States become more hemp-friendly as farm bill opens up growth potential of the CBD industry

Last year’s highly-touted passage of the hemp-friendly farm bill in Congress has put pressure on many states to initiate or ramp up efforts to strengthen laws supporting the burgeoning CBD industry. And although some legislators still perceive hemp and its CBD-rich extracts to be a public health threat —such as South Dakota’s governor who recently vetoed lawmakers’ attempts to set up a hemp program in the state— most states are taking advantage of the recent bill’s hemp-friendly language. They’re either launching new hemp programs or ramping up old ones.

Although the feds have given the green light for states to develop hemp regulations, hemp and CBD companies are still seeking clarity over the Food and Drug Administration's policy related to CBD—guidance which the FDA says could run into 2020. Meanwhile, in an attempt to speed up the FDA’s efforts to develop rules for CBD, a group of bipartisan lawmakers penned a letter to the now outgoing FDA Commissioner Scott Gottlieb asking the FDA about the agency’s intentions in relation to CBD.

A similar, but separate, letter was sent to the USDA. The FDA announced Tuesday that it would be holding a public hearing in May to gather more information.

[The FDA sets first public hearing date on food and drinks containing CBD as agency considers legalizing compound]

In a similar vein, the USDA began the process of gathering information to create regulations for the commercial production of industrial hemp, including provisions for federally regulated hemp production. The agency said it plans to issue regulations by fall 2019 to accommodate the 2020 planting season. On March 13, the USDA hosted a hemp listening session to receive feedback from stakeholders regarding the regulation of hemp under the recently passed farm bill.

Several states now have plans to exploit this highly profitable crop, as well as their own reactions to the removal of CBD from the DEA’s controlled substances list and the FDA’s subsequent guidance on the matter.

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Courtesy New Frontier Data (www.newfrontierdata.com)

California debates the benefits of CBD edibles

Last summer in California, home of the world’s largest marijuana marketplace, health officials warned retailers that they were forbidden to add CBD to any foods and beverages. This was before the Farm Bill, which is interesting considering the state’s nose-thumbing stance toward federal prohibition of marijuana, a far more controversial food additive which is legal for adults in the state. According to the Health Department, CBD could only be purchased at licensed dispensaries. And edibles were only legal for medical marijuana patients.

California’s CBD retailers did what most in the country had been doing and ignored the warnings. Most are “getting away with it,” but not all.

[California legislation hopes to address lag in approvals for cannabis business licenses]

San Francisco health officials sent warning letters to 1,900 businesses last year. Earlier in this year (after the Farm Bill was enacted, mind you), the San Francisco Health Department warned two small shops to stop selling CBD-infused foods and beverages.

While health officials are just doing their job, according to the letter of the law and according to FDA guidance on CBD, lawmakers in the state are cognisant of the need for fast action to alleviate areas of friction.

Before the farm bill went live back on September 30, 2018, Gov. Brown signed an industrial hemp bill, which went into effect at the dawn of 2019. Before these measures, industrial hemp was only allowed to be grown as a densely planted fiber or oilseed crop, neither of which is conducive to the production of hemp extracts. The new policy made way for an industrial hemp pilot program including sampling and lab testing procedures. However, the rules about the manufacturing and selling of CBD oil were not clarified by the bill.

[Hemp Top 40: major developments in hemp reform since the Farm Bill passed—the good, the bad, and the ugly]

To rectify the situation, near the end of March 2019, California’s Assembly Committee on Health unanimously advanced legislation intended to officially legalize the manufacturing and sale of CBD oil from hemp. Again, snubbing the FDA, Assembly Bill 228 expressly permits the addition of CBD to foods, health supplements, and cosmetics.

The legislation also includes an “urgency clause” which makes the measures therein effective immediately after signing by Gov. Gavin Newsom.

New York embraces hemp, struggles with CBD edibles

In 2015, New York State launched the Industrial Hemp Agricultural Research Pilot Program. The plan permitted a limited number of educational institutions to grow and research industrial hemp. In 2016 the state modified its hemp rules and authorized the distribution, transportation, processing, and sale of industrial hemp.

Then in 2017, the state eliminated the cap on the number of sites authorized to grow and research the plant and expanded the program to include farmers and businesses. Governor Cuomo also introduced and signed legislation to establish industrial hemp as an agricultural commodity. CBD rules, however, were not spelled out in these measures.

