2018 Farm Bill Signed Into Law

Cannabis Law Alert

December 20, 2018

Nikolas S. Komyati

Nikolas S. Komyati

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On December 20, 2018, President Trump signed the Agriculture Improvement Act of 2018 (commonly known as the “Farm Bill”) into law. The previous version of the Farm Bill expired on October 1, 2018. Notably, the 2018 Farm Bill has legalized hemp on the federal level.

In 2014, President Obama’s Farm Bill allowed pilot programs to grow hemp crops. Specifically, universities and state departments of agriculture were authorized to issue research permits to allow farmers to grow Cannabis sativa L., so long as no part of the plant contained a concentration of more than 0.3% of Tetrahydrocannabinols (“THC”). Nevertheless, the 2014 Farm Bill did not remove hemp from the Controlled Substance Act’s (“CSA”) list of illegal drugs.

However, the 2018 Farm Bill removes hemp from the CSA’s definition of “marijuana” and from its list of Schedule I drugs. This means that all products made from industrial hemp, including Cannabidiol (“CBD”) oil, will be legal under the CSA if the product remains under the same 0.3% THC threshold. Additionally, each state is now empowered to regulate commercial hemp farming in the same manner that any other agricultural commodity is regulated.

Due to the various uses of hemp, its federal legalization can bring massive economic benefits to the United States. Hemp can be grown as a renewable source for raw materials that can be incorporated into numerous products. Hemp seeds and flowers are used in health foods, organic body care, and other nutraceuticals. Moreover, the fibers and stalks of the hemp plant are used in construction materials, paper, biofuel, and plastic composites. Lastly, hemp is environmentally friendly because it is grown without pesticides and requires much less water than traditional crops. According to the Hemp Industries Association, the total retail value of hemp products sold in the U.S. in 2016 was approximately $688 million. However, most of the raw hemp materials had to be imported from other countries. This will no longer be the case under the new Farm Bill. Further, it was previously illegal for raw hemp materials to be sold through interstate commerce into states that did not have the mandated industrial hemp pilot programs from the 2014 Farm Bill. The DEA will no longer impede this commercial activity under the new Bill.

Additionally, the 2018 Farm Bill removes any ambiguity surrounding the legal status of hemp-derived CBD oils and extracts. CBD can be used to provide relief from inflammation, pain, anxiety, psychosis, seizures, spasms, and other conditions without any of the side effects traditionally associated with cannabis. These products are commonly marketed as over-the-counter health supplements but have existed in a legal grey area. Consequently, there are not strong regulatory standards governing the CBD industry. This has caused concerns about the quality of CBD products, especially when sold online. However, removing the federal hemp ban will give lawmakers the opportunity to create standards for the burgeoning CBD industry to ensure a safer and higher-quality product. It is important to note that under the current law, the FDA requires any cannabis product, hemp-derived or otherwise, that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce. The FDA is expected to update its CBD regulations in the near future.

As both state and federal industrial hemp and CBD laws progress, it is important to review the regulations carefully and discuss them with counsel. If you are interested in learning more about this topic, please contact Nik Komyati at nkomyati@bressler.com or (973) 245-0671 or Tim McHale at tmchale@bressler.com or (973) 937-6806.