The 2018 United States Farm Bill and its Implications on the CBD Industry

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farm bill cbd industry

Just a few days before the end of the year, U.S. President Donald Trump signed into law the Agriculture Improvement Act, best known as the “2018 Farm Bill”. This new piece of legislation is set to allow American farmers to plant and harvest hemp plants without restrictions, making hemp and hemp-derived CBD products federally legal across all 50 states.

While a 2014 provision was the first to distinguish between industrial hemp and marijuana, allowing universities and agricultural programs to grow and study hemp in controlled environments, several states have passed less strict regulations that have allowed CBD companies to enter the market even while their activities remained illegal under federal law.

The 2018 Farm Bill is set to eliminate the conflict between federal and state law, opening the door to a multi-million-dollar market in the United States. According to Forbes, it is expected that the CBD market will grow up to 4000% of its current size by 2022. With more scientific studies backing the effectiveness of this hemp derivate, the growth of online sales channels and this new legislation, the future seems more brilliant than ever before for hemp farmers and CBD manufacturers across the U.S.

CBD vs Marijuana

The legal difference between marijuana and hemp is that, while both are derivates from the cannabis plant, the latter contains less than 0.3 percent of Tetrahydrocannabinol. This component, best known as THC, is responsible for the psychoactive effects of cannabis. Hemp, therefore, does not cause the “high” sensation commonly associated with marijuana but has nonetheless being caught in the wide federal prohibition of the plant.

In 2005, Raul Grijalva, Jim Dermott and other members of the United States House of Representatives submitted the Industrial Hemp Farming Act of 2005 with the objective of excluding industrial hemp from the federal definition of marijuana. While the bill was rejected at the time, it was re-introduced under the Agricultural Act of 2014 and can be considered the basis of the most recent legislation.

What Changes with the 2018 United States Farm Bill?

While some have defined the bill as the final step towards the legalization of hemp, it is important to keep in mind that several restrictions are still in place. From January 1, 2019, prospective growers must submit a request to the United States Department of Agriculture stating their cultivation plans and guaranteeing that their crops do not contain more than 0.3% THC.

On the positive side, hemp growers registered in the USDA will be eligible to receive insurance coverage under the Federal Crop Insurance Act. Cited by the Boston Globe, NORML Deputy Director Paul Armentano defined the 2018 United States Farm Bill as the first change in the federal definition of cannabis since World War II.

Boosting a Booming Industry

While the recently passed Farm Bill is a huge step for hemp to be legal at a federal level, it is no secret that CBD is already a big business in many states of the U.S. In California, companies such as Eaze are already shipping hemp-derived CBD products to more than 40 states. According to the Brightfield Group, the CBD industry in the United States is worth $591 million in 2018. Keeping in mind that hemp was being grown in a gray area between state and federal laws, this number is expected to grow substantially with the introduction of the 2018 Farm Bill.

Everything considered, 2019 seems to be a bright year for the CBD industry. Not only is federal legislation responsible for this, but it also increased social awareness on the properties of cannabidiol. More people around the world and in the United States are starting to realize the potential of hemp and the differences between CBD and marijuana. While long overdue, the passing of the 2018 Farm Bill is a step in the right direction which will not only allow the legal growth of industrial hemp but also add to the ongoing awareness of it by the American society.


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