[CBD crackdown continues as infused edibles banned in Maine, New York City]

Earlier this year, New York City health inspectors warned several small cafes selling CBD-infused foods and drinks to cease sales and confiscated their CBD. This was in spite of the fact that in mid-December New York state officials gave the green light to food growers and processors to produce and sell CBD-infused food and drink, provided the products were manufactured and sold as dietary supplements, which fall under more stringent standards. In the same breath, officials warned that doing so was against FDA rules.

Lawmakers in the state, hoping to clear the air ASAP, are working up legislation that could end the confusion—hopefully by August of this year.

Texas relaxes restrictions on CBD

Back in March, a district attorney in Fort Worth declared CBD illegal, prompting law enforcement officials to raid two shops and seize CBD products. These actions rallied a public outcry and an end to the clampdown.

Then, only days ago, the Texas Department of State Health Services removed hemp and CBD oil from its controlled substances list, effectively making the purchase of CBD oil legal in the state. The bill still does not, however, allow farming of hemp.

This is seen as a big move for conservative Texas, which has some of the strictest marijuana laws in the country.

North Carolina expands hemp pilot program

According to the North Carolina Department of Agriculture and Consumer Services, CBD edibles are illegal in the state. The department recently sent letters to businesses notifying them that CBD food, drinks, and animal feeds are not allowed to contain CBD. Other non-food CBD products are currently legal in the state. In its annual Farm Act, lawmakers in North Carolina recently expanded the states hemp pilot program to take advantage of the federal Farm Bill. Hemp grown under the state’s pilot program has grown from 222 acres to 8,000 acres in just two years, that’s in addition to 3.4 million square feet of greenhouse space.

There are now 413 licensed processors, which is ten times the number of licensed producers a year ago. CBD oil, however, was not covered in the Farm Act. On the other hand, a Senate bill that would expand the medicinal use of CBD oil in North Carolina is headed to the Senate floor.

Across the rest of the United States

In Wyoming, the Department of Agriculture began prepping for the passage of the Farm Bill by developing a regulatory plan which includes, rules, a fee schedule, applications, and other necessary documents. Gov. Mark Gordon signed HB171/HEA No. 0110 on March 6, and shortly after that, the plan was submitted to the USDA.

Last year, South Carolina implemented rules which allowed 20 farmers to grow experimental hemp crops. The plan was to double that number this year. However, since the passage of the Farm Bill, South Carolina has passed a bill that allows farmers throughout the state to grow and process hemp. On a side note, if a newly developed bill called the Compassionate Care Act passes, the state will also develop a medical marijuana regulatory system.

In Florida, the policy is that CBD is illegal outside of the state’s medical marijuana program. However, that hasn’t stopped stores statewide from selling CBD products. Recently, a bill authorizing the creation of a regulatory system for the cultivation of hemp cleared a House committee by a unanimous vote. A similar, but more expansive measure (which includes details related to the processing and selling of hemp products) is also making progress in the Senate.

Michigan is another state where health officials are warning that CBD products are illegal, regardless of the fact that the state legalized industrial hemp in November 2018 via the Michigan Regulation and Taxation of Marihuana Act. The Department of Agriculture is currently working on its hemp plan and hopes to have it in play in time for farmers to plant a 2019 crop.

In Maine, Gov. Janet Mills recently signed a law which treats CBD as a food rather than a medicine, while legalizing the addition of CBD to food products. The law also expanded the definition of food to include products consumed by animals, like popular CBD dog treats. The emergency bill was introduced and quickly passed after state and local health inspectors began warning retailers to pull foods, beverages, and tinctures off the shelves. The House approved the bill by a convincing vote of 116-1, while the Senate votes 32-1 in favor. The law will become effective immediately upon signing.

Just recently, the North Dakota Senate passed House Bill 1349. The measure, which passed unanimously in both the House and the Senate, aligns the state’s official definition of hemp with that of the federal Farm Bill. Like most state hemp bills, HB1349 requires hemp growers and processors to apply to the state Department of Agriculture for a license.

Ohio is another state that had been clamping down on CBD sales. In January officials ordered a Cincinnati grocery chain to remove CBD from their stores. However, the Ohio Senate recently passed a bill to legalize hemp and CBD. The bill calls upon the state Department of Agriculture, governor, and attorney general to develop a hemp regulatory plan. The bill now heads to the House.

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