Unpacking the 2018 Farm Bill: What Does It Mean for CBD?

Hemp field with mountains in background

Business Insider and other authoritative publications have predicted that the passage of the 2018 Farm Bill will lead to an unprecedented boom in the CBD industry. What, exactly, does this legislation change about CBD’s legal status, and what obstacles still threaten the CBD industry’s evolution? In this guide, we’ll explain exactly what the Farm Bill means for CBD and why consumers and market speculators alike are thrilled by these recent legal changes.

The Context: History of CBD Law in the USA

Before we jump into the details of the Agriculture Improvement Act of 2018 (H.R.2 or the “2018 Farm Bill), it’s important to cover the ground that led to this momentous legislative change. It turns out that the story of CBD’s rapid rise from an illegal substance to a state-sanctioned consumer product isn’t a tale of easy acknowledgment but of hard-fought vindication.

Cannabis Prohibition

For the vast majority of human history, Cannabis sativa has been seen as a highly valuable fiber crop, and its utility as a medicine was secondary. This plant’s psychoactive qualities were widely ignored for recreational purposes, but that all changed toward the midpoint of the 20th century.

To this day, nobody quite knows why cannabis prohibition came into effect. Conspiracy theorists whisper that it was the lumber industry’s doing, and it’s even possible that federal authorities were genuinely concerned about the apparent health menace of marijuana popularized by films like Reefer Madness. Whatever the case may be, public opinion soured against all applications of Cannabis sativa, whether they were industrial, medical, or recreational, for more than 50 years.

Dr. Bronner's soap bottles
Dr. Bronner has a lot to say

Dr. Bronner’s Crusade

Have you ever stared, mesmerized, at the endless stream of quasi-religious gibberish that covers every square inch of a Dr. Bronner’s soap label? Well, it turns out that the “Soap Doctor” isn’t just known for the “ABCs of Mama Cat” and other mind-numbing sermons. In the early 2000s, this unlikely hero briefly became the savior of the national hemp movement.

In pursuance of its self-appointed mandate to wipe hemp from the face of the Earth, the U.S. Drug Enforcement Agency (DEA) imposed a rule in 2004 that made it illegal to sell any products that contained hemp seed oil in the United States. The soaps that served both as products and billboards for Dr. Bronner’s contained hemp seed oil, so they were jeopardized by this legal change.

With the help of various other hemp manufacturers, Dr. Bronner’s mounted an appeal against the DEA and won. While the grandson of the original Dr. Bronner was later arrested in front of the White House in 2012 for protesting restrictive hemp laws, it was efforts by companies like Dr. Bronner’s that pushed hemp legislation toward its current enlightened state.

The 2014 Farm Bill

Even though the heroic sacrifice of Dr. Bronner’s grandson will never be forgotten, his suffrage for the cause would prove to be short-lived. Less than two years after his arrest, David Bronner would see hemp legislation passed that would open the door for the CBD industry and mark the beginning of the cannabidiol boom.

The Agricultural Act of 2014 (2014 Farm Bill or H.R.2642), would, for the first time, authorize an industrial hemp research program that made cannabis plants and extracts containing less than 0.3 percent THC legally separate from cannabis.

Reading through the text of the bill, it’s pretty clear that this legislation was only intended to allow certain state-sanctioned farmers to grow hemp for research purposes. However, legal loopholes built into this legislation made any hemp extracts containing less than 0.3 percent THC legal for general market sale in the United States. Since these extracts were no longer considered to be marijuana, there ceased to be any legal impediments to stop companies across the United States from offering CBD-rich full-spectrum hemp oil on the general market.

Almost immediately, CBD companies started springing up left and right. Some of these businesses had previously catered to medical marijuana patients, but others were founded by savvy entrepreneurs who could see the direction the hemp industry was headed. Despite the DEA and U.S. Food and Drug Administration (FDA)’s timid remonstrations, aspiring CBD companies across the country saw this legislation as a green light to go ahead and start marketing products.

Industry Unease

Even though CBD products became technically legal after the passage of the 2014 Farm Bill, CBD’s legal status remained very much up in the air. For those of us who were active in the industry between 2014 and 2018, we’ll remember the anxiety of waking up every day expecting that a new rule from a federal agency outright banning CBD would suddenly drop on our heads for the rest of our lives.

Thankfully, no such ban occurred. That’s not to say there weren’t some scary moments; for instance, when the DEA released a new “final rule” in 2017 declaring that all CBD products containing other cannabinoids were considered marijuana, many industry speculators were absolutely certain that the story of CBD was finally over. In the end, however, this final rule only revealed the ignorance of the DEA; even though isolate CBD was widely available as early as 2016, this federal agency remained convinced that it was impossible to produce CBD that didn’t contain other cannabinoids.

Over the following year, rumors started emerging that the federal government was just about ready to cave on the CBD phenomenon. The industry had already grown to monumental proportions, and despite the FDA-approved release of Epidiolex, a pharmaceutical form of isolate CBD, consumers remained dead-set on purchasing CBD from general market retailers regardless of legal uncertainties.

