Hemp Industry Celebrates as Farm Bill Passes

By: - December 13, 2018 12:00 am

U.S. Senate Majority Leader Mitch McConnell, Republican of Kentucky, examines pieces taken from a bale of hemp at a processing plant in Louisville, Kentucky, earlier this year. He led the effort in Congress to legalize the non-psychoactive cannabis, which is used to make everything from car parts to hand cream. Bruce Schreiner/The Associated Press

The U.S. cannabis industry entered a new era Wednesday as Congress approved a wide-ranging farm bill that will treat hemp like any other agricultural crop, rather than a quasi-controlled substance.

“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, a nonprofit that has advocated for hemp legalization, in a statement.

Hemp — a variety of cannabis that isn’t psychoactive — has been mired in legal confusion for years, thanks to its close relationship to marijuana, which the federal government considers a dangerous drug.

The 2018 Farm Bill fully legalizes hemp production, by defining “industrial hemp” as cannabis plants with a concentration of 0.3 percent or less of psychoactive compound tetrahydrocannabinol, or THC, overriding a conflicting definition in the Controlled Substances Act of 1970.

Hemp production has grown nationwide since the 2014 Farm Bill allowed farmers to grow hemp under tightly regulated state pilot programs. Some controls on hemp will remain under the new farm bill — states and the federal government still will have to ensure that farmers are licensed and aren’t growing marijuana — but the legislation will allow hemp researchers to apply for federal grants and hemp farmers to qualify for crop insurance.

And full legalization also is expected to dramatically expand hemp production. Over 25,000 acres of hemp were planted nationwide last year, according to Vote Hemp, with the most acres planted in Colorado, Oregon and Kentucky. Hemp can be used to make everything from car parts and rope to cereal and hand cream.

U.S. Senate Majority Leader Mitch McConnell, a Kentucky Republican and hemp champion, signed the final version of the bill with a pen made from Kentucky-grown hemp.

By 2022, hemp could be a .9 billion dollar market, according to the Hemp Business Journal, a publication that tracks the industry. One of the fastest-growing product categories is the cannabis extract cannabidiol, or CBD, which consumers ingest as a natural remedy for seizures, pain, anxiety and other ailments.

The wrangling over how to regulate a plant closely related to marijuana is far from over, however, and Congress’ embrace of hemp doesn’t necessarily create an easier path for federal marijuana legalization, some cannabis advocates say.

“Legalizing hemp is certainly a step forward for drug policy reform, but it’s not clear to me that this paves the way for marijuana legalization,” said Michael Collins, director of the Drug Policy Alliance’s Office of National Affairs, in an email. But other advocates say hemp legalization brings momentum for pot, including Paul Armentano, deputy director for the National Organization for the Reform of Marijuana Laws, or NORML.

“Passage of the 2018 farm bill will mark the first change in the federal classification of the cannabis plant since it was initially classified as a schedule I controlled substance by Congress in 1970,” he wrote in a recent op-ed. “As statewide and public support in favor of broader marijuana reforms continues to grow, it is apparent that this federal change won’t be the last.”

The farm bill, which typically is reauthorized every five years, funds farming and nutrition programs, agriculture research and related policy. The 2018 version would spend $867 billion over a decade, the Congressional Budget Office estimated.

The House and Senate wrangled over the legislation for months, caught up in arguments over whether to expand work requirements for food stamp recipients. In the end, work requirements that had been included in an earlier House version were dropped.

Advocates for farmers say the bill’s support for the industry are badly needed.

“Passage of the 2018 Farm Bill cannot come soon enough for American family farmers and ranchers, who need the certainty of the Farm Bill safety net to continue to weather the worst farm economy decline in more than thirty years,” said National Farmers Union President Roger Johnson in a statement Tuesday.

He said the compromise legislation “represents a critical step toward providing the relief and certainty farmers need amid struggling markets due to oversupply and trade volatility.”

The Senate voted 87-13 to pass the legislation and the House 369-47. President Donald Trump was expected to sign the bill.

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Sophie Quinton

Sophie Quinton writes about fiscal and economic policy for Stateline. Previously, she wrote for National Journal.