Few days are more significant to the hemp industry than December 20, 2018. On this day, President Donald Trump approved the Agricultural Improvement Act of 2018, effectively marking a drastic change in the federal hemp policy.
But while the Farm Bill of 2018 has many people excited about the potential market for this new cash crop, regulatory restrictions remain both at state and federal levels. With these restrictions bearing implications for virtually everyone in the hemp industry, understanding the finer details of the Farm Bill is critical if you’re looking to get involved.
So, what is the Hemp Farm Bill of 2018 and what does it mean for those looking to grow and/or sell hemp products?
What is the Hemp Farm Bill of 2018?
To understand the intricate details of the 2018 Farm Bill and how it’ll change the future of commercial hemp production, you need to appreciate how it improved the previous bill – the 2014 Farm Bill:
Overview of the 2014 Farm Bill
The Farm Bill of 2018 improves on the provisions of the 2014 Farm Bill, which only allowed state agriculture departments and institutions of higher education to cultivate hemp under pilot programs, provided state law allowed it.
One of the milestones of the 2014 Farm Bill was establishing a legal definition of industrial hemp, which set the legal THC threshold at 0.3% by dry weight. At the time of the bill’s drafting, all cannabis types were classified as Schedule I controlled substances.
Even though it legalized the cultivation of hemp, specific aspects of the plant’s production remained subject to DEA oversight, and that included the importation of hemp seeds.
The 2018 Farm Bill: What It Entails
The Agricultural Improvement Act of 2018 took significant strides towards easing the regulatory restrictions imposed by the 2014 Farm Bill on hemp cultivation.
First, it declared hemp an agricultural commodity, effectively allowing cultivation of the plant for commercial purposes. Additionally, it removed hemp from the list of controlled substances. Last but not least, the bill classified hemp as an eligible candidate for crop insurance coverage and directed the Federal Crop Insurance Corporation to streamline the development of hemp policies.
But while these were the highlights of the 2018 Farm Bill, there were other provisions. One of them was directing the secretary of agriculture to examine hemp pilot programs implemented under the 2014 bill along with other relevant research on the subject in a bid to determine the economic viability of hemp’s domestic market.
Other provisions of the bill included actions that would amount to violations of the law such as growing hemp without proper licensure and cultivating plants with more than 0.3% THC content by dry weight. Outlined along with the violations were the potential legal actions against those who break the law for the first time as well as repeat offenders.
Lastly, the 2018 Farm Bill set up a joint federal and state regulatory system that laid out the powers and responsibilities bestowed on each body with regards to regulating the cultivation and production of hemp. The joint regulatory system required state departments of agriculture to coordinate with governors of state and law enforcement agencies to create licensing and regulation plans.
Any state’s plan to license and regulate the production of hemp can only be effected after the Secretary of the USDA gives it the green light. In states that choose not to license and regulate hemp production, the USDA was tasked with creating a regulatory program that allows hemp producers in their jurisdiction to apply for licenses under the oversight of a federally run program.
The 2018 Farm Bill’s Implications for the Hemp Industry
The passing of the Farm Bill has two key implications for growers and companies that deal with hemp:
Hemp Growers Get the Same Treatment as Other Farmers
Recognizing hemp as a mainstream agricultural cash crop was one of the most important provisions of the 2018 Farm Bill for hemp growers. Despite concerns among law enforcers that hemp could be comingled with the other cannabis varieties with more than 0.3% THC, hemp farmers will face fewer regulatory barriers when cultivating the crop.
Classifying hemp as mainstream cash crop also paved the way for hemp growers to qualify for farmer’s protection under the Federal Crop Insurance Act. With this recognition comes assistance for farmers who lose their crops in the course of normal production.
In the face of climate changes and a relatively “new” cash crop whose growing will take some getting used to, these regulations and protection will be crucial for hemp farmers going forward.
CBD Becomes Legal, But Under Specific Conditions
One of the biggest misconceptions surrounding the 2018 Farm Bill is that cannabidiol (CBD) gains legal status. Sure, section 12619 of the bill does remove products derived from hemp from Schedule I controlled substances. However, this doesn’t legalize CBD per se.
According to the bill, CBD from hemp plants can only be treated as legal if all of the following conditions are met:
- The CBD was derived from hemp that was cultivated according to the provisions of the Farm Bill
- The hemp used meets associated federal and state regulations
- The crop used to produce CBD was cultivated by a licensed farmer
All cannabinoids derived under any settings that don’t meet the above stipulations remain classified as a Schedule I substance and are therefore illegal. The only exception to this rule is FDA-approved pharmaceutical CBD products.
Hemp Farm Bill of 2018: The Bottom Line
Ultimately, the 2018 Hemp Farm Bill succeeded at legalizing hemp and expanding the economic potential for its production. However, one major shortcoming still lingers – it didn’t create a system that allows growers to cultivate hemp as freely as other cash crops.
But despite this shortcoming, the bill’s positive implications suggest a bright future for the hemp industry. We can expect hemp to take over a range of industrial sectors, including the textiles, construction (hempcrete), and paper industries.