As Trump inks hemp legalization, new law portends major changes for cannabis industry

(This story has been updated to include new details about how the law could potentially affect the cannabis industry.)

President Donald Trump signed hemp legalization into law Thursday, a change that’s expected to unleash seismic market changes for the entire cannabis industry.

Trump’s signature on the 2018 Farm Bill takes hemp, defined as cannabis below 0.3% THC, out of the Controlled Substances Act.

The change also applies to extracts from hemp, including CBD.

The law takes effect immediately, meaning federal drug authorities must treat hemp like any other agricultural commodity, such as wheat or potatoes.

Hemp farmers  will face none of the business and regulatory obstacles that apply to higher-THC varieties, which are still defined as marijuana and remain a Schedule 1 drug.

Marijuana entrepreneurs, for their part, are cheering the change because:

  • It offers legal business opportunities for MJ companies that want to diversify into a new plant.
  • Also, the law could open a channel for MJ companies to access public markets and other financial tools unavailable to companies selling Schedule 1 drugs.

Take the case of Vertical, a cannabis producer and retailer based in Agoura Hills, California. The company has operations in four states and plans to spin off a separate hemp company, called Vertical Wellness, in hopes of listing on the Nasdaq.

Here’s what you need to know about the new law:

  • Cannabis plants above 0.3% still are defined as Schedule 1 drugs, though licensed hemp producers can’t be charged with a crime if their hemp exceeds the THC limit, making it marijuana.
  • But THC that comes from hemp is no longer a controlled substance.
  • The U.S. Department of Agriculture (USDA) must develop national hemp regulations “as expeditiously as practicable,” which is an uncertain time frame. The national plan must include procedures for checking hemp plants’ THC content and plans to destroy plants with too much THC.
  • The U.S. Food and Drug Administration (FDA) retains authority over foods, drugs and cosmetics. That means that while CBD becomes legal Jan. 1, it doesn’t mean it is legal to add hemp or CBD to food products or dietary supplements.
  • States, territories and Indian tribes have no deadline to submit hemp-regulation plans to the USDA. But once they submit a proposal, the USDA has 60 days to approve or reject it.
  • If a state’s hemp-oversight plan is rejected, growers there will be “subject to a plan established by the (USDA) to monitor and regulate that production.”
  • The USDA has one year to study the 42 hemp states’ progress with the plant and “determine the economic viability of the domestic production and sale of industrial hemp,” with the findings due to Congress.

The hemp industry has been pushing for legalization for decades, but the plant’s long association with high-THC varieties kept it locked alongside heroin and marijuana in Schedule 1, the most restricted drug classification in the United States.

The Farm Bill gives no direction for how law enforcement is supposed to tell whether THC came from legal hemp or from illegal marijuana.

Kristen Nichols can be reached at [email protected]

13 comments on “As Trump inks hemp legalization, new law portends major changes for cannabis industry
  1. Bob on

    Law enforcement should not be concerned with it, to begin with. Focus on real criminals and violent offenders. Stop these bogus rationalizations that you are protecting us and our kids; you’re not and the sad thing is you know this full well. Vote all prohibitionists out of office until full legalization at the federal level has been achieved.

    Reply
  2. Greg on

    This govt. should not be thanked for legalizing industrial hemp. Instead they should be chastised for buying into the outright lies presented by Harry Anslinger and W.R. Hearst back in 1937 which directly caused this innocent plant to be outlawed. A railroad job all the way with Hearst and Dupont driving the train. All to protect their respective business interests from competition. The shame continues today except big biz doesn’t need to lie—-they just pay congress to go along with their agendas

    Reply
    • Shane Wang on

      If you moan this much when a good thing happens you must come completely unglued when your panties get in a wod. In case your ignorant ass is unaware, this government wasn’t around in 1937. You are the kind of stupid that wants to chastise this government for legalizing hemp…. wait, you are that kind of stupid. Just shut your pie hole and focus on the fact that the cheetoh has done what no other president would do for the last 80 years, not leftist, or mentally competent.

      Reply
  3. PEGGY BAUSE on

    I agree with all the comments. Problem us I live in Indiana the most backwards state behind Illinois. Michigan and soon Ohio will be cashing in while they raise our taxes. Unbelievable

    Reply
  4. Lawrence Goodwin on

    Thanks for the update, Ms. Nichols and Marijuana Business Daily. Your websites are such precious resources, as cannabis liberation at last begins to unfold throughout our republic.

    I have no beef with the U.S. Dept. of Agriculture’s involvement with industrial hemp per se, yet any official actions that demonize delta-9 tetrahydrocannabinol (THC) seem way too aggressive. It says above: “The national plan must include procedures for checking hemp plants’ THC content and plans to destroy plants with too much THC.” That would be just another colossal waste of taxpayer dollars, aside from a completely senseless destruction of raw materials.

    All cannabis plants are created equal, including those with the miraculous compound THC. People must realize that cannabidiol (CBD) and THC are derived from the SAME source: the seedless, female flowers of cannabis plants. Moreover, we should never trust federal, state or local bureaucrats who claim authority to determine for us which plant compounds are “legal.” This new pro-CBD/anti-THC regime is nothing but more criminal government repression of commercial cannabis markets.

    The next step should be to immediately abolish the fraudulent word “marihuana” from all federal and state laws; transfer all regulatory authority to a renamed federal Bureau of Alcohol, Cannabis, Tobacco, Firearms and Explosives, and be done with it already.

    Reply
  5. Smoky the Animal on

    There is absolutely no reason to slash and burn Hemp plants, if they contain too much THC, as THC degrades naturally, in terms, freshness is best. Hemp can’t compete with Marijuana THC levels of 40% and up, when it’s only .3% and below mostly what Hemp produces, if at all. The seeds are, in large part, contributed to chicken feeds, the Hemp oils are sold as a folk remedy and the protein from seed meal is a vegetable protein low in harmful fats. The stalks are used as a fiber mass which is converted into cloth and thread, it naturally anti-bacterial and thermobaric it can be blended with other materials.

    Reply

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