Farm Bill and Future of Hemp

The 2018 Farm Bill fills in the gaps left by the 2014 Farm Bill and clarifies that hemp and hemp products are legal. Passed by a wide bipartisan majority (386-47 in the House and 87-13 in the Senate), the legislation is a gargantuan 641-page document in which just a few provisions concerning hemp are buried among many others that address farm subsidies, food stamps, crop exports, conservation practices, crop insurance, rural development, animal health, specialty and organic crops, and assistance to beginning farmers and ranchers. 

While the hemp provisions may be short, they are nonetheless mighty.

Section 12619 of the 2018 Farm Bill amends the Controlled Substances Act in two ways:

  1. It removes hemp from the definition of marijuana in section 102(16) of the Controlled Substances Act, 21 U.S.C. § 802(16).

  2. In listing THC as a Schedule I controlled substance in section 202(c) of the Controlled Substances Act, 21 U.S.C. § 812(c), it creates an exception for tetrahydrocannabinols in hemp.

Section 10113 of the 2018 Farm Bill defines hemp more broadly than the 2014 Farm Bill defined “industrial hemp” thus eliminating any question that both the plants and products derived from the plants are legal, so long as the THC concentration does not exceed 0.3 percent. In that regard, section 10113 provides that “the term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Any cannabis plant or product that contains more than 0.3 percent THC will still be considered marijuana under federal law. 

The newly enacted legislation does not mean that hemp will immediately become a cash crop or that farmers can grow it as freely as they do corn, soybeans, wheat or tobacco. Before hemp can be grown outside of a pilot program conducted by an institution of higher education or a state department of agriculture, the state in which it is grown must first create – and the U.S. Department of Agriculture (USDA) must approve – a plan under which the state will monitor and regulate production. 

Each state regulatory plan must include a practice for maintaining information regarding the land where hemp is grown, a procedure for testing THC concentration, a procedure for disposing of plants and products produced in violation of the law, and a procedure for ensuring that the state will take appropriate actions for violations of federal hemp laws. In states that do not devise their own regulatory programs, the USDA will create a federal licensing scheme. One year after the USDA creates its plan, the provision of the 2014 Farm Bill that authorized pilot programs for industrial hemp will be repealed so that all hemp will be grown under the auspices of a state or federal regulatory scheme.

Hemp is legal in the United States—with serious restrictions

The allowed pilot programs to study hemp (often labeled “industrial hemp”) that were approved by both the U.S. Department of Agriculture (USDA) and state departments of agriculture. This allowed small-scale expansion of hemp cultivation for limited purposes. The 2018 Farm Bill is more expansive. It allows hemp cultivation broadly, not simply pilot programs for studying market interest in hemp-derived products. It explicitly allows the transfer of hemp-derived products across state lines for commercial or other purposes. It also puts no restrictions on the sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law.

However, the new Farm Bill does not create a completely free system in which individuals or businesses can grow hemp whenever and wherever they want. There are numerous restrictions.

First, as noted above, hemp cannot contain more than 0.3 percent THC, per section 10113 of the Farm Bill. Any cannabis plant that contains more than 0.3 percent THC would be considered non-hemp cannabis—or marijuana—under federal law and would thus face no legal protection under this new legislation.

Second, there will be significant, shared state-federal regulatory power over hemp cultivation and production. Under section 10113 of the Farm Bill, state departments of agriculture must consult with the state’s governor and chief law enforcement officer to devise a plan that must be submitted to the Secretary of USDA. A state’s plan to license and regulate hemp can only commence once the Secretary of USDA approves that state’s plan. In states opting not to devise a hemp regulatory program, USDA will construct a regulatory program under which hemp cultivators in those states must apply for licenses and comply with a federally-run program.  This system of shared regulatory programming is similar to options states had in other policy areas such as health insurance marketplaces under ACA, or workplace safety plans under OSHA—both of which had federally-run systems for states opting not to set up their own systems.

Third, the law outlines actions that are considered violations of federal hemp law (including such activities as cultivating without a license or producing cannabis with more than 0.3 percent THC). The law details possible punishments for such violations, pathways for violators to become compliant, and even which activities qualify as felonies under the law, such as repeated offenses.

Ultimately, the Farm Bill legalizes hemp, but it doesn’t create a system in which people can grow it as freely as they can grow tomatoes or basil. This will be a highly regulated crop in the United States for both personal and industrial production.

Hemp research remains important

One of the goals of the 2014 Farm Bill was to generate and protect research into hemp. The 2018 Farm Bill continues this effort. Section 7605 re-extends the protections for hemp research and the conditions under which such research can and should be conducted. Further, section 7501 of the Farm Bill extends hemp research by including hemp under the Critical Agricultural Materials Act. This provision recognizes the importance, diversity, and opportunity of the plant and the products that can be derived from it, but also recognizes an important point: there is a still a lot to learn about hemp and its products from commercial and market perspectives. Yes, farmers—legal and illegal—already know a lot about this plant, but more can and should be done to make sure that hemp as an agricultural commodity remains stable.

Leave a Reply

Your email address will not be published. Required fields are marked *