Senate Votes To Pass 2018 Farm Bill, Next Stop Is The House

This story was updated on December 11, 2018.

The 2018 Farm Bill has passed in the U.S. Senate with a vote of 87-13. The legislation goes to the House next for a vote and if it passes there, it will head to the President’s desk to be signed. Hemp will be switched for review to the Department of Agriculture and away from the Justice Department.

Language that would ban people with felony convictions from working in the hemp industry was amended so that the ban would end 10 years after this legislation is passed.

Hemp farmers and CBD-related companies will benefit the most from the passage of the Farm Bill. CBD or cannabidiol is derived from the cannabis plant but has none of the psychotropic effects of THC. In The Farm Bill, there is language that amends the Controlled Substances Act and legalizes CBD. The passage reads as follows:

‘(B) The term ‘marihuana’ does not include— 10 ‘‘(i) hemp, as defined in section 297A of the 11 Agricultural Marketing Act of 1946; or 12 ‘‘(ii) the’’. 13 (b) TETRAHYDROCANNABINOL.—Schedule I, as set 14 forth in section 202(c) of the Controlled Substances Act 15 (21 U.S.C. 812(c)), is amended in subsection (c)(17) by 16 inserting after ‘‘Tetrahydrocannabinols’’ the following: ‘‘, 17 except for tetrahydrocannabinols in hemp (as defined 18 under section 297A of the Agricultural Marketing Act of 19 1946)’’.

It is expected to be removed from the DEA’s schedule 1 list to schedule 5, which is the lowest level and would lift the DEA’s restrictions. CBD products have already begun to explode in the marketplace in anticipation of these changes.

“The cannabis industry is closely watching the outcome of the Farm Bill. And while we are seeing a lot of startups try to move in, nobody is better suited to operate in this market than experienced licensed cannabis manufacturers,” said Nancy Whiteman, founder, and CEO of Wana Brands, makers of cannabis-infused products.” Marijuana-infused producers have been perfecting precise dosing, testing, and supply chains for the past decade, and these companies will lead the way in the next generation of CBD products.”  Wana Brands has the leading THC gummy in Colorado, but it will be producing a CBD only version in 2019.

GW Pharmaceuticals (NASDAQ: GWPH) had its drug Epidiolex approved by the FDA earlier this year and removed from the schedule 1 category. This medicine though has a very high level of CBD, unlike the mass-market versions which have fairly low levels of CBD. Plus, patients know exactly what they are getting with the prescription drug. Consumers purchasing mass market CBD products generally have no idea how much CBD is in the product or how it was manufactured.

“What is known about CBD is only the tip of the iceberg,” said Lisa Richards, co-CEO, L’eela CBD Body Care:  Consumers are just starting to understand the benefits of CBD, and when the floodgates open, they are going to need to be educated and be their own advocates. Hemp may be federally legal with the passage of the Farm Bill. However, more importantly, where is it sourced? How is it processed? The passage of the Farm Bill is only the first chapter.” All L’eela products are made with hemp that is grown and processed in the United States.

Many companies use CBD oil that is made from Chinese hemp. In 2017, the FDA issued warning letters to several CBD companies. The products didn’t contain the level of CBD that they claimed or the companies made marketing claims about health conditions for which there was no scientific proof. With these new changes, the industry has a better chance of creating standards so that consumers can make educated choices.

The Farmers

In addition to boosting the product sales of CBD brands, the Farm Bill will benefit hemp farmers. Chase Terwilliger, CEO of CBDistillery, a Balanced Health Botanicals brand said that the biggest benefit to hemp farmers is that they will be able to buy crop insurance. Most farmers have this type of insurance to protect them from weather or anything else that could hurt a harvest. Hemp has only been approved from a research standpoint and so it wasn’t eligible for crop insurance.

There is a big desire to shift some of the Chinese production of hemp back to the United States. One reason Senator McConnell has been supporting the inclusion of hemp in the Farm Bill is that it gives tobacco farmers in Kentucky a way to keep their farms productive.

