With President Trump poised to sign the 2018 Farm Bill, it looks like the United States is finally taking action with respect to the production of industrial hemp for commercial purposes. The 2018 Farm Bill is certainly an impressive feat, as the legislation allows states and Indian tribes to establish a regulatory framework governing the production of hemp plants, subject to specific requirements outlined in the bill.

There are a few key provisions included in the legislation, including a requirement that each state and tribal department of agriculture must submit proposed plans for the regulation of hemp production to the federal Secretary of Agriculture for approval. Each state or tribal plan must include procedures for storing information on land used for hemp production, testing for THC concentration levels, plant and waste disposal, enforcement, annual inspections, and if applicable, other practices or procedures established by the respective state or Indian tribe.

The bill contains a provision outlining enforcement procedures for hemp producers found in violation of state law, but the potential penalties differ depending on whether the defendant’s actions occurred due to negligence or willful intent. Any producer who violates state or tribal law due to negligence (i.e. not intentionally or willfully) is not subject to criminal enforcement action by Federal, State, Tribal or local government (you read that right). Unfortunately, any defendant found to have knowingly or intentionally violated the law must be reported to the federal Attorney General as well as the chief law enforcement officer of the state or tribe. The bill also prohibits anyone convicted of a felony relating to controlled substances from participating in state hemp production programs and/or producing hemp for the next ten years.

I believe the most interesting aspect of the 2018 Farm Bill relates to the production of hemp-derived products with labels claiming non-FDA approved medical benefits, particularly with respect to cannabidiol (“CBD”) products. Over the past several years, the Food and Drug Administration (“FDA”) has issued warning letters to several CBD product manufacturers for violations under the Food, Drug, and Cosmetic Act (“FDCA”). The FDA issued warning letters to companies using health claims to market and advertise CBD products, companies selling products without including adequate instructions for use of the product (i.e. misbranded products), as well as companies marketing CBD products as dietary supplements. The FDA also warned companies selling products that laboratory testing showed to contain little or no CBD, despite manufacturers’ use of product labels and advertising claims that claimed quite the opposite. The FDA has also noted that CBD products are not “dietary supplements” as defined by the FDCA because CBD has been authorized for investigation as a new drug product and/or is an active ingredient in a drug product approved by the FDA.

While the 2018 Farm Bill legislation grants regulatory authority to the U.S. Department of Agriculture (“USDA”) with respect to hemp production, this does not preclude FDA officials from regulating and/or prohibiting the sale of CBD products in interstate commerce. The FDCA also contains several provisions related to the use of health claims to market and advertise products, as well as labeling requirements, and a blanket prohibition on the use of statements suggesting a product is approved for the diagnosis, treatment, cure, mitigation, or prevention of any disease in the absence of FDA approval.

The key takeaway? Media reports of a multi-million dollar hemp-derived CBD market fail to consider the more nuanced interplay of federal laws governing the marketing and sale of food, drug, and dietary supplement products, as the Farm Bill specifically notes that the legislation does not modify any part of the FDCA. While the 2018 Farm Bill is certainly a significant step forward in terms of ending federal cannabis prohibition, there are still many obstacles for hemp manufacturers as a result of the interplay between federal law. Regardless of these remaining obstacles, I am hopeful that FDA and USDA officials can work together to ensure the 2018 Farm Bill ultimately achieves it’s intended purpose: Establishing a commercial hemp industry in the United States and providing a more economical alternative to manufacturing products using the mature stalks and sterilized seeds of imported industrial hemp plants grown abroad.

If you have any questions about the Farm Bill legislation, please feel free to reach me by email (emily@legallyburns.com) or phone (410-910-9699).