Congress OKs legal hemp; Trump nod expected
Low-THC version of cannabis would be treated like any other crop
PORTLAND, Ore. — Hemp is about to get the nod from the federal government that marijuana, its cannabis plant cousin, craves.
A provision of the farm bill that received final approval in Congress on Wednesday removes hemp from the list of federally controlled substances and treats the low-THC version of the cannabis plant like any other agricultural crop. THC is the cannabis compound that gives pot its high.
President Trump is expected to sign the bill into law next week.
The change sets the stage for greater expansion in an industry already seeing explosive growth because of growing demand for cannabidiol, or CBD, a non-psychoactive compound found in hemp that many see as a way to better health.
Federal legalization could triple the overall hemp market to $2.5 billion by 2022, with $1.3 billion of those sales from hemp-derived CBD products, according to New Frontier Data, a cannabis market research firm.
“It’s a huge deal because it’s a domino effect. Banks can get involved now and if banks get involved, then credit card processors get involved — and if that happens, then big box stores like Target and Walmart get into it,” said Sean Murphy, a New Frontier data analyst who’s tracked the industry since its infancy in 2015.
Hemp, like marijuana, already is legal in some states. Approval at the national level brings a host of benefits that the pot industry has yet to see.
Hemp farmers will be able to buy crop insurance, apply for loans and grants, and write off their business expenses on their taxes like any other farmer.
And those who sell dried flower or CBD-infused products made from hemp can now ship across state lines without fear of prosecution as long as they are careful not to run afoul of the U.S. Food and Drug Administration.
Many did so before, but always looked over their shoulder.
Michelle and Scott Fields, who run an organic hemp farm outside Grants Pass, Ore., include a detailed letter to law enforcement in each package they ship that explains the dried flowers inside may look like pot, but actually can’t get anyone high.
“Probably the best part of this is that everybody can take a sigh of relief and not worry about that gray area anymore,” said Michelle Fields, who worked in real estate until three years ago, when she and her husband started Fields of Hemp LLC.
Hemp looks like marijuana to the untrained eye, but it contains less than 0.3 percent THC. Federal legislation passed four years ago cracked open the door for some farming by allowing states to create hemp pilot programs or to conduct research on hemp cultivation.
Twenty-three states issued 3,544 licenses in 2018, said Eric Steenstra, president of Vote Hemp, a nonprofit hemp advocacy group. At the same time, the total market for hemp — from textiles to seeds to CBD oil — has grown from a few million dollars in 2015 to $820 million today and about a third of that is from hemp-derived CBD, Murphy said.
Large companies already experimenting in the hemp space anticipated the policy change and are poised to cash in.
Vitality, based in Eureka, Mont., is a large U.S. hemp producer and grew 20,000 acres this year. The company last week announced a merger with the Canadian CBD extractor and marketer LiveWell.
The new company aspires to become one of the largest hemp production and CBD extraction companies in North America, producing more than 6,600 pounds of CBD isolate a day by mid-2019, according to a company statement on the deal.
Isolate is a crystalline powder form of CBD and the purest product possible. The odorless, tasteless powder is commonly sold in one-gram jars that retail for $35$60 each.