Part 1: The Pre-2018 Landscape and the Passage of the 2018 Farm Bill

Part 1: The Pre-2018 Landscape and the Passage of the 2018 Farm Bill

Setting the Stage

The 2018 Farm Bill, also known as the Agriculture Improvement Act of 2018, marked a significant milestone for the hemp industry. This legislation redefined hemp, opening doors for legal cultivation and commercialization. To understand its impact, it's essential to look at the hemp industry's landscape before 2018 and the transformative changes brought about by the bill.

The Hemp Industry Before 2018

Historical Context

Before the passage of the 2018 Farm Bill, hemp was classified as a Schedule I controlled substance under the Controlled Substances Act of 1970, severely limiting its cultivation and use. Despite hemp's low THC content and numerous industrial applications, it was often conflated with marijuana, leading to regulatory challenges and widespread stigma.

Hemp has a long history of use in the United States, dating back to the colonial era when it was grown for its strong fibers used in rope, sails, and clothing. However, the Marihuana Tax Act of 1937 and later the Controlled Substances Act effectively ended legal hemp production in the country. For decades, the hemp industry struggled to gain legitimacy and recognition.

Early Advocacy and Pilot Programs

In the early 2000s, advocacy groups and forward-thinking states began to push for the reintroduction of hemp cultivation. States like Colorado and Kentucky implemented pilot programs to explore the viability of hemp as an agricultural commodity. These efforts laid the groundwork for broader legislative changes at the federal level.

One notable figure in this movement was Ryan Loflin, a Colorado farmer who, in 2013, became the first person to legally grow hemp in the U.S. in over half a century. His success demonstrated the crop's potential and helped galvanize support for more comprehensive reforms.

The Passage of the 2018 Farm Bill

Legislative Journey

The journey to the 2018 Farm Bill was marked by significant lobbying and bipartisan support. Key lawmakers, including Senate Majority Leader Mitch McConnell, who represented Kentucky—a state with a rich history of hemp farming—played crucial roles in championing the bill. Their efforts were driven by the promise of economic revitalization for rural areas and the potential health benefits of hemp-derived products.

On December 20, 2018, President Donald Trump signed the Agriculture Improvement Act into law. The bill included several critical provisions for the hemp industry:

1. Reclassification of Hemp: The Farm Bill reclassified hemp, defining it as cannabis containing less than 0.3% THC by dry weight. This effectively removed hemp from the list of controlled substances, making it a legal agricultural commodity.

2. State and Tribal Plans: The bill allowed states and Native American tribes to submit plans to the USDA for the regulation and production of hemp within their jurisdictions.

3. Interstate Commerce: It established that hemp and hemp products could be transported across state lines, promoting broader market access.

4. Research and Development: The bill expanded opportunities for hemp research and development, encouraging innovation and growth within the industry.

Initial Industry Reactions

The passage of the 2018 Farm Bill was met with enthusiasm and optimism from industry stakeholders. Many saw it as the dawn of a new era for hemp, opening up opportunities for farmers, entrepreneurs, and consumers alike. Companies like Green Roads, founded by Arby Barroso, were poised to take advantage of the newfound legality and expand their operations.

Arby Barroso: Arby Barroso's journey through the cannabis and CBD space began in Colorado in 2013, where he faced personal challenges with opioid addiction. He found relief through cannabis products, which inspired him to start Green Roads. Reflecting on the industry's evolution, Barroso noted, "I've seen the evolution of where CBD was. We were doing $70 million on a non-intoxicating cannabinoid in 2019, all the way to where the conversion really started in 2019. The industry's growth has been tremendous, but it has come with its share of challenges, particularly from larger cannabis companies."

James Stephens: James Stephens emphasized the mixed impact of the 2018 Farm Bill, noting, "The bill led to a surge of interest and investment in the industry as many saw it as a new frontier for wellness products. However, the anticipated approvals for selling hemp-derived CBD products from the FDA never materialized, causing significant disruption and adjustment within the industry."

Challenges and Regulatory Hurdles

While the 2018 Farm Bill legalized hemp at the federal level, it also introduced a complex regulatory landscape. The USDA was tasked with creating guidelines for hemp cultivation, and states had to develop their own regulatory frameworks. This patchwork of regulations created challenges for businesses operating across state lines.

Additionally, the FDA's stance on cannabinoids in food and supplements added another layer of complexity. Despite hemp's legal status, the FDA has yet to fully approve cannabinoids like CBD for use in food and dietary supplements, leading to a significant gray area in the market.

Closing Thoughts

The 2018 Farm Bill was a turning point for the hemp industry, laying the groundwork for its current state. While the initial changes brought enthusiasm and new opportunities, they also introduced regulatory challenges that continue to shape the industry. Understanding the historical context and the journey to legalization provides valuable insights into the ongoing evolution of the hemp market.