“Hemp is fairly inexpensive to grow and maintain,” he said. “But we hear from farmers that harvesting is a big challenge because the farm equipment isn’t designed to handle the product which is extremely fibrous.” Terwilliger also noted that hemp is a very absorbent plant and with China’s pollution, their hemp plants tend to have heavy metal exposure. “Consumers deserve a high-quality hemp plant,” he said.

Farmers have already begun carving out small sections of their farms to begin testing hemp. 100 acres was seen as a little risk. Now, it is expected that many farmers will quickly make the switch if the plant is legal.

Options

Terwilliger also noted that like traditional agriculture, there could soon be hemp futures. Farmers like futures contracts on their crops as it locks in a price. Options traders will buy and sell these instruments like any other agricultural product. “It will turn into a commodity that futures can trade on,” he said.

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


17 comments

  • Avatar
    Gail Martin

    December 10, 2018 at 11:57 am

    Monday is December 10th–NOT 9TH–proof read much?

    Reply

    • Debra Borchardt
      Debra Borchardt

      December 10, 2018 at 1:58 pm

      Hi Gail,
      I’m human. Thanks for the feedback and understanding.

      Reply

      • Avatar
        Jason McCollough

        December 10, 2018 at 4:12 pm

        What a prick….Any idea what type of deadline journalists are on?? Get a life.

        Reply

      • Avatar
        Kz

        December 11, 2018 at 3:10 pm

        <3

        Reply

    • Avatar
      Robert M.

      December 11, 2018 at 7:07 pm

      I’m sure she appreciated the correction. Nope, no need to “proofread” anything. The gist of what she meant is clear.
      Senate passed. House is next. I hope the president will sign.

      Reply

  • Avatar
    Tom L

    December 10, 2018 at 2:06 pm

    $CBDD IS THE HOTTEST CBD STOCK OF 2018/2019! CBD/HEMP LEGALIZATION WILL MAKE THIS STOCK EXPLODE UPWARDS!

    Reply

  • Avatar
    david

    December 10, 2018 at 2:30 pm

    obviuosly, not all cannibis companies apply here. what are some good companies to look at off this article

    Reply

  • Avatar
    Mike Pincher

    December 10, 2018 at 3:33 pm

    I heard earlier today (12/10/18) that the initial vote pn the Farming/Hemp bill initially scheduled for 12/10/18 has been put off for another month or so. Is this accurate, Debra? If so, do you have a more accurate date when it is planned to be up for reconsideration? Thanks for your help.

    Reply

  • Avatar
    Mike Pincher

    December 10, 2018 at 3:36 pm

    I heard earlier today on 12/10/18 that the vote on the Farming/Hemp bill has been delayed. If true, do you know for how long, Debra?

    Reply

    • Debra Borchardt
      Debra Borchardt

      December 10, 2018 at 4:43 pm

      I’m still hearing this week. I was told Monday and clearly, that didn’t happen.

      Reply

  • Avatar
    John

    December 10, 2018 at 9:16 pm

    CBD as a Schedule V will then require a prescription from a doctor correct? So one needs a prescription to eat gummies?

    Reply

  • Avatar
    John H

    December 11, 2018 at 2:40 am

    Conference Report deschedules hemp and cannabinoids. Why do you think CBD is rescheduled to V?

    Reply

    • Debra Borchardt
      Debra Borchardt

      December 11, 2018 at 8:12 am

      That is the interpretation of the language. CBD is cannabidiol

      Reply

  • Avatar
    john wick

    January 5, 2019 at 1:24 am

    CBD products are good for health Nice product! I love how soft it makes my skin feel and I haven’t been suffering with as many

    breakouts, i would recommend the CBDefine skin care to anyone else who also suffers. Cbd and hemp oil

    Reply

  • Avatar
    TruCure CBD

    January 8, 2019 at 10:32 am

    So many products originate in China, CBD should not. Us, and American’s stand to benefit a ton by the passage of the Farm Bill. American hemp and CBD companies should prominently label their products “all American” or ” American Hemp” seeing as there is a difference between the quality of hemp from these two countries.

    Reply

  • Avatar
    Formula Swiss CBD

    May 27, 2019 at 12:14 am

    It is so nice to see the industry growing so far.
    Good luck to everybody and hoping for a healthier world!

    Reply

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