What does the 2018 farm bill mean for CBD companies?

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On December 20th, 2018; President Donald Trump signed and approved the 2018 Farm Bill into law. The 2018 Farm Bill removes hemp from the Controlled Substances Act, shaping the way for the wholly legal cultivation, possession, sale, and distribution of the hemp plant. The bill took effect on January 1st, 2019.  Along with the 2018 Farm Bill, comes underlying consequences for businesses in the hemp and CBD industries. 

In this post –

The Evolution of Hemp and CBD Laws

Before the 2018 Farm Bill was passed, CBD and Hemp industries had major booms in business development. Hemp and CBD contain traces of tetrahydrocannabinol (THC) which causes psychoactive effects. This is why any type of Hemp, CBD, and Marijuana products was banned. However, when you remove the THC component from Hemp and CBD you can use it for multiple health benefits. 

Until December 20, 2018, hemp was categorized as a Schedule I substance under the Controlled Substances Act. According to the federal level, it was illegal to cultivate, possess, or even distribute Hemp and CBD products. The 2018 Farm Bill gives hemp more leeway. It allows hemp cultivation broadly, not simply pilot programs for studying market interest in hemp-derived products. As a hemp testing lab, we look forward to the opportunities this change can bring to our business. 

Additionally, Hemp and CBD research is very important. It was one of the goals for the 2014 Farm Bill to generate and protect research into hemp. The 2018 Farm Bill continues this effort. Section 7605 re-extends the protections for hemp research and the conditions under which such research can and should be conducted. Further, section 7501 of the Farm Bill extends hemp research by including hemp under the Critical Agricultural Materials Act. This section recognizes the opportunity, diversity, and importance of the plant and the products that can be created from it, but also recognizes that there is still a lot to learn about hemp and its products from commercial and market perspectives, especially how it affects CBD testing facilities which test CBD for potency and impurities like ours.  

The Results of the 2018 Farm Bill on CBD Industries

In 2017, U.S. retail sales reached $820 million for products containing hemp, including food and beverage products, personal care products, household products, and supplements. With the help of the 2018 Farm Bill, the Hemp and CBD market should be a $1 billion dollar industry by 2020. One 2018 CBD study, carried out by the cannabis market research firm The Brightfield Group, projected that if the Farm Bill were to pass the CBD industry could expect to be worth as much as $22 billion by the year 2022, dependent on other political and regulatory variables.

The 2018 Farm Bill does not remove all barriers to the consumption and production of CBD products made from hemp. On the same day that the law became effective, the U.S. Food and Drug Administration (FDA) issued a reminder that it continues to have the authority to regulate products containing cannabis under the Federal Food, Drug, and Cosmetic Act. In the statement, the FDA voiced its concern over the number of CBD products that are marketed with claims of healing benefits without having been approved by the FDA. 

Limits to Medical Claims and THC Content

CBD products that will be promoted for use in the cure or prevention of diseases are considered new drugs and must go through the FDA drug approval process before they are branded and marketed. Selling unapproved products with undeclared therapeutic claims breaches the Foods, Drug, and Cosmetic Act. 

While CBD products made from industrial hemp are no longer considered Schedule I substances, CBD products derived from marijuana plants with more than .03 percent THC are not FDA approved and considered illegal. (Even if the finished product itself has less than 0.3 percent THC.) Most of the CBD products we are seeing today fall under the first category. Between, the loopholes and marketing are easy to determine which is legal and illegal. Most well-known CBD products are infused products—beverages, dietary supplements, and creams.

According to attorney Jonathan Miller, he explained how the hemp and CBD industry is so “up in the air” that credit card and bank loan services stay away from it. 

How are CBD producers to react to Federal legalization?

Federal legalization means that hemp producers and businesses that deal with hemp and CBD products are now free to pursue their businesses more aggressively. As long as these businesses keep their products FDA approved they are allowed to produce and sell them. CBD providers use hemp more than marijuana because of legality.  It is still important, that businesses comply with the federal legalization laws regarding hemp and CBD so the FDA does not proceed with unwanted investigations. 

The 2018 Farm Bill has made headway in the process of cannabis becoming fully legal with rules and regulations. 

The 2018 Farm Bill has no effect on state-legal cannabis programs. Over the past two decades, 33 states have legalized cannabis for medical purposes, and over the past six years, 10 states have legalized cannabis for recreational (21+) use. Using cannabis for medical purposes creates room for CBD and hemp products to be used. From state to state, different states have different laws in regards to the production and distribution of hemp and CBD products. The bill may legalize the exploration of it, but states have to approve and make the selling of these products legal. 

At ACS Laboratory We’re Ready to Test

With the 2018 Farm Bill passing, this has helped us grow as a business. Farmers are now able to freely grow these products and with our expertise makes them legal. The purchase of crop insurance is now available to farmers who are growing hemp. Now farmers will be able to grow their export sales without facing federal risks, and they can export to CBD testing labs like ourselves, across state lines, without concern. 

As a result, the Farm Bill is expected to be the missing factor in the CBD industry, as well as the wider hemp farming industry. Between technology today and the science we use to contribute to the production of these products, it will be no time until CBD and hemp products are legal with no strings attached everywhere. ACS Labs looks forward to the success this brings to our CBD analysis lab along with all of our channels.