We have a 2018 Farm Bill passed in Congress (finally!) The House just passed the vote on the 2018 Farm Bill (“Act”), which includes the full text of the Senate’s Hemp Farming Act of 2018. The Senate passed the Bill yesterday. The President will have ten days after the date on which he receives the enrolled bill to sign or veto the Bill.
The 2018 Farm Bill’s hemp provision will provide certainty not only to businesses in the hemp industries, but also to government agencies, such as the United States Patent and Trademark Office (“USPTO”) and the Drug Enforcement Agency (“DEA”), that have been vastly confused over how the prior 2014 Farm Bill interacted with other federal legislation, such as the Controlled Substances Act.
We are exceedingly pleased that the Hemp Farming Act provisions made it through the Joint Conference Committee and subsequent vote, as the passage of this Act will alleviate many ambiguities in the law that our industrial hemp, cannabidiol, and other cannabinoid clients face on a daily basis. We hope to see the President sign the Bill into law.
What does the Farm Bill say about hemp?
So what does the 2018 Farm Bill actually say about hemp and how does it impact you? We’ve read the full text of the Act’s hemp provisions and provide a section by section analysis for you below:
New Hemp Definition
Under Section 297 (a) of the Act, hemp is defined as
“the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
How does this definition compare to the 2014 Farm Bill’s definition of industrial hemp? Congress has now expanded the definition of hemp to include the following language: “including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers…” This language was included to clarify the status of popular cannabinoids derived from hemp, such as cannabidiol. Through this definition and specific use of the term cannabinoids, Congress clarifies that all cannabinoids found within the hemp plant, along with extracts and other derivatives, fall under the Act’s definition of hemp.
Section 297 (b) establishes new procedures for submitting a plan for industrial hemp cultivation programs for both States and Indian Tribes. The Act provides that these entities must include the following within their plan submissions:
A plan to maintain information regarding the land on which the hemp will be grown, including a legal description of the land, for at least three years;
Procedures for testing THC levels, by using post-decarboxylation or other reliable testing methods;
A procedure for disposal of hemp or products in violation of the Act (example: a hemp plant containing more than .3% dry weight THC); and
A procedure to comply with the enforcement procedures of the Act.
The submitted plan may include any other practice or procedure for regulating the growth of hemp, as long as such practices are consistent with the Act. The Secretary of Agriculture must approve the plan no later than sixty (60) days after receipt of the submitted plan, if it complies with the requirements noted above. If the plan is disapproved, the applicant may submit an amended plan. The Secretary may also provide technical assistance in developing the plan.
If a hemp producer negligently violates a provision within its State’s plan or Tribal plan, the State department of agriculture or Tribal government may provide for a corrective action plan to ensure the hemp producer’s compliance. If the hemp producer commits three violations within a five year period, their ability to produce hemp is revoked for a period of five years, beginning on the date of their third violation.
Lastly, Sunder Section 297(d), the Secretary of Agriculture has sole authority to issue federal regulations and guidelines relating to the production of hemp.
Under the Act, if you have been convicted of a controlled substance felony under State or Federal law, you may not participate in (such as through employment) or engage in the cultivation of hemp for a ten year period following the date of your conviction. For those already working in the hemp industry, the Act contains an exception for any person who was already growing hemp lawfully under a program established pursuant to the 2014 Farm Bill.
Grant Funding for Research
Section 7501 establishes that grant funding for hemp research is eligible under the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319d(c)(3)(E)) and the Critical Agricultural Materials Act (7 U.S.C. 178c(b)(9)).
Secretary’s Report on Pilot Industrial Hemp Programs
Section 7605 requires that , no later than twelve months after enactment of the Act, the Secretary of Agriculture must submit a report reviewing pilot industrial hemp programs which were established under the 2014 Farm Bill to determine the economic viability of domestic production and sale of industrial hemp.
Crop Insurance for Hemp
Section 11106 of the Act amends the Federal Crop Insurance Act and establishes that hemp is an agricultural commodity eligible for federal crop insurance. Amendment of Section 508(a)(2) of the Federal Crop Insurance Act (7 U.S.C. 1508(a)(2)) ensures that hemp is eligible for coverage both pre and post-harvest.
