Is CBD Oil Legal in 2020? [Important Info]

CBD Oil is now federally legal in the United States! 

However, there are some caveats. First, let's recap the recent legal history of the versatile and controversial hemp plant.

Agricultural Act of 2014: Farm Bill Sets the Stage for Hemp Legalization

Signed by former President Barack Obama on February 7th, 2014, the 2014 Farm Bill established a clear distinction between hemp and marijuana (hemp contains less than .3% THC by dry weight). Additionally, it authorized higher education institutions or state departments of agriculture (in states where hemp was legal) to conduct pilot programs and research - Ananda Hemp was born out of these pilot programs, which helped pioneer the CBD industry in the U.S. 

The purpose of this was to determine whether or not growing hemp would be beneficial for American farmers and businesses. While CBD was still far from being federally legal at this point, rights to legally grow and distribute hemp/CBD were granted to a handful of pilot companies to essentially test the market.  

We were one of the first companies to receive licensing to grow hemp in Kentucky, and the first to be granted permission from the DEA to import live cannabis seeds for planting. 

 

DEA license to import hemp seeds, granted to Ecofibre

Agriculture Improvement Act of 2018: Hemp Becomes Federally Legal 

President Donald Trump signed this bill on December 20th, 2018, and legalized hemp (defined the same as in the 2014 Farm Bill) on a federal level, therefore removing it from DEA regulation and making it an agricultural commodity. Also, CBD (as long as it's from hemp - not marijuana) was removed from Schedule I status, and moved down to Schedule V (defined as having a low potential for abuse and dependence).

However, this legality only applies to hemp grown in the United States under strict supervision of the U.S. Department of Agriculture. This is an important distinction, as any CBD products on the market containing imported hemp from foreign countries are not legal.  

Additionally, this bill grants the power to states and Native American tribes to enact their own laws regarding the production and sale of hemp within their borders. However, they may not restrict the shipment or transportation of hemp within their jurisdiction. 

At Ananda Hemp, we are grateful to have played a central role in the passage of the 2018 Farm Bill, beginning with the founding of the U.S. Hemp Roundtable. We maintained a consistent presence in Washington D.C., educating congressman and policy-makers on the benefits of hemp. 

In 2018, a congressman visited our facility in Kentucky, holding a press event that was central to the passing of this revolutionary bill. 

Is CBD Oil Legal in All 50 States in 2020?  

 

 

Where Are We Now?  

While the legalization of hemp was incredibly exciting, it was long overdue and only the beginning of a long process. CBD manufacturers are chomping at the bit to receive guidelines from the FDA on how to market hemp and CBD.  

Since the FDA has officially classified CBD as a drug, it cannot currently be used in dietary supplements. However, the FDA's strict stance on going after companies making health claims is easy to understand - to quote Dr. Scott Gottlieb, former commissioner of the FDA: 

"Patients may be misled to forgo otherwise effective, available therapy and opt instead for a product that has no proven value or may cause them serious harm."

Yet, ironically, this is precisely why the current laws must change. If CBD is allowed to be marketed and regulated as a dietary supplement, all those unscrupulous vendors selling contaminated or ineffective products will immediately disappear from the industry.  

Presently, there are no regulations in place, allowing a multitude of companies to deceive consumers and sell low-quality (sometimes dangerous) CBD products. Dr. Gottleib claims that he "gets asked at almost every Capitol Hill meeting [about CBD]”, and as such, we can only hope that change and clarity are coming very soon.  

Newly appointed FDA commissioner Dr. Stephen Hahn stated on Wednesday that his agency is working to move forwards with creating CBD regulations. Hahn also said:

"We’re not going to be able to say you can’t use these products. It’s a fool’s errand to even approach that. We have to be open to the fact that there might be some value to these products, and certainly Americans think that’s the case. But we want to get them information to make the right decisions."

