How Much Did the Farm Bill Increase Demand For CBD

CBD use has become more prevalent since 2018, when the production and sale of hemp became legal at the federal level The passage of the 2018 Farm Bill officially removed hemp and derivatives of cannabis with a THC level of no more than 0.3% from the Controlled Substances Act (CSA).

The provisions of this legislation essentially created the modern CBD industry. In this article, you’ll find out how the Farm Bill came to be and how it increased the demand for CBD as we discuss:

  • Evolution and development of the Farm Bill
  • Significance of the Farm Bill and its effect on CBD demand
  • The future of the CBD market

Evolution and Development of the Farm Bill

The cultivation of hemp, its use, and distribution were not always under heavy review. However, over the years, it transitioned from a hearty agricultural staple to a stigmatized substance impacted by different legislative enactments.

Hemp declined in popularity following the Marijuana Tax Act of 1937, and the industry slowly eroded following the imposition of heavy sales taxes. Decades later, under the Controlled Substance Act of 1970, hemp was grouped with marijuana and declared a Schedule 1 drug, or a substance that is considered to have potential safety concerns

After that, hemp cultivation was banned in the U.S., causing manufacturers to rely on importation from Canada, China and Europe. The Agricultural Act of 2014 provided the differentiation between hemp and marijuana based on their THC content. Although the 2014 bill renewed interest in hemp farming, it failed to clear all confusion concerning the legality of hemp products.

The Agricultural Improvement Bill was signed into law on December 20, 2018. Known as the Farm Bill, this new law categorized hemp as a legal agricultural commodity, removing the plant and all its derivatives, including CBD, from the definition of controlled substances.

Significance of The Farm Bill and Its Effect on CBD Demand

The passage of the Farm Bill can be recognized as an extraordinary win for the CBD industry. If we look at the numbers, it is obvious how much the Farm Bill increased demand for CBD.

This chart from Statista shows that CBD product sales in 2014 totaled a modest $108 million. The data to 2014 to 2018 shows CBD sales increasing by nearly 400% over the lifetime of the survey. The survey’s projections expected that 2019 would see an increase of about $350 million in total sales. But if we compare that to a graph with actual sales numbers through 2020, we can see that the reality vastly outstripped the estimates. Instead of the expected sales of just over $1 billion, CBD sales in 2019 topped $4 billion thanks to the Farm Bill. Growth slowed somewhat due to the impacts of COVID-19, but 2020 still saw the industry earn nearly $5 billion in sales.

The Future of the CBD Market

The 2018 Farm Bill cleared up the cloudy position of CBD legality. As a result, farmers and manufacturers have since been able to grow and distribute hemp as any other agricultural commodity. However, this freedom is granted at the federal level; individual states vary in their restrictions over the sale of CBD. (For details, see our guide to CBD laws by state.)

Another challenge is the need for more research. Having gained considerable popularity across the economy’s health, beauty, and wellness sectors, CBD is believed by some to hold the key in helping to combat symptoms of various health conditions. The FDA, which retains sole authority to regulate CBD as a food or dietary ingredient, has released statements expressing concern over the increasing number of CBD products marketed with excessive therapeutic claims without scientific backing. As a result, many studies are underway that could help to further strengthen the industry if they find claims of efficacy for various conditions. (For more information, see more on exciting CBD studies here.)

It’s apparent that the 2018 Farm Bill increased demand for CBD. As more information on the therapeutic effects of CBD becomes available, producers can expect an accompanying increase in sales. In addition, the removal of federal restrictions is paving the way for more in-depth research to determine more potential medicinal benefits of CBD.

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