Controlled Substance Act Amendments
Section 12619 of the Act amends the Controlled Substances Act as follows: “the term ‘marihuana’ does not include hemp as defined in section 297A of the Agricultural Marketing Act of 1946.” The definition of tetrahydrocannabinols is specifically modified to “except for tetrahydrocannabinols in hemp (as defined under section 297A of the Agricultural Marketing Act of 1946)’’.
No Interference with Interstate Transportation of Hemp
Section 10114 is a rule of construction, meaning that this rule governs how courts and other agencies shall interpret the Act. The rule of construction provides that nothing in the Act authorizes interference with the interstate commerce of hemp or hemp products. The Act specifically provides that “No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.” This would include interference with transportation or shipment of hemp or hemp products across state lines by the DEA.
Key Takeaways from the Bill’s Hemp Provisions:
The most notable provisions of the 2018 Farm Bill regarding hemp are the following:
We now have cannabinoids derived from hemp specifically falling under the definition of hemp. This is certainly going to help cannabidiol companies whose federal trademark applications have been denied by the USPTO. Within the past year, the USPTO has taken the default position that cannabidiol is a Schedule I substance, regardless of whether it was extracted from compliant industrial hemp pursuant to the 2014 Farming Bill. Despite multiple attempts by attorneys across the country to demonstrate otherwise, the USPTO has remained steadfast in its position. The new definition will help all government agencies to understand that cannabinoids derived from hemp are legal goods, as long as the hemp from which they are sourced is produced under a pilot program (already established under the 2014 Farm Bill) or under a new Plan, as defined in the new Hemp Farming Act.
The Controlled Substances Act has been amended to clarify that hemp is not included with the definition of marijuana and that tetrahydrocannabinol derived from hemp is exempted from the scheduling of THC. This will certainly constrain the DEA’s sporadic enforcement actions. However, it will not likely stop DEA seizures of hemp shipments, as the DEA is expected to maintain the position that if a dog sniff or field test show THC, then it must conduct lab testing to determine the source material for the THC.
Hemp is now eligible for crop insurance coverage. This will certainly be a relief to farmers across the nation. Though some private insurers have offered hemp crop insurance, it is often at an inflated and unsubsidized rate, due to the perceived risk the insurer was taking by insuring a crop that might be illegal under the CSA (pre-amendment).
No, the 2018 Farm Bill does not make Hemp or CBD Legal in all 50 States
I am always astounded by the amount of CBD websites that proudly display that their .3% and under CBD products are “100% legal in all fifty states.” If, at the time you are reading this or in the near future, you are looking to purchase a CBD product and see a website making that statement, run. It simply is not true. In fact, numerous states specifically schedule tetrahydrocannabinol, regardless of its source.
For example, THC remains a Schedule I substance in Texas, with one statutory exception for medical use pursuant to Tex. Occ. Code § 169; Tex. Health & Safety Code § 487. If anyone persists with the notion that CBD is “legal in all fifty states,” tell them to bring their .3% products to certain counties in Texas. Recently, a large cannabidiol manufacturer who was visited by no less than twelve Department of Public Safety Officers and multiple Drug Enforcement Agency offices, would certainly attest to the fact that THC remains illegal here. If your paperwork is in order and testing shows the products have non-detectable THC, you may get your seized products back.
While you can correctly state under the 2018 Farm Bill that hemp and all cannabinoids derived from hemp under the Act are legal at the level, you certainly cannot make that representation as to all of the . Nor are States required to enact a Plan under the Act. Any state may continue to bar production of hemp crops. Here in Texas, we are hoping to see our Legislature pass legislation permitting hemp cultivation within the State as an agricultural commodity. If they fail to pass legislation and the State Agricultural Department does not submit a Plan under the new Act to the Secretary of Agriculture, it will remain illegal to grow hemp anywhere within the State.If this is something that you want to see changed, you need to contact your Texas senators and representatives now. Our next legislative session starts soon, and we won’t see another one convene until 2021.