- Hemp getting the OK nod from the federal government
A provision of the farm bill that received final approval in Congress last Wednesday removes hemp from the list of federally controlled substances and treats the low-THC version of the cannabis plant like any other agricultural crop. THC is the cannabis compound that gives marijuana its high.
President Trump is expected to sign the bill into law next week just before Christmas.
The change sets the stage for greater expansion in an industry already seeing explosive growth because of growing demand for cannabidiol, or CBD, a non-psychoactive compound found in hemp that many see as a way to better health.
Federal legalization could triple the overall hemp market to $2.5-B by Y 2022, with $1.3-B of those sales from hemp-derived CBD products, according to New Frontier Data, a cannabis market research firm.
Hemp, like marijuana, already is legal in some states. Approval at the national level brings a host of benefits that the pot industry has yet to see.
Hemp farmers will be able to buy crop insurance, apply for loans and grants, and write off their business expenses on their taxes like any other farmer.
And those who sell dried flower or CBD-infused products made from hemp can now ship across state lines without fear of prosecution as long as they are careful not to run afoul of the US Food and Drug Administration.
Many did so before, but always looked over their shoulder because the law was unclear.
Hemp looks like marijuana to the untrained eye, but it contains less than 0.3% THC. Federal legislation passed 4 years ago cracked open the door for some farming by allowing states to create hemp pilot programs or to conduct research on hemp cultivation.
At the same time, the total market for hemp, from textiles to seeds to CBD oil has grown from a few million dollars in 2015 to $820-M today and about a 33% of that is from hemp-derived CBD.
Proponents say CBD offers lots of health benefits, from relieving pain to taming anxiety. Scientists caution that there have been few comprehensive clinical studies on how CBD affects humans.
It’s unclear if, or how, the US Food and Drug Administration will react to hemp legalization. The agency said it does not comment on pending legislation.
FDA Commissioner Scott Gottlieb has said in the past that CBD products will be treated like any other products that make unproven claims to shrink cancer tumors or other statements. The FDA has sent warning letters to some companies marketing CBD.
The new bill retains the FDA’s authority over products that contain CBD.