Regulatory Update

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The passage of the 2018 farm bill was significant for the industrial hemp industry. With the passage of this law in December 2018 hemp is now considered to be an agricultural commodity, which means that it will (in some ways) be treated like other commodities. For example, crop insurance will now be available for hemp producers.

Perhaps more significantly, the law clearly distinguishes hemp from marijuana and removes hemp from the list of Schedule I substances. Prior to the passage of the farm bill, the Drug Enforcement Administration (DEA) considered hemp and marijuana to be under their jurisdiction and classified both as Schedule I substances. The farm bill made clear that the legal distinction between the two is the level of tetrahydrocannabinol (THC) in the plant. In order to legally be considered hemp, the THC level needs to be 0.3% or less. If the THC level in a plant or part of a plant is higher than this, then it is not considered hemp and is likely still considered a Schedule I substance.

See this article for more detail about the impacts of the farm bill on hemp.

What’s Next?

As stated above, hemp is now considered an agricultural commodity. However, this is not the end of the story. Hemp is a unique commodity and some restrictions will remain in place. We are still waiting to find out what some of those restrictions may be. The reason for this is that certain federal agencies have responsibility for regulating hemp and its by-products are now working to create the rules (regulations). The two main agencies with responsibilities related to hemp are the United States Department of Agriculture (USDA) and the Food and Drug Administration (FDA).

USDA

In the farm bill Congress specifically gives the USDA authority to regulate the production of hemp. Specifically, the Agricultural Marketing Service (AMS), an agency within the USDA, will regulate hemp production.

AMS is currently working to draft regulations. It is unclear how long this process will take. The agency has created a website with current information to keep the public up to date. Those with questions or requests for information are encouraged to email farmbill.hemp@usda.gov.

In addition, AMS will host a listening session on industrial hemp production on March 13, 2019, from noon–3 p.m. This webinar will be free and open to the public. Registration is available and is limited to 1,000 people.

FDA

On December 20, 2018 – the day the farm bill was signed into law – FDA Commissioner Scott Gottlieb issued a statement regarding the agency’s authority to regulate products that contain cannabidiol (CBD). Commissioner Gottlieb reiterated that under the Federal Food, Drug, and Cosmetic Act (FD&C Act) the agency has the authority to regulate any food or products that fall within the jurisdiction of the agency under this law. He specifically stated that the FDA has authority to regulate food products and dietary supplements that contain CBD, as well as other products that contain CBD that make health claims. (Note: this statement also specifically says that parts of the hemp plant that do not contain CBD or THC are allowed. This includes hulled hemp seeds, hemp seed protein, and hemp seed oil.)

Since this statement in December, there have been no proposed regulations from the FDA regarding CBD and CBD products. However, at a meeting of the National Association of State Departments of Agriculture (NASDA) on February 26, 2019, Commissioner Gottlieb did acknowledge that regulations were needed for CBD products and that he is aware of this need. However, to date, no official timeline has been given for when this process may start.

State of NC

It is important to note that while these federal agencies are working on regulations to implement the 2018 farm bill the industry continues to operate under the provisions of the 2014 farm bill. In North Carolina, this means operating under the same rules that were in place for the 2018 growing season. For more information, please see the N.C. Department of Agriculture & Consumer Services’ website on the Industrial Hemp Pilot Program.