zero THC and be derived from one of the five identified parts of the cannabis plant, otherwise it is illegal in Idaho under current law.” For further reading visit the Idaho Office of Drug Policy website.
To provide an at-a-glance view of CBD laws, we’ve embedded this helpful map. Click on the state you’re curious about to see a short list of its laws regarding CBD.
Barring Idaho, no state has stricter requirements for CBD products than the requirements found in the 2018 Farm Bill. Many states, particularly those that have legalized cannabis for either medical or recreational use, have more relaxed laws surrounding CBD. For more specific information, please visit the relevant state organization’s page, such as the California Department of Food and Agriculture’s page about industrial hemp.
Is CBD Still Legal in 2021?
Yes, hemp-derived CBD with less than 0.3% THC remains legal in 2021. Some expect that the new presidential administration and the recent power shift in the Senate will lead to more relaxed laws surrounding CBD. This may seem likely, but it’s important to take all predictions with a grain of salt, especially those reliant on politics.
While we can’t guarantee forward progress on CBD legalization at the federal level, recent trends indicate that it will either remain at its current legal status or increase in legality in the coming years.
New CBD Laws & Developments at the Federal Level in 2021
Little is expected to change at the federal level in regards to the legal status of CBD in 2021. Many CBD industry business leaders believe that the incoming presidential administration will be more open to less stringent laws surrounding CBD. However, managing the spread of COVID-19 will take precedence over any changes to CBD’s legal status.
Some industry leaders expect that as the Food and Drug Administration (FDA) remains occupied with the ongoing pandemic and vaccine rollout, the US Department of Agriculture (USDA) will drive the next steps in hemp and CBD regulation.
Despite the looming shadow of COVID-19 hanging over potential progress towards total legalization of CBD, there are bright spots to be found. With the passing of the Farm Bill in 2018, CBD became the subject of much research. Much of what has been discovered is promising. Per an article from Harvard Medical School, “the strongest scientific evidence… for [CBD’s] effectiveness [is] in treating some of the cruelest childhood epilepsy syndromes, such as Dravet syndrome and Lennox-Gastaut syndrome (LGS).” As a result of these findings, the FDA approved the first cannabis-derived medicine, Epidiolex, which contains CBD, to treat these syndromes.
The same Harvard Medical School article also states that “CBD may offer an option for treating different types of chronic pain” and offers two examples. One, a study from the European Journal of Pain, showed that “CBD applied on the skin could help lower pain and inflammation due to arthritis.” The second study “demonstrated the mechanism by which CBD inhibits inflammatory and neuropathic pain, two of the most difficult types of chronic pain to treat.”
More research is required to sufficiently prove the effectiveness of CBD as a treatment for chronic pain. Luckily, these promising results ensure that more research will soon take place. The results of future research will provide critical information to the FDA as they consider new CBD laws in 2021.
The most recent development in the world of hemp and CBD came with the publishing of the USDA’s final rules on hemp production. These rules primarily relate to the growing of hemp, but CBD sellers need to stay up to date on these rules to ensure that their suppliers meet the rules laid out by the USDA. Here’s a quick list of the most important developments found in the new rules.
- The final rules replace the IFR at 7 CFR part 990 as of January 19th, 2021.
- It establishes rules for performance based sampling. These rules require hemp producers to collect enough samples to reach a 95% confidence level that no more than 1% of plants on the lot would exceed 0.3% THC.
- The rules extend the harvest window from the original ruling, increasing the window from 15 days after testing to 30 days after testing.
- It establishes testing standards for all laboratories testing hemp products.
- These rules increase the negligence threshold from 0.5% THC to 1% THC. “This final rule specifies that hemp producers do not commit a negligent violation if they produce plants that exceed the acceptable hemp THC level and use reasonable efforts to grow hemp and the plant does not have a THC concentration of more than 1.0 percent on a dry weight basis.”
- The USDA rules hold that negligent violations are not subject to criminal enforcement action.
New CBD & Developments Laws at the State Level in 2021
As always, CBD laws at the state level lack the clarity of federal CBD laws. We suggest reaching out to the relevant regulatory body of your state to fully understand the stance they have on selling CBD products.
That said, there are several states poised to legalize or decriminalize cannabis in 2021. To be abundantly clear, CBD is not cannabis. However, because the two products are both derived from plants in the cannabaceae family, they often become legally intertwined. It’s no coincidence that the states with the most relaxed stances on CBD are the same states that allow medical or recreational cannabis.
We expect to see progress toward fully legal or more accessible CBD products in the following states this year:
- New Jersey
- Virginia
- Texas
- Connecticut
- Utah
- New York
- Florida
- Arkansas
Even California, one of the most CBD-friendly states, looks to make further progress on the business side of CBD. Tax officials recently alerted regulatory bodies about banking issues related to cannabis. This resulted in the signing of the California Banking Bill which states that “financial services and banking institutions are not acting criminally when engaging with a licensed cannabis business.” We anticipate that any further changes to these banking protocols will also make banking easier for CBD retailers and other sellers.
What Do These New Laws & Developments Mean for CBD Retailers?
These laws and developments have wide-ranging impacts for CBD retailers. In particular, as laws regarding CBD become more relaxed, sellers of CBD can look forward to more manageable supply chains. This becomes doubly true if CBD is wholly legalized in all forms.
Beyond simplified supply chains, these potential changes could drastically reduce the difficulty of opening your own CBD store. As more states and federal organizations legitimize CBD as a business, private companies will begin to loosen their restrictions on the product.
The biggest impact of these relaxed restrictions will be felt as banks and other transaction-focused companies like PayPal remove CBD from the “high-risk” category. As this happens, CBD will become much easier to sell as customers will no longer have to jump through hoops just to make a purchase.
Similarly, as CBD falls out of the high-risk category for banks and payment companies, it could fall out of that category for advertisers. The current rules at Google and Facebook prohibit the advertising of products from high-risk industries. Once these categorizations fall away, CBD products could be advertised through the same channels as other health supplements.
Start Selling Legal Hemp Derived CBD in 2021
With so many positive changes set to take place in the world of CBD, now is the perfect time to start selling CBD. If you want to get out there and start a CBD retail business of your own, US Hemp Wholesale is here to help. Our hemp-derived CBD products follow all federal guidelines, so there’s no need to worry about unknowingly disobeying any regulations.
Each day that you spend waiting to start your CBD business leads to missed opportunities. Don’t miss out on providing your clients, customers, or patients with the CBD products they need. Contact US Hemp Wholesale today to see how we can help you become a part of the CBD retail industry