2018 Farm Bill – Hemp is Legalized

This article originally appeared on Hoban Law Group

At long last, the hemp industry can revel in landmark legislation which has been years in the making. For many years, hemp industry stakeholders have worked alongside bipartisan members of Congress – like Senate Majority leader Mitch McConnell, Representative Jared Polis, and many more – to pass legislation restoring hemp’s appropriate place within U.S. agriculture and beyond.

Where is the 2018 Version of the Farm Bill?

Earlier this week, the conference committee – a committee convened to reconcile differences between House and Senate versions of the bill – issued its final report and reconciled version of the Agricultural Improvement Act of 2018 – otherwise known as the 2018 version of the Farm Bill (the “Farm Bill”). In quick succession, the Senate and the House then approved the the Farm Bill, and we now wait with bated breath for the President’s anticipated signature. Final approval is expected imminently.

What Does the 2018 Farm Bill Practically Do?

Perhaps the greatest impact of the Farm Bill is the galvanization of momentum across the board and throughout the supply chain and ancillary stakeholders:

  • Providing comfort to retailers in bringing products to retail shelves en masse;

  • Providing comfort to banks, payment processors, insurers to provide services to hemp industry stakeholders;

  • Encourage investment and infusions of capital into businesses and infrastructure for both fiber-, seed- and oil-based uses of hemp;

  • Instigate federal, state and local agencies to act affirmatively to authorize and regulate hemp; and

  • Importantly, quiets any question as to the Drug Enforcement Administration’s (“DEA”) lack of authority with respect to hemp

What Does the Farm Bill Legally Do for Hemp?

Once officially signed into law, it is important for us to take a deep breath and celebrate this historic moment and understand the momentous progress the 2018 version of the Farm Bill achieves. Specifically, the Farm Bill serves to clarify and affirm the rightful place of raw hemp as an agricultural commodity, alongside corn and wheat. Notably, these hemp provisions in the Farm Bill state, in part:

  • Hemp is expressly excluded from treatment as “marihuana” under the federal Controlled Substances Act (“CSA”);

  • “Hemp” is defined more expansively to include reference to cannabinoids, derivatives and extracts;

  • The U.S. Department of Agriculture (USDA) shall regulate the cultivation of hemp at a federal level and is instructed to implement regulations according to the Farm Bill;

  • Individual states retain the right to enact legislation and promulgate regulations at the state and local level, subject to approval by USDA;

  • Hemp farmers are specifically authorized to access crop insurance, grants and certifications;

  • Tribal governments are specifically authorized to cultivate and produce hemp;

  • Interference with interstate commerce of hemp and hemp products is expressly prohibited;

  • Controversially, “participation” of felons in hemp programs will be prohibited, though there are specific exemptions and further details likely forthcoming through USDA and state-level rulemaking;

  • The 2014 version of the Farm Bill is to be repealed after allowing for this transitional period; and

  • The Farm Bill does not affect the Federal Food, Drug and Cosmetic Act, which provides the U.S. Food and Drug Administration (“FDA”) authority to regulate permissible ingredients in ingestible products.

Where Do We Go From Here?

At the same time, though the passage of the Farm Bill is incredible news, it is similarly important to remember the work left to be done, which will of course take time – months, if not more than a year – to roll out:

  • USDA must now take the reigns in implementing regulations and/or reviewing and approving state-authorized “plans” for cultivation;

  • There is likely to be a cascade effect at the state level to pass state-level “plans” and implement regulations consistent with the Farm Bill;

  • Attention now turns to FDA with respect to ensuring that hemp-derived cannabinoids – including extracts containing cannabidiol – are to be treated as permissible ingredients; and

  • Resolve bumps in the road that are likely to arise as federal, state and local legislators and regulators work to implement the tenets of the Farm Bill over the coming months and years.

To that end, once we collectively take a moment to deservedly celebrate this momentous occasion, we look forward to rolling up our sleeves and continuing to work alongside hemp industry stakeholders and government officials in ensuring appropriate and sensible regulation at federal, state and local levels. The opportunities many in the industry have long awaited are at the cusp of being realized and this landmark announcement will certainly go down as a seismic policy shift in our nation’s history.

HLG Hemp Practice Group

Robert Hoban, David Bush, Patrick Goggin, Garrett Graff, Darren Kaplan, Matthew Smith, Esqs.

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