How the 2018 Farm Bill Will Change the Hemp Industry Forever

The Senate and the House passed the 2018 Farm Bill. Now, the bill will be transferred to The White House with President Trump to soon sign it into law. It will become effective immediately in January 2019.

However, just what does the Farm Bill imply for the CBD market as well as hemp?

Hemp is Versatile

Before we get into the details of the Farm Bill, let's talk about why hemp is so important to the economy. Hemp can be found in a variety of products from foods and fabrics to supplements. This is comprised of food and food products, textiles and clothing, health supplements, industrial applications, and healthcare products.

Additionally, there are many health benefits related to using hemp. Hemp seeds are a natural source of protein and fiber that help with digestion. Furthermore, they contain essential fatty acids, healthful fats, minerals, and vitamin E.

The seeds include omega-3 and omega-6 fatty acids that are considered to boost skin conditions. Arginine, an amino acid, also gamma-linolenic acid (GLA), an omega-6 fatty acid, which may lower the chance of heart problems can also be present in the seeds.

Hemp can likewise be used to manufacture cannabidiol (CBD). In a process similar to creating coconut oil out of coconuts, CBD is extracted from hemp. CBD is the non-psychoactive relative of THC found exclusively in hemp or marijuana plants. 

Additionally, hemp can offer cost-effective alternatives to traditional products. For example, hemp is being used instead of concrete for construction. It is called "hempcrete" and similar to concrete except for being environmentally friendly and non-toxic.

But if hemp is so great, why haven't we been using it this whole time?

Hemp was part of American society as far back as the 1600's. In those times, hemp was a normal part of agriculture. It was used to make clothing, sails, and rope.

In Pennsylvania, Virginia, and Maryland hemp was often used as a legal exchange. The Virginia Assembly, in 1619, actually made a law requiring every farmer to grow hemp. How different from today!

The History of Hemp

In the 1800's, hemp ingredients were frequently found in medicines sold in many stores. By the 1900's, recreational use of marijuana had also begun, and its popularity spread across the country. Finally, most states had prohibited marijuana and hemp cultivation due to the psychoactive properties of marijuana.

Ever since, hemp has had legal problems. Because the ban made it difficult to find worthwhile seeds, seed certification became a problem and the available seeds may not have been legal (i.e. they had more than 0.3% THC limit).

Since seeds had become a controlled substance, they also could not cross state lines. Some states certified seeds with low THC content in an effort to aid growers. There was also the problem of decriminalization and legalization. Growers were at risk because hemp was characterized as a narcotic.

In some states, registration with the DEA may have been mandatory while in other states an affirmative defense for registered growers was the only option.

CBD Federally Legal

April 2018: Mitch McConnell introduces the bill to legalize Hemp

With Kentucky Senator Mitch McConnell (R,KY) leading the way and with the support of Senator Rand Paul (R,KY) and Representative James Comer (R, KY), along with the U.S Hemp Roundtable providing lobbying support and educational information, the 2018 Farm Bill came to include the hemp sections.

It addresses many of the issues identified in the trial that were in similar sections of the 2014 Farm Bill. Ananda Hemp is one of the founding members of the U.S. Hemp Roundtable and provided leadership and support as this bill worked its way through the Senate and House. Their technical expertise and leadership were essential in the success of this bill.

Is CBD Oil Legal?

Senator Rand Paul (R,KY) visits with Eric Wang, CEO of Ananda Hemp at their manufacturing facility in Cynthiana, KY. 

Under the current bill, growers must be certified by a state agricultural program. They will also need a license to grow hemp.

CBD Legal

Former KY Agricultural Commissioner, now Congressman (R,KY), James Comer ready to lobby for hemp legalization in the 2018 Farm Bill.

Now, the 2018 Farm Bill legalizes industrial hemp production nationwide, and a new industry will be born. It licenses hemp growing for commercial use and authorizes research by universities or state agencies which can certify farms to grow for that intent.

Additionally, it authorizes legitimate hemp cultivation and makes hemp an agricultural product eligible for protections, such as crop insurance, from the federal level. 

Is CBD Legal

Ananda CEO Eric Wang and hemp farmer Brian Furnish showing hemp material to Senator Mitch McConnell at the Ananda Hemp processing facility. We can't thank him enough for all his support in taking the steps to #legalize hemp!

The Farm Bill gets updated and passed about every four years to set the nation's policies for food and farming. This year's version of the Farm Bill reportedly cost $867 billion and just passed the Senate and the House with overwhelming support.

The Senate voted 87 to 13 in favor on December 11, 2018 and the House voted 386 to 47 in favor the following day. Now, the 2018 Farm Bill has moved onto the White House and is waiting for President Trump to sign it before it will officially become a law as of January 2019.

Congress faced pressure from farmers and ranchers to pass the bill due to decreased commodity prices from the U.S. trade dispute with China. It not only legalizes industrial hemp, but it will also allocate billions of dollars to farmers and expand safety-net programs for crop producers and dairy farmers.

What does the 2018 Farm Bill do in practical terms?

According to the HLG Hemp Practice group, perhaps the greatest impact of the Farm Bill is the galvanization of momentum across the board and throughout the supply chain and ancillary stakeholders:

  • Providing comfort to retailers in bringing products to retail shelves en masse
  • Providing comfort to banks, payment processors, insurers to provide services to hemp industry stakeholders
  • Encourage investments and infusions of capital into businesses and infrastructure for both fiber, seed, and oil-based uses of hemp
  • Instigate federal, state, and local agencies to act affirmatively to authorize and regulate hemp
  • Importantly, quiets any question as to the Drug Enforcement Administration's (DEA) lack of authority with regards to hemp

The Expanding Hemp Business

The business of hemp is expanding. Hemp commonly describes Cannabis sativa L. strains developed for lawful, industrial usage. In 2018, the selling of legal hemp-based products in the United States reached $1 billion.

This has seriously improved from 2017, where an estimated $820 million value of approved hemp products were sold. This data reveals how the hemp industry has improved within a short amount of time.

As a result of this new Farm Bill, hemp farming will be allowed in all fifty states starting in January 2019. This will likely cause the selling of hemp to skyrocket. According to some reports, the hemp industry could be valued at $20 billion by 2020.

With the help of Ananda, the U.S. Hemp Roundtable, Congress members, and many others – the 2018 Farm Bill is all but signed and the hemp industry is set to explode. This is exciting news, but it is important to remember there is still work to do in terms of implementing these regulations.

Of course, as with implementing any change, this will take time and effort to make sure that federal, state, and local programs can all work together cohesively to execute the Farm Bill. However, once this happens the hemp industry is in for a major overhaul.