In 2018, CBD users and producers alike breathed a sigh of relief as President Trump put pen to paper and signed the 2018 Farm Bill into law. Even at that point, however, we had no idea just how drastically the industry was about to change.

Hemp leaf against blue sky with clouds
The bill that changed everything

The Agriculture Improvement Act of 2018: Hemp Freedom

The story of hemp reform is full of unlikely heroes. In the latest chapter of this ongoing saga, none other than Senate Majority Leader Mitch McConnell emerged as the champion of hemp legalization that the CBD industry desperately needed.

It was McConnell who practically singlehandedly championed the hemp-related section of the 2018 Farm Bill. The senator’s home state of Kentucky is a potential hemp-growing paradise, which might have been a significant source of inspiration. Whatever the case may be, McConnell’s influence has essentially legalized CBD for general market sale in the United States, albeit with some restrictions.

As originally stipulated in the 2014 Farm Bill, the Agriculture Improvement Act of 2018 maintains the position that CBD is only legal as long as it contains 0.3% THC or less. Importantly, however, it officially removes all hemp products, including CBD products containing less than 0.3% THC, from the federal government’s definition of marijuana. This legislative change means that the DEA no longer considers CBD oil to be a Schedule I illegal drug.

With the passage of this new law, the last remaining Sword of Damocles hanging over the head of the CBD industry has been removed. While there’s been no history of DEA raids on CBD manufacturers or sellers, CBD’s technically-illegal status had artificially suppressed the growth trajectory of the cannabidiol industry for far too long.

CBD and the 2018 Farm Bill: Sorting Through the Complexities

Here’s where things get tricky, however. While the 2018 Farm Bill made CBD legal for all intents and purposes, there’s still some complicated legal verbiage to get through before we can fully answer the question of, “What does the 2018 Farm Bill mean for CBD?”

Essentially, the most important part of this legislation is its removal of hemp products from the government’s definition of marijuana. CBD-rich hemp oil containing less than 0.3% THC is considered to be a hemp product, so it is now legal. However, CBD itself is still considered to be a Schedule I substance.

Huh?

Let me explain. The FDA has only authorized CBD for use in GW Pharmaceuticals’ Epidiolex. All other forms of CBD are still considered to be part of marijuana, which is a controlled substance.

Here’s where the legislative confusion sets in: The 2018 Farm Bill makes all hemp products legal, and CBD oil with 0.3% THC or less is a hemp product. However, CBD itself is still a part of marijuana, which means that CBD is only legal as long as it is produced in line with the stipulations of the 2018 Farm Bill.

While worth noting, this minor gray area will have zero impact on the evolution of the CBD industry. The federal government’s intent is clear: CBD is to be legalized and allowed to proliferate under certain basic restrictions. It’s only a matter of time until these technicalities are cleaned up; what matters are the huge leaps the industry has taken that nobody ever expected.

The 2018 Farm Bill and CBD: The Bottom Line

There seems to be an unspoken rule that the U.S. federal government isn’t allowed to do anything efficiently or with total clarity. We in the hemp industry have simply come to expect legal complications in the continuing fight to offer CBD to people in need. What’s striking about the new era of CBD that’s just dawned, however, is just how uncomplicated this cannabinoid’s legal status has finally become.

Never before has CBD been so clearly legal for sale in the United States. There’s no way around it; the federal government simply had to bow down before the economic potential of hemp production, and it might even be possible that the endless slew of CBD success stories inundating the internet actually managed to warm the cockles of a few jaded D.C. politicians’ hearts. We may never know the full story of how the 2018 Farm Bill came into being but, like it or not, we have Mitch McConnell and President Trump to thank for ushering in the new era of cannabidiol commerce in the United States.

FDA Commissioner Scott Gottlieb with microphone
2018: There’s a new sheriff in town

Gottlieb on Patrol

The passage of the 2018 Farm Bill isn’t the most recent landmark in the story of the evolving legal status of CBD. A lot has happened since December of 2018, and outgoing FDA Commissioner Scott Gottlieb was one of the first to make headlines directly following this momentous bill’s passage.

On the day the Farm Bill became law, Commissioner Gottlieb released a statement clarifying that the FDA’s stance on CBD hadn’t changed. Here are the details straight from the horse’s mouth:

“We’re aware of the growing public interest in cannabis and cannabis-derived products, including cannabidiol (CBD). This increasing public interest in these products makes it even more important with the passage of this law for the FDA to clarify its regulatory authority over these products. In short, we treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of the source of the substance, including whether the substance is derived from a plant that is classified as hemp under the Agriculture Improvement Act.”

With this statement, Gottlieb essentially warns CBD manufacturers not to get too carried away; like most other kinds of food and supplements in the United States, CBD is still under the purview of the FDA. As long as the agency Gottlieb is leaving imposes reasonable regulations on CBD, there shouldn’t be any problems, and all signs are positive that the relationship between the FDA and the CBD industry will remain cordial (if not truly heartfelt) in the years to come.

