The 2018 Farm Improvement Act (Farm Bill 2018) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (CSA) and creating a detailed framework for hemp cultivation. The 2018 Farm Bill gives the U.S. Department of Agriculture (USDA) the federal hemp regulator. In return, states have the option of maintaining the primary regulator for crops grown within their borders by submitting a plan to the USDA.
This interplay between the federal government and the federal states has led to numerous changes to laws and regulations at the state level. In fact, most states have introduced (and passed) bills that would approve the commercial production of hemp within their limits. A smaller but growing number of states also regulate the sale of hemp products. Our lawyers track these developments in real time for multiple clients and provide a matrix of 50 states showing how states regulate hemp and hemp products.
Last year, we wrote about guidelines for hemp and hemp-derived cannabidiol (hemp CBD) in all 50 states, Guam, Puerto Rico, the U.S. Virgin Islands, and tribal land. You can find links to each of these posts below. Obviously nothing is happening in a vacuum, so some of our posts are currently out of date. These things are changing quickly.
Now that we've covered over 50 jurisdictions, we'd like to end this series with some of the things we've learned in this series.
The states are (mostly) consistent when it comes to producing hemp
Both the Farm Bill 2014 and the Farm Bill 2018 focused on the actual cultivation of hemp, not on the processing or handling of hemp. As a result, there is not much room for difference between states when it comes to the rules and regulations for hemp growing. This also applies to testing hemp.
According to the 2018 Farm Bill, states must develop plans in accordance with the law itself and the USDA's provisional hemp rules. However, a number of states have decided to reject the 2018 Farm Bill and are sticking to the programs developed under the 2014 Farm Bill. The 2014 Farm Bill's hemp regulations expire on October 31, 2020, which means that several states will no longer have the regulator for hemp production. For more information, see the letter the North Carolina Department of Agriculture sent to the USDA.
The states differ with regard to the processing / handling rules
There is some agreement in how states regulate hemp cultivation. The same does not apply to "secondary" activities such as processing or handling hemp. Keep in mind that the Farm Bills 2018 and 2014 focus on growing hemp and will not transform this raw hemp into raw materials like fiber, hemp concrete or oil. Some states, such as Oregon, grant licenses or permits for these activities. Others, like Washington, don't.
In countries that do not issue processing or processing permits, these activities involve a certain degree of risk. This is because hemp is not a controlled substance (like very close cousin marijuana), but it is heavily regulated. Possession of commercial quantities of hemp without any license can attract unwanted attention. Hemp looks and finally smells of marijuana. A government-issued license can be useful.
On the other hand, there are many hemp processors in states that do not issue processor or handler licenses that are doing well without permission. It's not that hemp processing is necessarily illegal in these countries. One thing applies to processors in all states: keeping records is key! They want strong and substantial evidence when Johnny Law starts asking about this funky-smelling crop.
There are different approaches to regulating finished products, including hemp CBD
Once hemp has been harvested and processed into a finished product, it's time to go on the market. For industrial products like hemp textiles and hemp concrete, this is pretty easy. This is because these products are not absorbed by the human body. Anything that contains hemp that is ingested, smoked, or put on the skin has a more complicated path to market maturity because there is no real federal oversight of these products and there is no single government model for regulating them.
The FDA regulates consumer products. Hemp seed ingredients have been found to be generally safe for use in food, and approved Epidiolex, a CBD isolate used to treat epilepsy. The FDA has also consistently said that other hemp derivatives and hemp CBD cannot be sold as medicines, foods, or supplements. At the same time, enforcement by the FDA was very limited and consisted mainly of sending warning letters to hemp CBD traders that provide medical or health claims about their products. This resistant tolerance of hemp CBD at the federal level has left it up to the states to decide how hemp CBD should be treated.
The states have not adopted a uniform approach to regulating the hemp CBD. Some states agree with the FDA's position and ban hemp CBD in food and supplements. California is the best known example of this mindset. Several other states have gone in the opposite direction and have strictly regulated the manufacture and sale of hemp CBD. Utah and Texas are good examples of this model, since both states have manufacturing and labeling requirements. Some states even require retail stores to be licensed to sell hemp CBD products.
Another complicating factor is the treatment of smokable hemp or hemp CBD-E liquid (i.e. the liquid used in steam products). This is a hot button problem in many states. When it comes to smokable hemp, many politicians and law enforcement agencies are concerned that hemp is so close to marijuana. Some states, such as Kentucky, ban the manufacture of hemp products that resemble traditional tobacco products, such as cigarettes. Most states do not explicitly address the legality of smokable hemp, which makes the sale of smokable hemp risky due to a lack of clarity. Very few states specifically allow the sale of smokable hemp.
Hemp CBD e-liquid is also complicated because of the dangers associated with steam products in general. This area of law is still evolving, and very few states are specifically concerned with the topic of hemp CBD e-liquid. This is because the focus was so heavily on tobacco vapor products or marijuana vapor products. Washington is one of the few states to address this problem by banning the sale of cannabinoid-containing e-liquid unless it is sold on the state's regulated marijuana market.
Pack up and look ahead
This is the last edition of our "Hemp CBD Across State Borders" series, but it will certainly not be the last time we write about Hemp CBD. Hemp is here to stay, as is CBD (along with CBG, CBN and other "new cannabinoids"). Ultimately, the FDA will give some guidance to the industry, and we believe the agency will base its policies on countries that already have strict regulations. As soon as this happens, we expect state laws and guidelines to become more uniform, which will facilitate international traffic.
We hope you found this series to be informative and helpful. Thank you for reading and sharing these articles over the past year on behalf of the law Law Blog!
For information on previous reporting in this series, see the following links: