Cannabusiness Advisory

Hemp Legalization: 2018 Farm Bill One Step Closer to Becoming Law

December 19, 2018


Last week, a House-Senate panel approved the 2018 Farm Bill, thereby ending a months-long stalemate over a piece of legislation that provides critical subsidies to farmers. While much of the bill mirrors current law, the legislation, if passed, will bring an end to five decades of hemp prohibition. Hemp was afforded limited legal protections in 2014, when Congress passed a farm bill that authorized states to develop pilot programs for its research. The 2014 Farm Bill eventually gave rise to a patchwork of state regulations regarding hemp and hemp-derived CBD.

While the hemp industry experienced substantial growth under the 2014 Farm Bill, the new bill is undoubtedly a watershed moment for the entire cannabis industry, as its changes to current law are more far-reaching than its predecessor. If passed, the bill would remove hemp’s low amounts of THC from the Controlled Substances Act, allow the U.S. Department of Agriculture to regulate the crop like any other agricultural commodity, and permit hemp products – like CBD – to be introduced into interstate commerce. Further, it would lift restrictions on advertising, banking, and other financial services.

The bill would also:

  • Allow hemp production in all 50 states for any use, including flower production and CBD or other cannabinoid extraction; states may also submit their own plans to regulate hemp
  • Allow interstate commerce for hemp and hemp-derived CBD
  • Authorize the USDA to oversee hemp production, with direction to define rules “as expeditiously as practicable”
  • Legalize hemp production in U.S. territories and on Indian tribal land (which was not included under the 2014 Farm Bill)
  • Give the industry access to federally backed farm support programs, including crop insurance, federal water access, and low-interest loans for new farmers
  • Allow hemp producers to “bring foreign nationals to the United States to fill temporary agricultural jobs
  • Remove barriers to getting intellectual property protections under federal law
  • Set a 10-year ban under which state or federal drug felons cannot participate in the hemp program, except for people already growing hemp under a state pilot project (as established by the 2014 Farm Bill)
  • Require the USDA to consult with the U.S. attorney general on the hemp regulations

Passage of the measure would effectively end the need for U.S. hemp companies to go public in Canada, as they would be allowed to directly access U.S. exchanges like the Nasdaq Stock Market or New York Stock Exchange. While the political climate in Congress is often unpredictable, the bill appears to have momentum: it passed the Senate 87-13 last Tuesday and managed to clear the House 369-47 the following evening. President Trump now has mere days to sign the $867 billion bill into law before Congress’ session ends on Dec. 21st.

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