On December 20, 2018, Trump signed the 2018 Farm Bill, which designated industrial hemp a federally legal agricultural crop. Industrial hemp is defined as cannabis sativa plants containing 0.3% or less THC. Although some states had previously legalized hemp for research purposes, the 2018 Farm Bill allows hemp farmers to purchase crop insurance, obtain bank loans, and write off business expenses on their federal tax returns. Hemp will now be treated like any other agricultural commodity.
Immediately after the signing of the Farm Bill, Federal Drug Administration (“FDA”) Commissioner Scott Gottlieb issued a statement reiterating his agency’s stance that cannabidiol (“CBD”) is a drug ingredient and cannot be added to food or health products without approval from his agency. Commissioner Gottlieb explains:
[I]t’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. This is because both CBD and THC are active ingredients in FDA-approved drugs and were the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply, or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.
The FDA statement provides, however, that three ingredients derived from hemp — hulled hemp seeds, hemp seed protein and hemp seed oil — are “Generally Recognized as Safe”; and thus, these products can be legally marketed in foods without food additive approval, provided they comply with all other requirements and do not make disease treatment claims.
So this means that we can all become hemp farmers, right? Not so fast. Each state will have to submit a plan to the US Department of Agriculture (USDA) about how it will move forward with hemp cultivation. Washington State, for example, which currently allows industrial hemp cultivation only for research purposes will need to determine how it will regulate industrial hemp for consumer use and consumption. For more on what states must do to regulate hemp production, see my prior post. If the state government chooses not to make such a plan, hemp producers will submit a license application to the federal government.
Although many questions remain as to how hemp will be regulated state by state, there is no question that this is a game changer for the CBD industry. The removal of hemp and its derivatives from classification as a Schedule I substance per the Federal Controlled Substances Act, will allow for CBD to make its way into products for the mainstream consumer market. There is no doubt that this will upcoming year will be an exciting one for the hemp and CBD industries, stay tuned to this blog further updates on industrial hemp legalization.
For more information on the regulation of hemp and marijuana businesses in Washington State, please contact Heather Wolf.