Legal classification of hemp CBD oil as a dietary supplement

Botanical Safety Consortium

Announced in February 2019 by former FDA commissioner Dr. Scott Gottlieb, the purpose of the Botanical Safety Consortium is to gather leading minds from the industry, academia, consumer-interest groups, non-profits, and the government to further scientific advances in determining how to better evaluate the safety and efficacy of botanical ingredients in dietary supplements. 

This new collaborative group was likely created in part after the FDA tested a variety of CBD products - and found a complete absence of cannabinoids. Worse yet, they found heavy metal and pesticide contaminations in some. This concern is why we always publish our Certificates of Analysis directly on our website. At Ananda Hemp, our loyalty is to customer safety, quality, and transparency.  

SAFE Banking Act of 2019 

safe banking act 

Passing through the House of Representatives on September 25th, 2019, the Secure and Fair Enforcement Banking Act proposes to "...generally prohibit a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate marijuana-related business."  

Mainly, it would ensure that banks would not be held liable for facilitating financial transactions for CBD/hemp businesses. It would also mandate the Federal Reserve and FDIC to give clear guidelines to financial institutions about the legality of hemp commerce (both of which have been significant obstacles for hemp companies since the passing of the 2014 Farm Bill). 

Unfortunately, this bill faces an uphill battle going through the senate, as many have voiced legitimate concerns, such as Mike Crapo, chairman of the Senate committee on banking: 

"Significant concerns remain that the SAFE Banking Act does not address the high-level potency of marijuana, marketing tactics to children, lack of research on marijuana's effects, and the need to prevent bad actors and cartels from using the banks to disguise ill-gotten cash to launder money into the financial system." 

Interim Final Rule 

US department of agriculture and hemp legalization

On October 31st, 2019, the USDA published the Interim Final Rule designed to establish the Domestic Hemp Production Program. The IFR is the foundation of what will be testing and licensing protocols, eligibility rules for federal programs, seed certification programs, importing/exporting hemp, and production compliance - as well as the procedures for the USDA to approve each of these plans. 

While the IFR is an excellent step towards creating the infrastructure and guidelines for overall hemp production in the U.S., it has a frustrating absence of any stipulations regarding the sale and marketing of hemp/CBD products. Countless CBD companies are bursting at the seams with exciting and innovative ideas for products containing Cannabidiol - and are turning blue while holding their breath and waiting for the FDA to open the floodgates.  

Fortunately, the USDA dropped the initial requirement for CBD testing laboratories to register with the DEA for the duration 2020. However, this rule will still come into effect in 2021. 

The Peterson Bill (HR5587) 

However, you don’t have to just sit around and wait for the government to act. You can make your voice heard and help the hemp movement in 2021! Encourage your Representative to co-sponsor HR 5587, a bill introduced on January 13th of 2020 that would force the FDA's hand and allow CBD sales as a dietary supplement, as well as a food/beverage additive. 

HR 5587, also known as Peterson’s Bill (as it was created by Rep. Collin Peterson, Chair of the House Agriculture Committee) would also require a study and report on the regulatory and market barriers for farmers engaged in hemp production from the U.S. Department of Agriculture - which oversees the production of hemp. Peterson has this to say: 

“The last two Farm Bills were landmark successes for hemp, but we are still very early in this process, and growers need regulatory certainty. This bill will allow the FDA to regulate CBD that comes from hemp as a dietary supplement, providing a pathway forward for hemp-derived products. It would also identify barriers to success for hemp farmers, informing growers and policy makers of the challenges facing this new industry.”

It would also create an exception for CBD to be a “prohibited act” in Section 301(ll) of the Federal Food, Drug & Cosmetic Act (FDCA), which bars the introduction into interstate commerce of a food (including a dietary supplement ingredient) that was first studied as a pharmaceutical drug. 

In addition to introducing HR 5587, Peterson sent a ‘Dear Colleague’ letter to the other members of Congress - see it for yourself here. 

The FDA has repeatedly cited the FDCA as the reason it cannot declare CBD as dietary ingredient - and therefore has done almost nil to regulate the exploding market other than send out ominous warning letters to companies making health claims about their products. You have the power to make your voice heard, and fight for a better and greener future! 

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