OEN NewsThe 2018 Farm Bill: Challenges Remain for the Hemp Industry

Post contributed by Carla Quisenberry

The Agriculture Improvement Act of 2018 (the 2018 Farm Bill) was signed into law on Dec. 20, 2018. The 2018 Farm Bill differs in a number of significant ways from the 2014 Farm Bill with respect to industrial hemp, most significantly is that the 2018 Farm Bill clarified that industrial hemp, and its derived products, including cannabidiol (CBD), are federally legal. Specifically, industrial hemp (defined Cannabis sativa L. plants containing less than 0.3% of tetrahydrocannabinol (THC)) and its derivatives are now excluded from the Controlled Substances Act. The 2018 Farm Bill directs the US Department of Agriculture (USDA) to issue implementing regulations. Each participating state will submit a plan to the USDA regulate the production of industrial hemp and the USDA will have 60 days to review the plans. The 2018 Farm Bill also includes a number of other significant provisions such as explicitly prohibiting states from preventing the transportation or shipment of hemp or hemp products through the state for commercial or other purposes, and extending federal crop insurance coverage to industrial hemp.

While there are a number of reasons for those in the hemp industry to be excited about the implications of the 2018 Farm Bill, challenges remain.

First, although enactment of the Farm Bill obviously eliminates a major obstacle for production and marketing of hemp and its derivatives (including CBD), it’s not clear how production and marketing of such products can proceed pending USDA’s issuance of implementing regulations and the approval of state plans. The USDA is directed to issue regulations and guidance “as expeditiously as practicable,” and U.S. Senator Ron Wyden (D-OR) and U.S. Senate Majority Leader Mitch McConnell (R-KY) recently sent a letter to US Secretary of Agriculture urging USDA to ensure that the provisions from the Hemp Farming Act of 2018 included in the 2018 Farm Bill are implemented expeditiously and follow Congressional intent, but some delay seems inevitable.

One clause affected by this delay is the provision prohibiting states from preventing the shipment of hemp or hemp products through the state. Recently, law enforcement in other states has confiscated raw Oregon hemp as illegal cannabis. In some cases, the truck drivers are now being charged with a criminal offense. The Oregon Department of Agriculture has issued an alert regarding the potential risks with shipping hemp or hemp commodities out of state, warning that Oregon hemp law ends at the Oregon state line. Until the USDA approves a state hemp regulatory plan for Oregon that meets the requirements of the 2018 Farm Bill, other states may continue to enforce their state-law prohibitions against transporting/shipping hemp through those states.

The second challenge is for those in the CBD edible or supplement market. The 2018 Farm Bill explicitly states that it does not affect or modify the authority granted to the Food and Drug Administration (FDA) under the Federal Food, Drug, and Cosmetic Act, including for hemp-derived products. FDA issued a statement immediately after the signing of the Farm Bill, reiterating that it is FDA’s current view that “it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.” (Emphasis added.) In their statement, FDA acknowledged that there is significant public interest in this area and FDA plans to evaluate whether they should issue a regulation allowing the use of CBD in food or dietary supplements. FDA intends to hold a public meeting for stakeholders and based on input provided at the meeting, FDA will consider the lawful pathways for such products to be marketed, and how FDA can make those pathways more predictable and efficient. When the meeting will take place and the nature of those pathways is still unknown.

These challenges will hopefully be resolved or clarified soon but in the meantime it is important for those in the industry to account for current risks and plan for continued uncertainty.

About the author:

Carla Quisenberry is an attorney with Miller Nash Graham & Dunn. She counsels cannabis-related clients on protecting their intellectual property assets and assists cannabis businesses with state licensing issues and related disputes. Her practice also includes patent, trademark, and copyright acquisition, litigation and licensing, and in matters related to trade-secret misappropriation and unfair competition. Carla can be reached by email at carla.quisenberry@millernash.com or by phone at 503.205.2306.

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