Every five years or so, the United States Congress passes legislation (known as the “Farm Bill”) that sets the national policy on matters related to agriculture, nutrition, conservation, and forestry. One of the most interesting and perhaps significant updates to the latest Farm Bill was the legalization of hemp and hemp-derived products. The 2018 Farm Bill, signed into legislation by President Trump with bipartisan support, represents a major shift in the hemp industry, which is projected to reach $20 billion by 2022.
Its predecessor (the 2014 Farm Bill) had allowed for institutions of higher education and state agriculture departments to grow hemp under a pilot program, as long as their state law permitted it. The 2018 Farm Bill took this several steps forward, legalizing the production of hemp as an agricultural commodity and removing it from the list of controlled substances.
The 2018 Farm Bill is also significant because it includes hemp under the Critical Agriculture Materials Act, which recognizes the plant’s importance, diversity, and major commercial opportunities.
What are the restrictions on hemp cultivation and production under the 2018 Farm Bill?
- Hemp and hemp-derived products cannot contain more than 0.3% THC.
The 2018 Farm Bill established a definition of hemp, officially setting the THC threshold to 0.3%.
This is an important distinction, as hemp was not previously differentiated from other cannabis plants, all of which had been made effectively illegal in 1937 under the Marihuana Tax Act, and formally illegal in 1970 under the Controlled Substances Act.
- Hemp cultivators must obtain a license and comply with state or federal regulations.
Under the 2018 Farm Bill, there is shared state-federal power over hemp cultivation and production.
This means that state departments of agriculture that opt to license and regulate hemp cultivation and production must devise a program in consultation with the governor and chief law enforcement officer of the state. The plan must be approved by the Secretary of the US Department of Agriculture.
Hemp cultivators in states that have opted not to devise their own regulatory programs may apply for a federal license.
What about hemp-derived products like CBD oils, tinctures, edibles, and the like?
The 2018 Farm Bill allows for the broad cultivation of hemp, as well as the transfer of hemp-derived products across state lines for commercial or other purposes. There are no restrictions on the sale, transport, or possession of hemp-derived products, as long as they are produced in a manner consistent with the law.
This means that any hemp-derived products (like CBD oils, gummies, and topicals) must be sourced from state or federally licensed cultivators.
Under the 2018 Farm Bill, any cannabinoid that is derived from hemp is legal if (and only if) that hemp is produced in a manner consistent with the new legislation.
Again, this means that all CBD products must be derived from hemp that adheres to the legislation outlined in the Farm Bill. The only exception is pharmaceutical-grade CBD products that are approved by the FDA, of which there is only one: Epidiolex.
Another important point about the FDA is that even though the 2018 Farm Bill removed CBD from the purview of the DEA and the control substance act, the FDA still regards CBD as a pharmaceutical substance. Since Epidiolex was already approved as a prescription drug, the FDA still regards selling hemp-derived CBD as illegal when it comes to dietary supplement or over the counter drugs.
CBD products that are produced by state-legal medical or recreational cannabis programs are still illegal at the federal level.
Which states have USDA-approved hemp production plans?
|Alabama||Will continue to operate under 2014 pilot|
|Alaska||Will continue to operate under 2014 pilot|
|Arkansas||Will continue to operate under 2014 pilot|
|California||Drafting a plan for USDA review|
|Colorado||Will continue to operate under 2014 pilot|
|Illinois||Drafting a plan for USDA review|
|Indiana||Will continue to operate under 2014 pilot|
|Kentucky||Will continue to operate under 2014 pilot|
|Maine||Will continue to operate under 2014 pilot|
|Maryland||Will continue to operate under 2014 pilot|
|Minnesota||Will continue to operate under 2014 pilot|
|Missouri||Will continue to operate under 2014 pilot|
|Nevada||Drafting a plan for USDA review|
|New Hampshire||USDA Hemp Producer License|
|New Mexico||Will continue to operate under 2014 pilot|
|North Carolina||Will continue to operate under 2014 pilot|
|North Dakota||Will continue to operate under 2014 pilot|
|Oklahoma||Drafting a plan for USDA review|
|Oregon||Will continue to operate under 2014 pilot|
|US Virgin Islands||Under review|
|Utah||Will continue to operate under 2014 pilot|
|Vermont||Will continue to operate under 2014 pilot|
|Virginia||Will continue to operate under 2014 pilot|
|Wisconsin||Will continue to operate under 2014 pilot|
- Drafting a plan for USDA review: the state has expressed interest or intent to submit a plan to USDA in the future
- Under review: USDA actively reviewing the submitted plan
- Pending resubmission: USDA received a plan but returned for edits or amendments to ensure regulatory compliance and consistency
- Approved: the plan is formally approved by USDA
- USDA Hemp producer license: the USDA will issue the producer license
The final word on the 2018 Farm Bill
For centuries, hemp has been revered by cultures and communities around the world, known for its healing properties and wellness benefits. At the same time, it has been branded as both an illicit substance or “snake oil,” depending on where you stand.
The passing of the 2018 Farm Bill was a game-changer in so many ways. Farmers, policymakers, and the general public have shown serious interest in the plant, giving it mainstream legitimacy and paving the way for an entirely new industry to emerge.
And it’s only the beginning.