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On December 12, 2018, Congress passed the 2018 Farm Bill, which was signed into law by President Trump the following week. Importantly, the bill includes key text regarding hemp that was championed by Senate Majority Leader Senator Mitch McConnell (R-KY) with strong bi-partisan backing:

The 2018 Farm Bill defines hemp as the plant Cannabis sativa L. and any part of the plant with a delta-9 THC concentration of not more than 0.3 percent by dry weight. This definition is consistent with the definition of “industrial hemp” in the 2014 version bill, which created a limited agricultural pilot program regarding research into industrial hemp.

The 2018 Farm Bill removes hemp from the Controlled Substances Act, paving the way for the wholly legal cultivation, possession, sale and distribution of the hemp plant.

The 2018 Farm Bill delegates to states and Indian tribes the broad authority to regulate and limit the production and sale of hemp and hemp products within their borders. States and Indian tribes cannot, however, limit the transportation or shipment of hemp and hemp products through their respective jurisdictions.

Consequences of the 2018 Farm Bill to the Hemp and CBD Industries

In 2017, U.S. retail sales for products containing hemp, including food and beverage products, personal care products, household products, and supplements, reached $820 million. Based on current demand, forecasters project hemp and CBD to be a $1 billion industry by 2020. This year’s passage of the 2018 Farm Bill will certainly boost hemp and CBD production and sales.

Federal legalization means that hemp producers and businesses that deal in hemp and hemp-derived products, such as CBD, are now free to pursue their businesses more aggressively, and with less concern that a seismic shift in enforcement priorities could result in their investigation or prosecution by federal authorities. Following passage of the 2018 Farm Bill, CBD producers, in particular, will have much greater incentive to use hemp as their primary source for CBD (rather than marijuana). It is still important, however, that businesses involved in the hemp industry comply with state and federal regulations regarding legalized hemp, and that businesses selling CBD (including food and beverages) stay clear of the aggressive health-related marketing that may result in unwanted attention from the FDA and carefully navigate the other health and food regulatory issues implicated by FDA oversight.

2018 Farm Bill (Agriculture Improvement Act of 2018)

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