2018 Farm Bill: The End to Hemp Prohibition

Today, December 20th, 2018, President Trump signed the 2018 Farm Bill, not a new piece of legislature, but an important one for multiple industries. Most important: the hemp industry. For decades, hemp (and CBD oil) have been listed as a Controlled Substance, lumping it alongside marijuana and other intoxicating substances. Moving forward, hemp will be placed under the supervision of the Department of Agriculture and thus be an agricultural commodity.

This change will revolutionize the hemp industry, including CBD products, which as you know have been in a legal gray area for a long time. Some regulations were eased with the 2014 Farm Bill, but it was still very difficult for wholesale CBD hemp companies like us to operate under laws which were interpreted differently by many organizations.

With the 2018 Farm Bill, hemp farmers are going to have the ability to participate in USDA programs for certifications, therefore, hemp will soon be able to have certifications such as “organic” with the new law. This is something our industry badly needs to separate the real from the fake.

What the 2018 Farm Bill is Not

The 2018 Farm Bill does not give businesses the ability to make claims about CBD or hemp products. Just because hemp is now considered an agricultural product, it doesn’t mean we can claim anything we want about CBD and its benefits. The guidelines and rules set forth by the FDA are still very much in play. We are excited, however, to start seeing more research and clinical trials with CBD and the results which come from those.

The History of Hemp Prohibition

Hemp Prohibition ends! Men with we want hemp signs

Hemp prohibition dates back to 1906, where many believe newspaper publisher William Randolph Hurst started the smear campaign against hemp. People believe that Hearst felt this was a threat to his extensive timber holdings, and thus his newspaper was used to share false facts around hemp. This helped lead to the misunderstanding that hemp and marijuana are the same, which they are not.

Ultimately, the charge for hemp and cannabis prohibition was led by Harry Anslinger, a government official who served as the first commissioner of the U.S. Treasury Department’s Federal Bureau of Narcotics. He was a supporter of prohibition and the criminalization of drugs and played a pivotal role in cannabis prohibition.

The Marihuana Tax Act of 1937 was one of the first steps America made in the crackdown on hemp plants. The Tax Act of 1937 was eventually repealed by Leary v. United States in 1969.

In the next year, the Controlled Substances Act was passed, which the new 2018 Farm Bill successfully overrules. This was a replacement for the Marihuana Tax Act of 1937 and placed hemp as a controlled substance.

Wholesale CBD Oil and the 2018 Farm Bill

Under the 2018 Farm Bill, hemp is considered an agricultural product and will thus open the floodgates for research and development, as well as for businesses. We are excited to see what happens to the business landscape of this industry with these new laws in place.

You may read the entire 807 page report, otherwise, below are the main points highlighted by attorney Jonathan Miller from Frost Brown Todd LLC:

“The era of hemp prohibition is over.  Hemp is now permanently removed from the Controlled Substances Act (CSA).  It is forever deemed an agricultural commodity, no longer mistaken as a controlled substance, like marijuana.

  • By redefining hemp to include its “extracts, cannabinoids and derivatives,” Congress explicitly has removed popular hemp products — such as hemp-derived cannabidiol (CBD) — from the purview of the CSA. Accordingly, the Drug Enforcement Administration no longer has any 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 conduct commerce with the hemp and hemp product industry.
  • Hemp farmers now may finally access needed crop insurance and can fully participate in USDA programs for certification and competitive grants.
  • State and Tribal governments may impose separate restrictions or requirements on hemp growth and the sale of hemp products – however, they cannot interfere with the interstate transport of hemp or hemp products. We are hopeful that local and state officials will follow Congress’ lead, as well as the statements and resolutions of the World Health Organization and the U.S. Food and Drug Administration (FDA) that declare, after intense scientific scrutiny, that CBD is safe, non-toxic, and non-addictive.
  • The FDA continues to exercise jurisdiction over the regulation of ingestible and topical hemp products.  We applaud the agency’s continued efforts to crack down on bad actors who undermine the industry through misguided marketing claims.  And while we are concerned about non-binding statements made by the FDA that have led some state and local officials to question the legality of the retail sale of hemp-derived CBD, we are hopeful that we can work with the agency to clarify that CBD – which their own scientists concluded has no abuse potential and does not pose a risk to public health – should not be withheld from Americans who count on it for their health and wellness.

SECTION BY SECTION

Section 7129 (p. 313): Includes hemp in USDA’s supplemental and alternative crops programs. Section 7501 (p. 338): Includes hemp in USDA’s critical agricultural materials programs.

Section 7605 (p. 347): Orders the USDA Secretary to prepare a report on the 2014 Farm Bill pilot program, and then repeals that program one year after the new permanent hemp program is created. Section 10113 (p. 429): The guts of the new permanent legalization regime:

o Section 297A (p. 429) Defines hemp as all parts of the plant less than 0.3% THC, including “derivatives,” “extracts” and “cannabinoids.”

o Section 297B (p. 429) Empowers states and Tribes to submit plans to USDA to implement a permanent hemp growing program.  Requires information gathering, testing, and inspection procedures.  The USDA Secretary must sign off on, or reject, the plan within 60 days, and consult with the Attorney General.  The Secretary can later audit state programs and work with the states to develop corrective action plans where there is noncompliance.

o Section 297B(e)(p. 431): Orders states and Tribes to develop procedures to address violations, including corrective action in the case of negligence.

o Section 297B(e)(3)(B) (p. 432): Individuals who commit drug felonies cannot participate in state or Tribal growth programs for 10 years following the date of their conviction.  However, participants in the 2014 Farm Bill pilot programs are grandfathered in to participate in permanent programs despite any prior felony committed.

o Section 297C (p. 432): States and Tribes are required to maintain information on lands where hemp is grown and testing, enforcement and inspection procedures.  The USDA Secretary must collect such information to be accessible in real time to local, state and federal law enforcement.

o Section 297D (p. 434): The USDA Secretary is required to submit an annual report to Congress on the program’s implementation.

o Section 297D(c)(p. 434): Nothing in the new law affects the FDA’s authority under the Food, Drug, and Cosmetic Act or the Public Health Service Act.

Section 10114 (p. 435): Nothing in the act prohibits the interstate commerce of hemp, nor can States or Tribes prohibit the transportation of hemp or hemp products through their territory.

Title XI (p. 439):  Hemp farmers are made eligible for crop insurance, and marketability requirements for the crop insurance program can be waived.

Section 12619 (p. 540): Hemp is removed from the definition of “marihuana,” and THC found in hemp is excluded from the definition of a controlled substance.”

Keynotes from the Conference Report Managers’ Summary:

  1. 738: The Managers note that “state and Tribal governments are authorized to put more restrictive parameters on the production of hemp, but are not authorized to alter the definition of hemp or put in place policies that are less restrictive.”
  2. 738: The Managers note that the USDA Secretary must consult with the Attorney General regarding the approval of state or Tribal plans, but “the Managers intend that the final decision be made by the Secretary.” States or Tribes can appeal or resubmit plans that are rejected or revoked.
  3. 739: Any drug felonies committed after the permanent program begins will ban participants from participating, regardless of whether they participated in the 2014 Farm Bill pilot program.
  4. 739: The USDA Secretary must make program information accessible in real time to law enforcement, and is encouraged to develop a memorandum of understanding to define the parameters of this information sharing.
  5. 739: “While states and Indian tribes may limit the production and sale of hemp and hemp products within their borders, the Managers, in Section 10122, agreed to not allow such states and Indian tribes to limit the transportation or shipment of hemp or hemp products through the state or Indiana territory.”

 

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