Farm bill Archives - Green Market Report

Debra BorchardtDebra BorchardtDecember 24, 2018

5min37650
President Trump signed the 2018 Farm Bill last week that included provisions that eliminate several federal barriers to the cultivation, production, and commercial development of hemp and hemp products. It also eliminated hemp from Schedule I of the Controlled Substances Act. “Hemp” is now defined as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.”
The Food and Drug Administration (FDA) issued a statement by Commissioner Dr. Scott Gottlieb on the agency’s regulation of products containing “cannabis and cannabis-derived compounds,” in which the Commissioner acknowledged there are “pathways” for FDA to consider “circumstances in which certain cannabis-derived compounds might be permitted in a food or dietary supplement.”
Many people immediately assumed that with the signing of the bill, hemp-derived CBD and products made with hemp-CBD would be legal. The FDA has the authority to regulate products containing cannabis or cannabis-derived compounds, and declared that such ingredients – clearly including hemp and hemp derivatives, such as cannabidiol (CBD) – are treated “as we do any other FDA-regulated products.”
Gottlieb restated FDA’s concerns over “drug claims being made about products not approved by the FDA that claim to contain CBD or other cannabis-derived compounds,” as well as the agency’s position that under the Food, Drug, and Cosmetic Act (FD&C Act) it is “unlawful … to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.”
Dr. Gottlieb also emphasized that FDA “has authority to issue a regulation” that would allow these naturally-occurring hemp compounds in a food or dietary supplement. He also stated that FDA is now evaluating whether to pursue such a process and clarified that the agency “would only consider doing so” if it determines “that all other requirements in the FD&C Act are met, including those required for food additives or new dietary ingredients.”
“The food and supplement industry should read Dr. Gottlieb’s statement first and foremost as an indication that FDA shares our desire for hemp and CBD products to be properly regulated under federal law, and now recognizes its statutory authority to address the agency’s view of the prior-drug status of some Cannabis compounds through rulemaking,” noted American Herbal Products Association (AHPA) PresidentMichael McGuffin. “The relevance of this authority was first seen by AHPA’s Cannabis Committee over two years ago, and AHPA identified this publicly in May of this year as an approach that FDA should be encouraged to consider.”
“At the same time, the Commissioner’s emphasis on the legal requirements that must be met for food additives or new dietary ingredients (NDIs) is a clear signal of FDA’s thinking, and we should not be surprised if any forthcoming FDA action focuses on compliance with the law’s provisions for NDI notifications for supplement ingredients, and for hemp ingredients used in foods to meet the provisions to establish these as generally recognized as safe (GRAS) under the law,” added McGuffin.
Commissioner Gottlieb’s statement also announced that FDA intends to convene a public meeting in the near future to discuss products that contain hemp-derived ingredients, including food and supplement products.
“AHPA has been engaged in issues related to the safe use and responsible commerce of lawfully marketed products derived from Cannabis since 2010 and we will continue to actively participate in any and all relevant FDA meetings and rulemaking activities,” noted Jane Wilson, AHPA’s Director of Program Development and liaison to the AHPA Cannabis Committee.

Debra BorchardtDebra BorchardtDecember 20, 2018
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5min27320

The 2018 Farm Bill, passed by Congress on December 12, 2018, and signed into law by the President on December 20, 2018, includes Section 10113 titled “Hemp Production,” which removes hemp from the Controlled Substances Act, places full federal regulatory authority of hemp with USDA, and allows State departments of agriculture to file hemp programs plans and regulate hemp cultivation per their State-specific programs.

“This bill constitutes a momentous victory for the movement in support of hemp farming, and will have far-reaching positive impacts on rural economies and farming communities, increase availability of sustainable products for American consumers, and create new businesses and jobs in the hemp industry,” said Eric Steenstra, President of Vote Hemp. “Now that we have lifted federal prohibition on hemp farming, it’s time to invest our energy in expanding hemp cultivation and the market for hemp products across the country so that all can reap the benefits of this of this versatile, historic American crop.”

Vote Hemp went on to say that in addition to defining hemp as cannabis that contains no more than 0.3% THC by dry weight, the bill asserts a ‘whole plant’ definition of hemp, including plant extracts; and removes roadblocks to the rapidly growing hemp industry in the U.S., notably by authorizing and encouraging access to federal research funding for hemp, and removing restrictions on banking, water rights, and other regulatory roadblocks the hemp industry currently faces. The bill also explicitly authorizes crop insurance for hemp. The full text of the hemp provisions in the Farm Bill of 2018 may be found at:  https://www.votehemp.com/2018farmbill.

Section 10113 “Hemp Production,” expands federally legal commercial hemp cultivation to tribal lands, reservations and U.S. territories—lands that had previously been omitted in Sec. 7606 of the 2014 Farm Bill, which allowed only for hemp farming programs in ‘States.’

“For too long, the outrageous and outdated ban on growing hemp has hamstrung farmers in Oregon and across the country,” Senator Ron Wyden said. “Hemp products are made in America, sold in America, and consumed in America. Now, hemp will be able to be legally grown in America, to the economic benefit of consumers and farmers in Oregon and nationwide.”

David Bronner, Cosmic Engagement Officer (CEO) of Dr. Bronner’s, soaps in North America that use hemp seed oil in its products said, “Dr. Bronner’s has advocated for the legalization of hemp farming since we added hemp seed oil to our products in 1999, and fought and beat the DEA during the Hemp Food Rules Challenge from 2001 to 2004. As a maker of hemp products, we are eager to source the 20 tons of hemp seed oil we use annually from American farmers.

“We see passage of this Farm Bill as a critical step in the development of the hemp industry. Now American farmers will have the opportunity to participate in a high value crop with a growing market opportunity, and consumers will have better access to hemp-based products,” said Dixie Brands CEO Chuck Smith. “It will also dramatically improve supply chain access for companies such as Dixie Brands, which has already developed a diversified and revenue-producing portfolio of CBD-based products under our Therabis and Aceso brands. As such, we applaud this development as a win for multiple groups and look forward to further advancing Dixie’s growth initiatives in this now legalized space.”


Debra BorchardtDebra BorchardtDecember 12, 2018
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8min1382318

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.



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