The 2018 U.S. Farm Bill is set to remove hemp from the DEA’s list of controlled substances, priming the CBD industry for a huge explosion in sales should it pass. Presently, however, the bill still sits in Congress, with the current bill set to expire on Sunday. And despite the backing of Senate Majority Leader Mitch McConnell, the hemp industry waits with bated breath to see what happens next.
CBD, of course, is the non-psychoactive cannabinoid derived from the hemp plant that many people use for its supposed therapeutic properties. The market for CBD grew sixteen percent last year in the United States alone. But, despite the fact that CBD is technically legal in all fifty states (as per the 2014 version of the Farm Bill), many states continue to restrict the extract in some way.
Even California, the first state to legalize medical marijuana, has laws that hinder the development of CBD products. And California is not the only state to address the CBD industry at the state level. Ohio is also implementing regulations on CBD that mirror those of medical marijuana, while Wisconsin is on track to enjoy profits from a state-regulated CBD industry.
These state-by-state differences exist because of varying interpretations of the law. While some argue that the Ninth Circuit in San Francisco cleared things up earlier this year, others believe that CBD cannot enjoy full legal status until the 2018 Farm Bill is passed with the Hemp Farming Act.
With its passing, the United States could see a fully legalized and regulated hemp industry. Until then, though, CBD is forced to walk a fine line. Here’s what you need to know about CBD in the United States and where and how CBD state laws are changing.
In July, the California Department of Public Health (CDPH) released a statement legally limiting CBD. CBD is only legal when extracted from marijuana and sold within the state’s medical marijuana program. Producers can still use industrial hemp seeds to extract CBD oil, but industrial hemp does not fall within the state’s legal parameters.
The CDPH statement clarifies the state law, saying “CBD derived from cannabis is regulated within California as a cannabis product and may only be sourced from, produced, and sold by those with commercial cannabis licenses. CBD derived from industrial hemp is not an approved food additive.”
This very thin distinction is aimed to protect CBD consumers from unregulated and unsafe products. It also distinctly separates the duties of the state’s Cannabis Safety Branch from those of the Food and Drug branch. Either way, though, there has been no formal enforcement of the new rules. Many hemp-derived CBD products are still being sold with little no to legal repercussion.
Unlike California, Ohio state law makes no distinction between hemp-derived or marijuana-derived CBD. In Ohio, CBD and THC are both considered cannabis and are treated as such. The state pharmacy board clarified early this week that CBD could only be sold in a licensed medical dispensary:
“All marijuana products, including CBD oil, can only be dispensed in a licensed Medical Marijuana Control Program dispensary. Those marijuana products will have to comply with the rules and regulations of the program. All products must have a known source, as well as known quantities of active ingredients. Testing procedures will be conducted by testing laboratories licensed by the Ohio Department of Commerce.”
According to state law, because CBD oil is defined as marijuana, it cannot be sold until Ohio’s medical marijuana program is up and running. What target="_blank"does this mean for the vendors already selling CBD oils? According to a report by Cleveland’s local WKYC news, vendors will be slapped with class action lawsuits. Regardless, the locals have no intention of taking any product off their shelves at this time.
In a more positive turn of events for CBD, Wisconsin farmers are getting ready to harvest hemp for the first time since the 1950s. After legalizing industrial hemp, the Wisconsin state Senate also voted unanimously to remove CBD from its controlled substance list earlier this year. This does not give CBD full legalization. Rather, CBD is only legal in a medical capacity. A doctor must prescribe CBD to treat a medical disorder, or patients must have other “certification” proving that “the individual possesses cannabidiol to treat a medical condition.”
While the rules surrounding CBD are strict, to say the least, they exist to direct the state’s Department of Agriculture “to establish a state industrial program.” This includes licensing, testing, even criminal background checks on producers and cultivators. There is also a statement written into the law which orders the state to legalize CBD should the United States legalize the cannabinoid nationwide.
The Hemp Farming Act and the 2018 Farm Bill could make legal CBD a national reality for investors. Eliminating the federal scheduling around hemp would open the market up to an industry slated to rake in $22 billion by 2022. In the meantime, states are forced to develop their own regulations that seemingly create more and more red tape for an industry already bogged down by legal discourse. It is not too much to say that the industry as a whole could benefit from a little legalization, but investors will have to wait until the end of the month for Congress to rule.