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What Does the U.S. Farm Bill Mean for the CBD Industry?

September 01, 2022 5 min read

What Does the U.S. Farm Bill Mean for the CBD Industry?

What Does the U.S. Farm Bill Mean for the CBD Industry?

The Farm Bill legislation passed in December 2018 significantly impacted the cannabis industry, specifically on CBD oil products. This article highlights everything you need to know about the 2018 Farm Bill and the cannabis laws within the different U.S states.

The CBD industry is becoming increasingly popular as a dietary supplement. The CBD industry is an economic activity concerned with processing cannabinoid raw materials and manufacturing CBD products in factories. The first farm billing deal passed on 1933 was to financially support farmers during an imbalance of supply and demand hence ensuring that there would be enough food supply during the famine period. Later, Congress passed a more permanent farm bill in 1938, needing to review and update the statement every five years (Lehrer, 2018). This farm bill was referred to as Agricultural Adjustment. Since 2008, many farm bill revisions have been done.

The 2018 Farm Bill

This bill was signed by president trump in 2018, which continued with funding and policies put into place in the 2014 farm bill (Lehrer, 2018). 2018 farm bill one had an exception from previous farm bills, which was the federal legalization of industrial hemp.

What’s the Deal with the Farm Bill and CBD?

In 1970, hemp products were classified as schedule 1 drugs. The new farm bill will legalize the cultivation of industrial hemp for any use, including the production and extraction of CBD (Black, 1930). Growing oh hemp will be classified as any other regular agricultural crop. Americans can begin cultivating, selling, and buying federally-subsidized crop insurance.

Factors Legalizing Hemp in the United States

 The farm bill allows the transfer of hemp-derived products across state lines for commercial use or any other use. As long as the hemp-derived products are produced in the required manner, it does not restrict sales, transport, or possession.

Growing hemp crops is not a free system you can grow them whenever and wherever you want (Black, 1930). Some restrictions put by the Farm Bill guide the farmers in growing hemp. Those restrictions include:

The Hemp Should Not Contain More Than 0.3% of THC

Although the growing of hemp is allowed by Farm Bill in the U.S., the grown hemp plant should not contain over 0.3% THC compound. Industrial hemp should have below 0.3% THC because this content is believed to be very low, so it cannot get the user high (Black, 1930). To some extent, the cannabis plant comprising over 0.3% THC is considered marijuana beneath federal law. Farm Bill legislation will not protect this kind of hemp plant.

There will be significant, shared state-federal regulation power over hemp cultivation and production.

State departments of agriculture must consult with the state's governor and chief law enforcement officer. It is stated under section 10113 of the Farm Bill. The state’s governor and principal law will help devise a plan submitted to the USDA secretary. If the USDA secretary has not given their approval, a state's licensing and regulation of hemp should not begin (McClure, 2018). Once the USDA secretary has approved the state's plan, then regulation and licensing by the state can commerce.

The hemp cultivators must comply with federal-run programs even if they are from the states unwilling to devise hemp regulation programs. USDA will construct a regulation program for those hemp cultivators.

The Law Outlines Actions Considered a Violation of Federal Hemp Law

Such Federal law violations include cultivating hemp without a license and producing cannabis with over 0.3% of THC. Such violations result in punishment for the cultivators; they should comply with the laws.

It means that Farm Bill legalizes the growing of hemp plants in a controlled manner. It is a highly regulated crop for personal and industrial production in the United States.

Hemp Products Vs. Other Agricultural Commodities in the U.S

Hemp products are treated the same as other agricultural commodities in the U.S. under the Farm Bill. Although some provisions regulate hemp heavily, several provisions of the Farm Bill change the existing conditions of agricultural law to include hemp (McClure, 2018). Section 11101 of the Farm Bill provides hemp farmers protection under the Federal Crop Insurance Act. It will help the farmers who may face crop termination due to climate change.

Consequences of the 2018 Farm Bill to the Hemp and CBD Industry

Based on the current demand for hemp products, it is believed that there will be billions of dollars brought by CBD products by the end of 2022. In 2017, hemp extract was sold everywhere in food and beverage products (McClure, 2018). They were also sold as personal care, households, and other supplement products. Farm Bill was to boost the growth of hemp and CBD production as well as sales.

Legalizing hemp growth by the federal means businesses that deal with hemp-derived products are free to pursue their business more aggressively. CBD producers are incentivized to use their hemp as the primary source (McClure, 2018). Regardless of the legalization of hemp growth, the industry must comply with state and federal regulations.

The farm bill does not mean that CBD will immediately flood into stores across the state. Although CBD is an out-of Schedule 1 controlled substance, it is still subjected to regulation from the FDA.

Although hemp will be lawful at the federal level, states will also have a say in the growth of hemp (McClure, 2018). It means that state agricultural departments and Native Americans can regulate hemp growth like any other agricultural commodity.

CBD Is Made Legal-Under Specific Circumstances

According to section 12619 of the Farm Bill, CBD products are removed from schedule 1 status of the Well-ordered Substances Act, but the legislation does not legalize CBD in general (McClure, 2018). Farm Bill ensures that any cannabinoid derived from hemp using the required guidelines is made legal. The only approved CBD- infused medicine by the FDA is Epidiolex which was approved for treating epilepsy in children aged two years and above.

Conclusion

The 2018 Farm Bill was signed by president trump in 2018, which continued with funding and policies put into place in the 2014 farm bill. 2018 farm bill one had an exception from previous farm bills, which was the federal legalization of industrial hemp. For hemp to be protected by the 2018 Farm Bill, it must adhere to the farm Bill guidelines and not contain over 0.3% of THC. According to section 12619 of the Farm Bill, CBD products are removed from schedule 1 status of the Well-ordered Substances Act, but the legislation does not legalize CBD in general. Farm Bill ensures that any cannabinoid derived from hemp using the required guidelines is made legal.

References

Black, J. D. (1930). The Agricultural Adjustment Bill. Journal of Farm Economics, 12(4), 611. https://doi.org/10.2307/1230472

Blair, S. G. (2019). Cannabidiol (CBD) in the Therapeutics Industry. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3439383

Lehrer, N. (2018). U.S. farm bills and the "national interest": a historical research paper. Renewable Agriculture and Food Systems, 35(4), 358–366. https://doi.org/10.1017/s1742170518000285

McClure, J. (2018). 2018 Farm Bill Update. CSA News, 63(7), 35. https://doi.org/10.2134/csa2018.63.0732.