The End of Industrial Hemp Prohibition: Almost There!

For the past few months, the U.S. Senate has made significant strides toward legalizing industrial hemp. That is welcome news to many of our clients, who are working with the plant under federally approved Agricultural Pilot Programs, while also dealing with almost absurdly complex issues surrounding the legality of cannabidiol (“CBD”) sales.

The legislative developments began in earnest earlier this year, when Senate Majority Leader Mitch McConnell (R-KY) introduced the short and sweet Hemp Farming Act of 2018 (the “Hemp Farming Act”), which aims to lift an 80-year old ban on hemp as an agricultural commodity. We analyzed that development here.

Then, on June 5th, the Senate adopted its third annual non-binding resolution that recognized “the growing economic potential of industrial hemp” and its “historical relevance,” further suggesting Congress’s intention to legalize the non-psychoactive cannabis cousin of marijuana. Around the same time, Senate Leader McConnell incorporated the Hemp Farming Act into the wide-ranging agriculture and food policy bill known as the 2018 Farm Bill to ensure a greater chance of success, and it worked. Last week, the Senate overwhelmingly approved the 2018 Farm Bill, including the Hemp Farming Act, by an unambiguous 86-11 vote.

As with the Strengthening the Tenth Amendment Through Entrusting State Act (the “STATES Act”), which we covered here and here, the Hemp Farming Act provides for the removal of industrial hemp from Schedule I of the Controlled Substance Act (“CSA”). This removal would explicitly legalize the cultivation, processing and sale of all hemp-derived products, including CBD. This means that if cannabis legislation continues to move forward in Congress—which seems highly probable given the fact that the Hemp Farming Act has passed the Senate and that the STATES Act has reached the House—Congress will likely reconcile these pieces of legislation and industrial hemp prohibition will end.

In addition to removing industrial hemp as a Schedule I drug of the CSA, the passage of the Hemp Farming Act into law would:

• Empower states and tribes to regulate the production of hemp without fear of federal intervention;
• Permit farmers to grow, process and sell hemp-derived products as an agricultural commodity, which in turn would create economic opportunities and stimulate economic growth in rural communities;
• Make hemp plants eligible for crop insurance;
• Ensure access to public water rights for hemp farmers;
• Enable hemp farmers to access the national banking system;
• Recognize that some hemp-derived products, such as CBD oils, have valid medical use;
• Make hemp-derived products eligible for federal trademark protection; and
• Advance research opportunities by enabling hemp researchers to apply for grants with the U.S. Department of Agriculture.

Although the passage of the Hemp Farming Act in the Senate is a promising step toward the legalization of industrial hemp, more hurdles must be overcome before the federal legality of hemp becomes the law of the land.  The Hemp Farming Act now must be merged with a competing version from the House, which does not provide for the legalization of industrial hemp, before it can reach President Trump’s desk for signature.

Whether the final version of the Hemp Farming Act will become law is purely speculative at this point; however, the fact that Senate Majority Leader McConnell (i.e., THE most powerful senator) is its most fervent supporter seems to suggest that the Hemp Farming Act is likely to survive and (hopefully) become law. We will definitely keep you posted.

In the meantime, for more on industrial hemp and CBD, check out the following: