Congress just voted to pass a $867 billion farm bill, one that has strong support on both sides of the isle. The bill was brought to Congress partly because of President Trump’s trade war with China and partly to overhaul old legislation. In a 386 to 47 vote, the House of Representatives sent the bill to President Trump to be signed into law. While the bill is structured to bolster the farm industry, it also legalizes hemp, which will positively benefit cannabis companies. According to an article in the Washington Post, by the year 2022, hemp could grow to a $20 billion industry.
An Important Distinction
Earlier in 2018, Senator Mitch McConnell added language from the Hemp Farming Act of 2018 into H.R., the Agriculture and Nutrition Act of 2018. The language essentially makes it legal for people to grow and sell hemp. This is the form of the plant that has less than 0.3 percent THC, the chemical found in cannabis that has psychoactive properties. By changing the language, government officials are removing industrial hemp from the Controlled Substances Act. With industrial hemp no longer considered a controlled substance, the states will oversee its production, research and sales structure.
The National Conference of State Legislatures reports that as of last August, 40 different U.S. states permit residents to cultivate hemp for the purposes of commercial, pilot or research programs. Nancy Whiteman, the CEO and founder of a CBD infused product company out of Colorado, said, “The cannabis industry is closely watching the outcome of the Farm Bill, and while we are seeing a lot of startups try to move in, nobody is better suited to operate in this market than experienced licensed cannabis manufacturers.”
For the last 10 or more years, marijuana infused developers have been searching for precise ways to test, dose and supply their product. These companies are industry leaders and will continue to lead the way as the next generation of CBD products becomes available.
Operating in a Legal Gray Area
The Farm Bill moves CBD out of its current legal gray area and into one without fear of repercussion and fines. Since it has been functioning in a gray area, the industry has remained fragmented and small. Despite operating this way, the CBD industry has grown by an estimated 80 percent this year to reach $590 million. As it makes its way into the light, mainstream distribution channels will open it up to large consumer goods companies within conventional industries like drinks, pet, skin care, tobacco and beauty.
Even though the Farm Bill is a big step forward for the current hemp industry, the FDA has yet to approve CBD as a food additive, dietary supplement or food ingredient. This could limit the Farm Bill’s scope. On an official note, the FDA only permits the use of oil from hemp seeds and fiber in food products. Recently, the California Department of Public Health released a state policy preventing hemp-derived CBD in food products, siding with the FDA. Regardless, many people see the Farm Bill as an important step that could lead to the product moving into the everyday lives of citizens. Legalization is always an arduous process, one that takes multiple minor and major victories to complete. Those in the CBD industry are considering the Farm Bill a major victory.
Not Just Another Commodity
With the Farm Bill passing, farmers will have the option of growing hemp without being worried about problems with the federal government. It allows farmers to expand their crops and enter new markets. Not only will struggling farm families find relief, but the CBD change in the bill opens up research, allowing for the possibility of a new and effective way to treat multiple medical conditions.