2018 Farm Bill Passes House and Senate – Hemp is Legal Under Federal Law

by | Dec 21, 2018 | Business Law and Litigation, Hemp and CBD Stores, Marijuana Prohibition |

The US Senate and House have passed a compromise version of the 2018 Farm Bill – a comprehensive $867 billion bill that addresses many of the critical issues facing farmers and includes provisions to legalize and regulate hemp farming.

Assuming the president signs the Bill – and he is expected to – the farming and processing of hemp for CBD oil, rope, clothing, and other hemp products are expected to grow into a $20 billion industry by 2022.

Of course, the legality of hemp farming is still complex and will be determined by state law and regulations – the 2018 Farm Bill’s provisions only remove the federal prohibition.

What’s included in the 2018 Farm Bill and what does it mean for farmers who want to grow hemp in SC?

What’s the Status of the 2018 Farm Bill?

Last week, a compromise version of the 2018 Farm Bill was passed by both the House and Senate – it needs only the President’s signature to become law.

What’s Included in the 2018 Farm Bill?

The 2018 Farm Bill clears the way for states to legalize hemp farming without the cloud of federal hemp prohibition. What else does it do?

  • It revises SNAP (Supplemental Nutrition Assistance Program) but does not cut food stamp benefits – a controversial sticking point that potentially would have cut benefits for over a million households;
  • It expands farm subsidies, including subsidies to nieces, nephews and first cousins of farmers, even if they don’t work on a farm;
  • It provides permanent funding for farmer’s markets, organic farming research, veteran and minority farmers, and training programs; and
  • It continues the Conservation Stewardship Program.   

What Effect Will the 2018 Farm Bill Have on Hemp Farming?

The hemp-related provisions of the 2018 Farm Bill will:

  • Remove industrial hemp from the Controlled Substances Act (you can’t get high from industrial hemp and it never should have been included as a controlled substance);
  • Allow hemp cultivation when it is legal under state law;
  • Allow hemp cultivation on tribal lands when it is legal under tribal law;
  • Authorization transportation of hemp and hemp products over state lines;
  • Allow states to decide whether to authorize and regulate or prohibit hemp cultivation; and
  • Prohibit any person with a drug conviction from working in the hemp industry for ten years following their conviction.

How Does the 2018 Farm Bill Define Hemp?

The 2018 Farm Bill defines hemp as any part of the plant Cannabis sativa L. – including the stalks, seeds, and extracts – that has no more than .3% THC content:

HEMP.—The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.

Didn’t the 2014 Farm Bill Already Legalize Hemp Farming?

The 2014 Farm Bill did not legalize hemp or remove it from the Controlled Substances Act.

It did legalize hemp farming under federal law and remove hemp from the Controlled Substances Act when it was being grown for research purposes and where it was allowed to be grown for research purposes under state law.

The 2018 Farm Bill takes the next step, legalizing hemp cultivation for commercial purposes when state law authorizes it and finally removing hemp from the Controlled Substances Act.

Will the 2018 Farm Bill Legalize Hemp Farming in SC?

Hemp farming is currently legal in SC only if it is done for research purposes pursuant to the 2014 Farm Bill and under the extremely limited provisions of SC law.

In 2018, SC approved only 20 applications for hemp-growing permits, and only 40 permits have been issued for 2019 (out of a total 162 applications).

Although we can expect SC to legalize hemp farming for commercial purposes and to increase the number of permits issued, we will need to wait for the SC legislature to take additional action to authorize hemp cultivation under the 2018 Farm Bill’s provisions.

If you intend to grow hemp in SC under the new laws, you should begin planning now – so far, the permitting process has been competitive and there are many requirements for permits that you need to be aware of.

Does the 2018 Farm Bill Legalize CBD Oil Under Federal Law?

Arguably, CBD oil and other CBD products are already legal under SC state law, although SC law enforcement and SC media outlets have expressed contradictory positions including:

  • CBD oil is legal if its THC content is .3% or less;
  • CBD oil is legal if its THC content is .9% or less; or
  • CBD oil is not legal.

Although I am not aware of any prosecutions, the DEA took the position that CBD oil and other CBD products were illegal under federal law.

That changes after the 2018 Farm Bill passes:

Under the bill, CBD products derived from hemp and containing 0.3 percent or less of the high-inducing cannabinoid THC will be considered legitimate.

“It would no longer be controlled under the DEA’s purview,” said U.S. Drug Enforcement Administration spokeswoman Mary Brandenberger.

The language in the 2018 Farm Bill makes it clear that the hemp plant and any derivatives are no longer considered a controlled substance if they contain .3% or less THC.

The FDA, on the other hand, has issued warning letters to numerous companies who were marketing CBD products as dietary supplements for humans or for pets – the FDA may continue to warn or take enforcement action against companies who make medical claims that have not been approved by the FDA:

It states that CBD products can’t be sold as dietary supplements and that those making medical claims are illegal without its approval. However, the FDA aims its most serious enforcement efforts at products “marketed for serious or life threatening diseases,” according to a statement.

And the dietary supplement exclusion could be revisited, the administration has stated. “The FDA could allow it to be regulated as food and dietary supplements,” said Shawn Hauser of the Colorado law firm Vicente Sederberg, which worked on the hemp legislation.

Can I Grow Hemp in SC?

Yes, if you comply with the 2018 Farm Bill and SC law and if you get a permit from the SC Dept. of Agriculture.

If you are considering growing hemp in SC, you will need to apply for a 2020 permit. If you intend to apply for a hemp permit in SC or sell CBD oil or other CBD products, you should get a SC business law attorney who is familiar with the swiftly changing state and federal hemp and CBD laws on board as soon as possible.  

Call Coastal Law now at (843) 488-5000 or email us about your issue to talk with a Myrtle Beach business litigation attorney today.

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