The Agriculture Improvement Act of 2018 (Farm Bill) has become law after the signing of the bill by the President this week. This bill will have a big impact on hemp production as well as the status of hemp-derived cannabidiol (CBD) within the United States.

The Farm Bill amends the Agricultural Marketing Act of 1946 (AMA) to categorize hemp as an agricultural commodity regulated by the U.S. Department of Agriculture (USDA). Agricultural commodities are eligible for a range of federal programs including crop insurance, research grants, and certification of organic production practices. The Farm Bill also removes hemp from the Controlled Substances Act’s (CSA) list of controlled substances, and creates requirements for hemp “plans” administered by individual states or tribal governments. These plans, which will be submitted by states to USDA over a one-year transition period, must include:

  • Information about the land on which hemp is produced, including a legal description of the land, for at least three years;
  • A procedure for testing hemp THC concentration levels;
  • A procedure for disposal of plants that exceed hemp THC levels, and products from those plants;
  • A procedure to comply with enforcement provisions specified in the AMA;
  • A procedure for conducting random, annual inspections of hemp producers;
  • A procedure for submitting hemp production information to USDA; and
  • Certification that the state or tribe has adequate resources and personnel to implement required hemp production procedures.

Significantly, section 297A of the 2018 Farm Bill redefines the term “hemp” so that the dividing line between hemp and marijuana is the THC level. As the language states:

“The term 'hemp' means 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 concentration of not more than 0.3 percent on a dry weight basis.”

Agriculture Improvement Act of 2018 Sec. 297A

Later in the act under Section 12619 it revises the Controlled Substances Act to specifically exclude “hemp as defined in section 297A of the Agricultural Marketing Act” from being a Controlled Substance.

Thus, a cannabis sativa plant that is less than 0.3% THC and all of its associated parts (including all cannabinoids and extracts) are excluded from the Controlled Substances Act as hemp.

While this means that hemp-derived CBD would not violate the CSA, it does not meant that synthetic CBD or CBD derived from marijuana plants would fall outside the purview CSA. Further, it is not currently clear how production and marketing of such hemp-derived products will be regulated as USDA has yet to issue implementing regulations. The AMA requires USDA to issue regulation and guidance promptly. Finally, it also bears noting that FDA Commissioner Scott Gottlieb recently stated that “it’s unlawful under the [Federal Food, Drug, and Cosmetic Act] 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.” FDA has consistently taken the position that CBD cannot be sold in dietary supplements and foods under the current requirements of the Federal Food, Drug, and Cosmetic Act and has issued Warning Letters to companies for selling CBD in food and dietary supplements.

Overall, this bill is a big win for those selling hemp-derived CBD who no longer have to worry about violating the CSA with their sales. Nevertheless, they should still be attentive to FDA and its enforcement against selling CBD in dietary supplements and foods.