Federal Hemp & CBD Law
*The information on this page regarding the 2018 Farm Bill is for educational purposes only and is not legal advice.
Effects of the 2018 Farm Bill
1. Hemp Exempted From Controlled Substances Act
The 2018 Farm Bill exempted Hemp, defined as Cannabis, including all derivatives, extracts, and cannabinoids, with a delta-9 tetrahydrocannabinol (THC) concentration of no more than 0.3 percent from the Controlled Substances Act (CSA). This exemption will open up banking, credit card services, and intellectual property protection to hemp businesses. Additionally, hemp businesses will no longer be subject to the substantial tax burden of Section 280(e).
2. Not Legal Nationwide, States Decide
The Farm Bill does not legalize hemp nationwide. This was a change from the Senate version to the final version. States can choose to (1) keep hemp illegal as long as transportation of hemp is allowed through the state; (2) regulate hemp themselves; or (3) allow hemp businesses to apply for federal licenses through the USDA.
5. CBD is Still Classified as a Drug
CBD is still classified as a Drug under the Food, Drug, and Cosmetic act, meaning it continues to be illegal to introduce CBD food or dietary supplement products into interstate commerce under FDA regulations.
6. Hemp is Eligible for Federal Crop Insurance
Hemp is now expressly an agricultural commodity in the United States, and is eligible for the federal crop insurance program.
7. Convicted Felons Cannot Participate
Those convicted of felony drug crimes, arguably the most affected by cannabis criminalization, will not be allowed to participate in the hemp industry unless they were already involved prior to the enactment of the Farm Bill.
3. Individual State Regulation
If states choose to legalize hemp, states must first exempt hemp from their own Controlled Substances Acts, and then must either regulate hemp themselves, or allow hemp businesses to submit to federal licensing and regulation. This means there will likely be a patchwork of hemp laws throughout the USA which must be successfully navigated by hemp businesses.
4. Less Severe Violation Penalties
Violations for negligent reporting or accidental growth of cannabis above 0.3% delta-9 THC are minimal and are not of a criminal nature. Intentional violations are more severe and reported to both the Attorney General, and the chief law enforcement officer in the state.
8. Agricultural Act of 2014 Transition
The Agricultural Act of 2014 is repealed after a one-year transitional period, beginning when the USDA establishes its regulated hemp system. Additionally, the USDA must submit findings of the state pilot programs enacted between 2014 and 2018 to Congress within one year of enactment.
9. Marijuana is Still a Schedule I Drug
Marijuana, or non-exempted cannabis, is still as Schedule I substance under federal law.