The 2018 Farm Bill: What This Means for Hemp

On December 12, the United States Congress voted to pass the Agriculture Improvement Act of 2018, more commonly referred to as the Farm Bill, with President Trump expected to sign the Bill into law within the next few days, at the time of writing.

As well as including important policy extensions for certain areas in agricultural and nutritional policy for the next five years, the bill also confirms the legalization of hemp — the term given to cannabis containing less than 0.3% tetrahydrocannabinol (THC) — and provisions for its cultivation, transport, and sale.

The Hemp Farm Bill passes Congress with ease

Both chambers of Congress passed the Farm Bill by landslide margins, with the House of Representatives approving the bill in a 369 to 47 vote and the Senate by 87 to 13. The strong bipartisan support for the bill can be credited for the most part to the Senate Majority Leader Mitch McConnell, a Republican senator from the state of Kentucky. The Senator has been a longtime supporter of hemp legalization in his home state, believing that hemp farming could be an alternative to the “cash crop” of tobacco that is commonly grown in Kentucky; hemp is becoming increasingly important to the textile industry, as well as in areas like cosmetics or biofuel production, and so represents a tangible opportunity for future explosive market growth.

McConnell still takes a hard line against any reform in marijuana law, but the senator’s understanding of the hemp market, as well as his position of power and respect within the Republican party, has undeniably been the driving force behind this bipartisan effort to recognize the hemp industry.

What is hemp's history?

Previous legislation, namely the 1937 Marihuana Tax Act and the 1970 Controlled Substances Act, failed to make any distinction between the cannabis and hemp plants - as a result, hemp was banned and classified as a Schedule 1 drug alongside cannabis in the same schedule as heroin, LSD and ecstasy. With the passing of this Farm Bill, that difference has now been officially recognized and the prohibition lifted.

In many states, small pilot programs for hemp cultivation and study have been running for several years as a consequence of the 2014 Farm Bill. This bill allowed the creation of small state-level pilot programs for the growth and study of industrial hemp if a state wished to do so. These programs were subject to the approval of both the U.S. Department of Agriculture (USDA) and the state departments of agriculture and were highly restricted in terms of their operation.

Under the 2018 Farm Bill, the cultivation of hemp will be allowed much more broadly. As the legislation has passed at a federal level, hemp and hemp products will also be allowed to be moved across state borders.

There will be some restrictions still in place. Namely, the definition of hemp as a cannabis plant containing less than 0.3% THC is written into the Farm Bill (Section 10113), and so any cultivators found to be producing cannabis with a higher THC percentage would be subject to federal penalties.

Secondly, regulation of hemp cultivation will be a tandem effort between the USDA and the state level departments of agriculture. States may produce a plan for licensing and regulation of hemp that must be approved by the USDA before broader hemp cultivation can begin. Alternatively, in states which opt not to do this, hemp cultivators can apply for licenses from the USDA and will be expected to comply with a federally operated program. This sort of shared regulatory system is already common in many other fields, such as in health care (with the Affordable Care Act, or ACA), or in workplace safety (through the Occupational Safety and Health Administration, or OSHA).

Hemp research to be boosted

The allowance of industrial hemp pilot programs in the 2014 Farm Bill was a significant milestone point in hemp research. In the 2018 Farm Bill, there are two further sections which will have importance to hemp researchers. Firstly, Section 7605 further extends the protections for hemp research and researchers and the conditions in which hemp research can be done. Section 7501 formally introduces hemp into the Critical Agricultural Materials Act in recognition of the plant’s importance in terms of the potential diversity of applications. These two sections should enable hemp researchers to conduct their research more freely and with more ease than before.

Increased protection for farmers

One of the most important aspects of the Farm Bill with respect to those in the hemp industry is the normalization of hemp, akin to any other type of agricultural crop. As an extension of this effort to normalize hemp, Section 11101 of the 2018 Farm Bill includes a provision that would see hemp farmers become protected under the 1980 Federal Crop Insurance Act. This would allow hemp farmers to take out insurance against any unexpected crop losses incurred during a normal production cycle, such as loss due to forest fires or droughts.

With the agricultural industry worldwide already bracing for increased natural disasters and unpredictable/extreme weather as a result of climate change, having access to these sorts of insurance procedures can help protect the livelihoods of those working in the hemp industry.

The 2018 Farm Bill CBD consequences 

A common misunderstanding surrounding the passage of the Farm Bill is that the legislation has also legalized cannabidiol (CBD) and various CBD products. This stems from a clause in Section 12619 of the Farm Bill which removes hemp-derived products from Schedule 1 of the Controlled Substances Act, and the observation that CBD can be derived from hemp plants.

Federally, CBD will remain illegal, but the Farm Bill does create certain exceptions to this rule. Under Section 12619, any cannabinoid that is derived from hemp would be considered legal, provided that the production meets all of the federal regulations, state level regulations, and other guidelines in a manner that is consistent with the Farm Bill (such as the production being carried out by a licensed cultivator in an appropriate setting). If any of these conditions aren’t met, then the cannabinoid produced would be considered illegal under the Controlled Substances Act.

An exception to this is the commercial CBD products that are specially approved by the U.S. Food and Drug Administration (FDA), such as the CBD-based anti-convulsant medication Epidiolex.

It should also be noted that the Farm Bill will not change anything affecting state-level medicinal cannabis programs. CBD products produced by or produced for state-level medicinal cannabis programs will not be legalized under the Farm Bill even if its production would be consistent with the rest of the Bill, as medicinal cannabis remains illegal at the federal level.

Still, it is thought that the legalization of hemp will boost the pre-existing CBD industry, which is projected to be worth around $1 billion by the year 2020. The legalization of CBD in these select circumstances may also fuel further research into the health benefits and applications of CBD, as well as other cannabinoids derived from hemp.