The Public Hearing

In April of 2019, Commissioner Gottlieb released another statement regarding CBD. This statement echoed many of the sentiments that Gottlieb had made known in his December statement, but it went on to articulate some of the actions that the FDA planned to make to better handle the emergence of fully-legal CBD.

As one of the actions his agency plans to take regarding CBD, Gottlieb signaled his intent to form “a high-level internal agency working group to explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed; including a consideration of what statutory or regulatory changes might be needed and what the impact of such marketing would be on the public health.”

Even though the federal government appeared to capitulate to the general market CBD industry with the passage of the 2018 Farm Bill, Gottlieb expresses with this statement that the FDA will remain intimately involved in determining which CBD products will be available to American consumers. There are multiple ways to read this statement, and it’s still too soon to come to conclusions.

Either Gottlieb is expressing that he wants to create legal pathways for existing CBD-enriched supplements and foods to become FDA-approved, or he is expressing that he wants to replace existing CBD products with FDA-approved alternatives. Given the incredible difficulty of attempting to reign in or even eliminate an industry that will be worth $20 billion per year by 2024, it seems much more likely that the FDA intends to help existing players within the CBD industry achieve FDA-approved status.

Results of the Hearing

Gottlieb’s April 2nd statement also broadcasted the FDA’s intent to hold a public hearing on CBD on May 31st, 2019. During this hearing, the FDA heard from over 100 industry stakeholders over the course of more than 10 hours, and by its end, the FDA’s position on CBD wasn’t any clearer than it was before.

This federal agency certainly doesn’t want to stand in the way of the tax revenue the CBD industry stands to generate, but statements from Acting FDA Commissioner Ned Sharpless such as, “There are important reasons to generally prohibit putting drugs in the food supply,” have caused some consumers and producers to worry about the future of CBD drinks and edibles.

One thing was made clear by this public hearing: The FDA wants to take its time developing comprehensive CBD regulations. This might be time, however, that the FDA does not have. As part of the testimony of Megan Olsen, a lawyer for the Council for Responsible Nutrition, reminded us, the FDA “must act quickly to address the market that is out of control.”

Hardline action by the FDA would be met by immense pushback and the flourishing of black-market CBD. The FDA simply does not have the resources to forcibly shut down every CBD company in the United States. On the other hand, continued passivity on the part of the FDA will encourage the increased proliferation of sub-par or even dangerous CBD products. This agency is caught between a rock and a hard place, and it’s unclear how Acting Commissioner Sharpless or his permanent replacement will choose to thread the needle of the general market CBD paradox.

Stack of $100 bills
The CBD industry is set to explode

CBD: The Coming Boom

What’s the main takeaway from the Farm Bill, Gottlieb’s statements, and the recent FDA hearing? General market CBD is far more legal than it ever has been before. Even the TSA is now allowing CBD products on planes, and mainstream drug stores like CVS have started selling CBD.

Rather than being spooked by the FDA’s wishy-washiness in its perspective toward CBD, the fact that the FDA has to consider how to regulate CBD at all has driven the cannabidiol industry into a frenzy. The necessity of a serious conversation about how to regulate and approve CBD products means that cannabidiol has finally been rescued from the hinterlands of the legal gray area it was forced to abide in for far too many years.

While it’s too soon to say exactly how the shape of the CBD industry will change in the near future, things are looking up. CBD is well on its way to becoming mainstream, and we have the 2018 Farm Bill to thank.

CBGenius logo

The CBGenius Factor

Over the next few years, the major focus of the FDA and other federal agencies involved in the CBD industry will be to root out bad actors and ensure product quality within the CBD industry. During May’s public FDA hearing, various stakeholders presented CBD products that had been exposed by independent lab testing as containing far less than their advertised CBD concentrations.

Due to lack of oversight and regulation, there’s no way for consumers to have confidence that their CBD was produced in hygienic settings using cutting-edge equipment and methods. You’d be surprised to hear the names of some of the companies that have been caught selling fake goods; all these producers will be uprooted in the coming years as systemic corruption and greed in the CBD industry is eliminated in favor of a more regulated and rewarding system.

While the 2018 Farm Bill and its ensuing regulatory push might be cause for panic for some CBD producers, we have nothing to fear here at CBGenius. After all, the founder of our company is the head of one of the biggest cannabis testing labs in the United States, and there’s no way that Dr. Marchitto would ever let the CBGenius team produce anything but the safest and most effective CBD products on the planet.

Going mainstream is always accompanied by hurdles, but at CBGenius, we don’t mind change. It’s easy to see that the CBD industry is moving in a positive direction, and there’s plenty of room for everyone to benefit as long as they play by the rules. As CBD legislation continues to evolve, we hope you’ll count on us as your premier source of both CBD news and the best CBD tinctures, lotions, bath bombs, and other cannabidiol products on the market.

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