2018 Farm Bill

Dynamic Warriors LLC maintains compliance under the current U.S. Farm Bill

The United States 2018 Farm Bill

The 2018 Farm Bill signed into law on December 21, 2018 (“2018 Farm Bill”) allows hemp cultivation broadly, not simply pilot programs for studying market interest in hemp-derived products as was the case with the 2014 Farm Bill. It explicitly allows the transfer of hemp-derived products across state lines for commercial or other purposes. It also places 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 2018 Farm Bill does not create a completely free system in which individuals or businesses can grow hemp whenever and wherever they desire. There are numerous restrictions. First, as was the case with the 2014 Farm Bill, hemp cannot contain more than 0.3 percent THC. 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. 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 the US Department of Agriculture (“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. Third, the 2018 Farm Bill 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 2018 Farm Bill legalizes hemp, but it does not create a system in which people can grow it as freely as they can grow tomatoes or basil. Hemp remains a highly regulated crop in the United States for both personal and industrial production. CBD—a non-intoxicating compound found in cannabis—is not legalized by the 2018 Farm Bill. While hemp-derived products are removed from Schedule I status under the Controlled Substances Act, the legislation does not legalize CBD generally; CBD generally remains a Schedule I substance under federal law. The 2018 Farm Bill—and an unrelated, recent action by the Department of Justice—creates exceptions to this Schedule I status in certain situations. The 2018 Farm Bill ensures that any cannabinoid—a set of chemical compounds found in the cannabis plant—that is derived from hemp will be legal, if and only if that hemp is produced in a manner consistent with the 2018 Farm Bill, associated federal regulations, association state regulations, and by a licensed grower. All other cannabinoids, produced in any other setting, remain a Schedule I substance under federal law and are thus illegal.

 

Further, with the recent approval of CBD as a drug by the Food & Drug Administration, additional scheduling decisions may be determined by Federal agencies that may bring CBD under new types of regulation by the Federal government. Although forty states have legalized hemp cultivation and production at some level or another, and nineteen of those states have legalized commercial hemp growing, companies and individuals remain at risk of being prosecuted by state and/or federal authorities for violations of or non-compliance with state licensing and regulations and the 2018 Farm Bill.