As 2018 was ending, the hemp industry celebrated a big win
In December, Congress approved the 2018 Farm Bill, which changes the way hemp is treated in the U.S.—now, it will be seen as any normal crop instead of a “quasi-controlled substance.”
Here’s a look at what was approved in the bill and what it could mean for the cannabis industry.
Hemp farming and beyond
Hemp is one variety of cannabis that is considered non-psychoactive, meaning it doesn’t have the same brain-altering effects as marijuana. The 2018 Farm Bill legalizes hemp production, specifically of industrial hemp that has 0.3 percent or less of tetrahydrocannabinol (THC).
This is a big deal for the industry, in that it removes industrial hemp from the Controlled Substances Act of 1970, which sets forth regulations on illegal substances.
The 2018 Farm Bill will change the way farmers approach hemp agriculture. Two of the key changes to hemp production are:
- Industrial hemp is now legalized, including its extracts, cannabinoids and
- Hemp producers are now eligible for federal crop insurance.
States will now have a chance to regulate hemp production to take advantage of economic benefits. Also, federal grants from the U.S. Department of Agriculture will now be available to those who are researching hemp and its effects.
Government officials including Senate Majority Leader Mitch McConnell, an advocate of the bill, said back in June that much of the hemp products that American consumers are buying have been imported since American farmers weren’t able to farm hemp because of federal regulations related to cannabis.
The Farm Bill removes industrial hemp from those regulations, thus allowing American producers to get in on the profits.
What this means for CBD
Many in the cannabis extract market were happy to hear about the 2018 Farm Bill win for hemp, as hemp-derived cannabidiol (CBD) is now legal.
However, a day after the Farm Bill was signed by the president, the FDA released a statement with a clear message: they will still be rigorous about CBD inspections and regulations, and the legalization of industrial hemp doesn’t mean that producers can then put hemp into certain products and claim that they have health benefits.
The statement says that “This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements.”
As with any big change in regulations, the FDA wants to be sure that the market doesn’t go crazy with producers trying to take advantage of the potential benefits of the now-legal, hemp-derived CBD.
Predictions for the future
While some hemp farmers have already seen big impacts on their 2019 growing season, some are worried about the lack of testing standard details. One hemp producer’s director who talked to the Hemp Business Journal said that even though hemp crops have to be tested by certified labs, there are not really uniform testing standards yet, and states will have to decide how to approach the testing.
Another concern is that there will be too much hemp production since there isn’t a cap on how much can be cultivated per producer.
While the passage of the 2018 Farm Bill is a win for the hemp industry, it’s yet to be seen if this means a wider acceptance of cannabis, in general, can be expected. However, many states have been taking action, including Michigan, which voted to legalize recreational marijuana in 2018. The state now allows those over age 21 to carry up to 2.5 ounces of cannabis, though it’s still illegal to use on certain properties, like schools or other public properties.
Even though the future is still fairly unknown, predictions show that the industry is set to continue growing. By 2024, the cannabis industry is predicted to grow to $800 million in revenue.
The Hemp Business Journal predicts that the hemp industry will grow at a combined annual growth rate (CAGR) or 18.4 percent over the next five years and that by 2022 it will reach $1.3 billion.
The passage of the 2018 Farm Bill could be one step of many to come that move the cannabis and CBD industries forward.
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