Congressional Researchers Outline ‘Diverging’ Priorities For Federal Hemp Laws Under Trump Administration

As lawmakers prepare to once again take up large-scale agriculture legislation in the new session, congressional researchers are providing an overview of the policy landscape around hemp—emphasizing the divides around various cannabis-related proposals among legislators, stakeholders and advocates.

In a report from the Congressional Research Service (CRS) that was published this month, analysts discussed the economic conditions surrounding the hemp industry and different relevant considerations for lawmakers who are expected to take up the Farm Bill again this year.

“Hemp industry priorities for the next farm bill vary by national and regional groups, often with diverging policy goals and priorities, thus complicating policymaking,” CRS said. “These priorities often are tied to the primary hemp products a group produces and/or represents or to the part of the hemp plant used.”

To that point, hemp interests are especially focused on how Congress will navigate an emerging issue concerning rules for intoxicating hemp-derived cannabinoid products such as delta-8 THC. Last year, there were several attempts to impose strict restrictions on such products at the state and federal level.

Differentiating between non-intoxicating “industrial” hemp items such as grain and those that are marketed for human consumption is “consistent with other countries,” the report says.

“Accordingly, for industrial hemp growers, regulatory requirements such as testing and background checks would have been reduced or eliminated” under the 118th Congress proposals, it says. “Industrial hemp growers also would not face restrictions involving a prior felony conviction related to a controlled substance.”

CRS separately said in a report last June that hemp provisions included in one spending bill that moved through committee could also “create confusion” for the industry due to a lack of clarity around the type of allowable products.

The researchers also said in their latest report that most hemp advocates “seek to expand [U.S. Department of Agriculture, or USDA] farm program support for hemp and hemp products.”

“Selected efforts include expanding USDA hemp research (e.g., genetics and soil carbon sequestration and phytoremediation potential), improving processing capacity of hemp fibers and their use in a range of bio-based products, and adding hemp to the statutory definition of a specialty crop (which could qualify hemp for USDA grants tied to that definition),” the report says. “Other hemp-related efforts include expanding federal crop insurance for hemp and improving access to credit and banking services.”

Meanwhile, USDA and the Office of the U.S. Trade Representative (USTR) recently added more hemp industry stakeholders to key trade advisory committees to promote the crop globally.

USDA is also set to launch its latest annual survey to hemp farmers across the country this month in an effort to better understand the state of the industry.

The department said the surveys are meant to “collect information on the total planted and harvested area, yield, production, and value of hemp in the United States in 2024.”

As the nation’s hemp industry continues to mature, USDA is also making what it calls “improvements” to a federal hemp crop insurance program. The changes, which take effect next year, ease certain crop-rotation requirements and remove smoke damage as a cause of covered loss.

Separately, the department recently announced it is delaying enforcement of a rule requiring hemp growers to test their crops exclusively at labs registered with the Drug Enforcement Administration (DEA), citing “setbacks” at the agency that have led to “inadequate” access to such facilities.

This is the third year in a row that USDA has delayed enforcement of the lab testing policy for hemp required under the 2018 Farm Bill that federally legalized the crop.

In August, USDA also advised stakeholders of a policy change in China to impose tighter regulations on hemp-derived CBD, though it said the new rules were expected to benefit the industry.

Two years after hemp and its derivatives were federally legalized in the U.S. under the 2018 Farm Bill, China agreed to a trade deal that required it to buy significantly more of the non-intoxicating cannabis crop from U.S. sources. That agreement expired in 2022, however.

USDA also awarded $745,000 to the National Industrial Hemp Council (NIHC) to support efforts to promote the industry internationally in emerging markets across the world. In 2020, USDA awarded NIHC $200,000 as part of a different grant program.

The latest grant round was distributed during a precarious time for the hemp industry. While a USDA report found that the market started to rebound in 2023 after suffering significant losses the prior year, it’s still facing uncertainties as congressional lawmakers have advanced bills that would effectively ban most consumable hemp-based cannabinoid products—a major sector of the cannabis economy.

Senate Democrats released the long-awaited draft of 2024 Farm Bill last year that contained several proposed changes to federal hemp laws—including provisions to amend how the legal limit of THC is measured and reducing regulatory barriers for farmers who grow the crop for grain or fiber. But certain stakeholders had expressed concern that part of the intent of the legislation was to “eliminate a whole range of products” that are now sold in the market.

One key component of the legislation concerns the definition of hemp. As currently enacted, a crop is considered federally legal hemp if it contains no more than 0.3 percent delta-9 THC by dry weight. That would be revised under the new bill, making it so hemp would have to be tested for “total THC” content, including cannabinoids such as delta-8 THC and THC-A, and not just delta-9.

That could theoretically lead to a significant upheaval of the hemp industry as it has evolved since the crop was federally legalized under the 2018 Farm Bill, restricting not only the varieties of plants that could be cultivated but also the products that would be permitted in the marketplace. Lawmakers have been increasingly targeting intoxicating cannabinoid products that have proliferated in recent years.

USDA is also reportedly revoking hemp licenses for farmers who are simultaneously growing marijuana under state-approved programs, underscoring yet another policy conflict stemming from the ongoing federal prohibition of some forms of the cannabis plant.

For the time being, the hemp industry continues to face unique regulatory hurdles that stakeholders blame for the crop’s value plummeting in the short years since its legalization. Despite the economic conditions, however, a recent report found that the hemp market in 2022 was larger than all state marijuana markets, and it roughly equaled sales for craft beer nationally.

Meanwhile, internally at USDA, food safety workers are being encouraged to exercise caution and avoid cannabis products, including federally legal CBD, as the agency observes an “uptick” in positive THC tests amid “confusion” as more states enact legalization.

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