The U.S. Farm Bill and Its Implications for the Hemp Industry
The U.S. Farm Bill, a crucial piece of legislation for the agricultural sector, is set for renewal in 2023. This nearly $1 trillion spending package encompasses a wide range of agricultural and food policies, from crop subsidies to nutrition assistance programs. For the hemp industry, this bill presents a rare opportunity for a much-needed reset to clarify hemp rules for businesses and protect consumers. However, the pace of the bill's enactment is critical. Delays, particularly due to the current political divide in Congress, could further hamper an industry already struggling to recover from historically low production levels.
Unresolved Issues from the 2018 Farm Bill
The 2018 Farm Bill, which federally legalized hemp, left several critical issues unresolved, notably the regulation of CBD as a food additive and dietary supplement. Currently, the U.S. Food & Drug Administration (FDA) does not permit CBD in food or as a dietary supplement. The new Farm Bill could change this, allowing broader availability and use of CBD in end products. This would establish clearer rules for growers and processors, and enhance consumer protection against potentially unsafe CBD products.
Potential Enhancements in the 2023 Farm Bill
The upcoming Farm Bill could introduce significant enhancements for the hemp industry, including:
- More USDA funding for state hemp programs.
- Opening hemp to subsidies enjoyed by other crops.
- Repealing the ban on felons operating in the industry.
- Permitting hemp grain for animal feed.
Funding Programs at Risk
Specific ongoing funding programs crucial to hemp growers, such as the National Organic Certification Cost Share Program and the Environmental Quality Incentives Program (EQIP), are at risk if the bill is delayed. These programs provide essential financial and technical assistance to agricultural producers, fostering sustainable practices and environmental conservation.
Delta-8 THC and Other Hemp-derived Compounds
A major area of focus in the new Farm Bill is the regulation of delta-8 THC and other hemp-derived psychoactive compounds. The 2018 Farm Bill's broad definition of hemp led to a proliferation of products with intoxicating effects, creating a regulatory gray area. Congress now faces the challenge of addressing these products to ensure consumer safety and market consistency.
Addressing "In-Progress" Hemp Testing
Another significant issue is the "in-progress" hemp testing. The current federal hemp regime does not address temporary spikes in THC levels during processing, creating legal risks for hemp processors. Addressing this gap is crucial for the industry's stability and growth.
Options for Congress in Addressing Hemp
Congress has several options for addressing hemp in the 2023 Farm Bill:
- Maintaining the status quo from the 2018 Farm Bill.
- Liberalizing federal hemp policy, potentially increasing allowable THC levels.
- Introducing more regulations, such as age limits for psychoactive cannabinoids.
- Closing perceived loopholes from the 2018 Farm Bill, possibly reducing allowable THC levels.
Key Improvement Areas Identified by Industry Experts
In discussions prior to the midterm elections, industry experts identified key areas for improvement in the 2023 Farm Bill:
- Addressing the FDA’s stance on CBD products.
- Raising the allowable THC threshold in hemp products.
- Revising banking regulations and easing limitations for hemp companies.
- Removing cumbersome DEA lab testing requirements for hemp.
- Providing a USDA stamp of approval for interstate hemp shipment.
As Congress navigates these complex issues, the future of the U.S. hemp industry hangs in the balance. The decisions made in the 2023 Farm Bill will have far-reaching implications, not only for hemp growers and processors but also for consumers and the broader agricultural sector.