The prohibition of hemp is over. The regulatory regimes governing hemp and its extracts, including cannabidiol (“CBD”), have moved dramatically in the direction of legalization and alternative regulatory schemes based on agricultural products, dietary supplements and pharmaceutical products.
Beginning in 2014, the cultivation of “industrial hemp” was permitted in states adopting a pilot program under the Agricultural Improvement Act of 2014. This enabled subsequent state-level experimentation in the cultivation of low-THC cannabis plants and the development of products derived from these plants. Under the 2014 Farm Bill, any cannabis plants with a delta-9 tetrahydrocannabinol (“THC”) level of 0.3% or lower were classified as “industrial hemp.” THC is the substance in cannabis that produces a “high.” Because industrial hemp has a low level of THC, it is considered non-intoxicating. While the Farm Bill did not explicitly remove industrial hemp from the federal Controlled Substances Act, amendments and riders to subsequent federal appropriations bills consistently prevented use of federal funds to interfere with the cultivation and sale of industrial hemp under the 2014 Farm Bill.
This initial regulatory structure allowed the industrial hemp industry to grow dramatically. Between 2014 and 2018, approximately 38 states adopted pilot programs and cultivation grew to over 78,000 acres in 2017. Despite the ambiguous legal classification of industrial hemp as a controlled substance (i.e., marijuana), commercial markets for hemp products, primarily CBD extracts, grew significantly.
In December of 2018, Congress passed the Agricultural Improvement Act of 2018 and formally removed hemp and its extracts from the federal Controlled Substances Act and shifted regulation from the Drug Enforcement Agency to the United States Department of Agriculture (“USDA”). However, marijuana that has THC in it is still a controlled substance and is federally illegal to move across state lines. In addition, without a state license, it is illegal to cultivate and distribute within a state.
Hemp on the other hand is legal to cultivate and distribute across state lines and is not federally illegal as long as the legal definition of hemp is adhered to.