By now, we’re all clear that hemp and marijuana are two different creatures, right?
And you might think that the legalization of hemp is no big deal because it’s not like the country is finally stepping up and legalizing marijuana.
But now that hemp is legal in the U.S., it could have wider reaching implications for marijuana.
At least, we hope so.
Why Hemp Is Legal Now
On December 20th, Trump signed the 2018 farm bill – that sprawling (and we mean SPRAWLING) piece of legislation that sets the U.S. government agricultural and food policy for the country.
The bill is renewed about every five years and this year, legalizing industrial hemp was part of the legislation. Of course, the hemp industry has been pushing for legalization for decades. But the plant’s shady, back street association with higher THC varieties kept it imprisoned with heroin and marijuana as a Schedule 1 drug.
Trump’s signature on the bill effectively takes hemp – defined as cannabis below 0.3% THC – out of that classification set by the Controlled Substances Act.
So why now?
The truth is, industrial hemp is an agricultural sector that’s been operating on the fringe of the law for a long time now. Producers have long grown it for the seeds and the fibers and it wasn’t exactly what one would call a huge cash cow. But growing hemp has become a far more lucrative venture.
And we all know why. (Hint: It’s CBD.)
CBD (Cannabidiol) Is a Potential Multibillion-Dollar Market
Although a cannabis plant, hemp does not produce the psychoactive component of marijuana. But it does still contain CBD, which is a hot commodity these days. Even from hemp. It’s showing up in beverages, health products, and snacks for both you and your pet iguana.
And you can bet that executives, CEOs and those tied only to the hemp-growing industry are all aquiver over this. They’re most certainly heralding the farm bill as a major victory for business owners and consumers.
Still, nothing is absolutely assured.
There are still questions around how exactly the Agriculture Department will regulate the plant. Because the reality is, like cannabis — which is illegal under U.S. federal law although some states have allowed medical or recreational use — states are still able to enact their own laws related to CBD and industrial hemp.
This could create a potential patchwork quilt of legislation across the country. Sounds festive and pretty, but is really more of a hot mess.
How the New Law Reads
To be clear, cannabis plants above 0.3% are still defined as Schedule 1 drugs. Licensed hemp producers, however, cannot be charged with a crime if their hemp exceeds the THC limit, making it marijuana.
But THC that comes from hemp is no longer deemed a controlled substance.
- The U.S. Department of Agriculture (USDA) is required to develop national hemp regulations “as expeditiously as practicable,” which is an uncertain time frame. The national plan must include procedures for checking hemp plants’ THC content and plans to destroy plants that exceed the THC limit.
- The U.S. Food and Drug Administration (FDA) will retain authority over foods, drugs and cosmetics. That means that while CBD becomes legal January 1st, 2019, it will NOT be legal to add hemp or CBD to food products or dietary supplements.
- There will be no deadline for states, territories and Indian tribes to submit hemp-regulation plans to the USDA. But once they do submit a proposal, the USDA has 60 days to approve or reject it.
- If a state’s hemp-oversight plan is rejected, the growers will be “subject to a plan established by the (USDA) to monitor and regulate that production.”
- The USDA has one year to study the 42 hemp states’ progress with the plant. From there, they will determine the economic viability of the domestic production and sale of industrial hemp, and deliver their findings to Congress.
It all seems fairly clear cut, though it should be noted that the Farm Bill gives no direction for how law enforcement is supposed to determine whether THC came from legal hemp or from illegal marijuana. So things could get a little tricky there.
But all in all, the truth is this:
Legalizing Hemp Is Good News
Hemp is legal in the U.S. and marijuana entrepreneurs are hopeful because it could open a channel to accessing public markets and other financial tools unavailable to companies selling Schedule 1 drugs.
And it may even loosen laws around the popular marijuana extract CBD.
So no matter how you cut it, it’s a good thing.
If you’re a marijuana entrepreneur looking to expand your client base, there’s no time like the present. We can help you more effectively target your audience to help you expand and grow.