With the enactment of the 2018 Farm Bill, the waiting game began for the federal government’s rules on hemp commerce.
In the meantime, hemp-derived products including cannabidiol, or CBD, occupy a landscape that’s both legally murky and economically lush.
Hemp is by far the highest-profile aspect of the $867 billion Farm Bill that President Donald Trump signed into law Dec. 20. Prior to last year’s Farm Bill, the federal government limited hemp cultivation to pilot projects that the states could pursue. But by removing hemp-derived products from the list of Schedule 1 drugs under the Controlled Substances Act, the bill made CBD a legitimate cash cow.
The CBD market alone could grow to $16 billion over the next six years, according to a February report by Cowen, a market research rm. As one would expect, Colorado’s existing cannabis market and cultivation system puts it ahead of the curve. More than a quarter of all U.S. acreage de- voted to growing hemp is in Colorado, according to Vote Hemp’s U.S. Hemp Crop Report.
The 2018 Farm Bill was a “fantastic” development for hemp cultivators and processors, said cannabis law- focused attorney Marshall Custer, a partner at Husch Blackwell’s Denver office. “From my standpoint and what I hear from my clients, it’s nothing but positive news.”
The Farm Bill removed the cloud surrounding whether selling hemp products was per se illegal under federal law. But it directed federal agencies like the Department of Agriculture and the Food and Drug Administration to regulate the commodity. It remains unclear exactly how strictly the USDA and FDA, as well as individual states, will regulate hemp, Custer said.
THC: MEETING THE THRESHOLD
The Farm Bill defines hemp as a cannabis sativa-derived product with a limit for THC, the psychoactive component of marijuana, of no more than 0.3%. The limit is the same under Colorado state law.
Any product cultivated as hemp that still manages to test at above 0.3% THC would be considered marijuana under federal law, so even now, dealing in hemp across state lines isn’t without its risks of legal exposure.
“The biggest thing from a legal perspective … is that 0.3% threshold,” Custer said. He added that it can be tricky to ensure all processed hemp product stays under the legal ceiling, and that can lead to trouble when it gets transported across states where marijuana remains illegal.