The United States leads the world in the importation of hemp, with China and Canada acting as the top two exporters. And yet the federal government continues to prohibit the commercial production of hemp.
According to a 2005 Congressional Research Service report, the U.S. remains the only developed nation in the world without a commercial hemp industry.
In 2014, Congress cracked the door open for hemp in the U.S. with an amendment to the 2014 Farm Bill. The law allows hemp cultivation for research purposes, but prohibits “commercial” production.
So, what exactly does this mean in practice? Nobody really knows. Executive branch interpretation of the law has led to widespread confusion about what is and is not allowed.
Ultimately, states should simply ignore federal law and develop commercial hemp industries within their borders.
The 2014 farm bill includes a provision allowing a handful of states to begin limited research programs growing hemp. The “hemp amendment” —
…allows State Agriculture Departments, colleges and universities to grow hemp, defined as the non-drug oil-seed and fiber varieties of Cannabis, for academic or agricultural research purposes, but it applies only to states where industrial hemp farming is already legal under state law.
In 2016, the U.S. Department of Agriculture and Drug Enforcement Agency released a “statement of principles” to guide interpretation of the hemp section in the Farm Bill. It states, “The growth and cultivation of industrial hemp may only take place in accordance with an agricultural pilot program to study the growth, cultivation, or marketing of industrial hemp established by a State department of agriculture or State agency responsible for agriculture in a State where the production of industrial hemp is otherwise legal under State law.”
In short, the current federal law authorizes farming of hemp – by research institutions, or within state pilot programs – for research only. Farming for commercial purposes by individuals and businesses remains prohibited.
But federal law does authorize researchers to study “marketing” of industrial hemp. In order to study marketing, the view goes, producers must be able to sell it. To this ends, the statement of principles addresses the sale of industrial hemp within a pilot program.
“For purposes of marketing research by institutions of higher education or State departments of agriculture (including distribution of marketing materials), but not for the purpose of general commercial activity, industrial hemp products may be sold in a State with an agricultural pilot program or among States with agricultural pilot programs but may not be sold in States where such sale is prohibited.”
No clear line exists between “general commercial activity” and marketing research. It really depends on the subjective interpretation of those enforcing the law. Theoretically, the policy guidance could allow for a wide range of activities normally considered “commercial.” Or it could prohibit almost everything.
Several members of Congress, including Sen. Rand Paul, sent a letter to the Department of Agriculture asking it to clarify certain parts of its statement of principles. The signers of the letter were concerned that the interpretation of “commercial activity” was so narrow and could effectively ban all sales and marketing of industrial hemp, even within a pilot program.
The 2014 Farm Bill defined agricultural pilot programs as programs “to study the growth, cultivation, or marketing of industrial hemp.”
The guidance says that industrial hemp products “may be sold,” “but not for the purpose of general commercial activity.” The congressional definition of hemp did not narrow marketing research in any such way, nor prompt the agencies to provide a narrower definition for marketing research. A single sale is commercial in nature.
Please confirm that “general commercial activity” does not prevent any type of sale occurring from the framework of an approved pilot program. [Emphasis added]
This demonstrates the lack of clarity in federal hemp law. It prohibits “general commercial activity,” but how that’s defined remains unclear. Some sales are apparently allowed within a research pilot program. But in practice, it comes down to the discretion of federal enforcers as to the extent of hemp sales permitted under the law.
CBD oil adds another layer of confusion to the labyrinth of federal law.
CBD oil has proven effective in treating a number of medical conditions, including seizures, pain and anxiety. It can be produced for research purposes within a hemp pilot program. It is currently one of the leading uses for industrial hemp and by far the most profitable. A number of states have authorized the sale of CBD oil through their hemp pilot programs. Other states such as Oregon have ignored federal law completely and allowed the sale of CBD oil in a commercial setting.
But despite its effectiveness, CBD oil is not FDA approved. According to the DEA, it cannot be sold under any circumstances. An Indiana TV station interviewed DEA spokesman Rusty Payne.
“It’s not legal. It’s just not.”
Payne says cannabis plants are considered a Schedule I controlled substance, and medicinal oils derived from cannabis plants are illegal according to two federal laws: the Controlled Substance Act and the Food, Drug and Cosmetic Act. He said confusion surrounding the Agricultural Act of 2014 (better known as the “Farm Bill”) is frequently cited as legal justification by those who want to manufacture, sell or use CBD oil. The DEA believes the Farm Bill permits only CBD research — not CBD marketing and sales.
“Anybody who’s in violation [of the federal laws] always runs that risk of arrest and prosecution,” he said.
Policy guidance and efforts to interpret federal law are really nothing more than theoretical speculation. All that really matters is how the feds enforce the law in practice.
Even in states that have completely ignored federal law and moved forward to license hemp production for purely commercial purposes, the feds are not enforcing prohibition on commercial hemp. Take Oregon for example.
The Oregon legislature initially legalized industrial hemp production in 2009. While it was technically legal to grow hemp in the state, farmers didn’t take advantage of the opportunity for nearly five years. When the Oregon Department of Agriculture finally put a licensing and regulatory program in place early in 2014, farmers began growing hemp. The initial regulatory structure placed significant limits on hemp farming and effectively locked small growers out of the market. In 2016, Gov. Kate Brown signed House Bill 4060 into law. It relaxed state laws regulating hemp already on the books and made the crop more like other agricultural products. Within months, the Oregon Department of Agriculture had already promulgated new rules under the reformed law. According to Oregon’s Cannabis Connection, the rules set the stage to creates a “massive” medical hemp market. The state produced 3,469 acres of hemp in 2017.
The federal government faces the same problem enforcing hemp prohibition as it does enforcing its marijuana laws. It simply doesn’t have the personnel or resources. This is evident in states that have ignored federal hemp laws. For example, federal enforcement has had zero impact on Oregon’s commercial hemp industry.
“Oregon has not had run-ins with the federal government over hemp,” Lindsay Eng, the state Department of Agriculture’s director of market access and certification told the Washington Capital Press. “We haven’t heard from the DEA at all, and we haven’t heard from growers saying they have.”
As far as CBD oil goes, the DEA even admitted it’s not enforcing the law. When WTHR asked the DEA spokesman what he would do if he was in the position of a mother who found CBD helped her child deal with excruciating pain related to cancer treatment, he said he would do the same exact thing — without hesitation.
“I cannot blame these people for what they’re doing. They are not a priority for us … it would not be an appropriate use of federal resources to go after a mother because her child has epileptic seizures and has found something that can help and has helped. Are they breaking the law? Yes, they are. Are we going to break her door down? Absolutely not. And I don’t think she’ll be charged by any U.S. Attorney.”
While prospective hemp growers still have to take federal law into consideration, eliminating the state requirement for federal permission clears away a major obstacle to widespread commercial hemp farming within the borders of the state.
Most states that have legalized hemp have created programs complaint with federal rules. In other words – for research only within pilot programs. This has yielded some impressive acreage in states like Kentucky, New York and North Dakota. But several states got frustrated with the federal limitations and have expanded their programs to allow commercial production.
Recognizing its limited research program was hindering the development of the industry, West Virginia dumped its federally compliant hemp program during the 2017 legislative session and will now issue federally non-compliant commercial licenses to growers. West Virginia Public Broadcasting confirmed limits imposed by the old program due to its conformity with federal law were holding back the development of a viable hemp industry and everyday farmers cannot benefit.
“But because of the strict requirements under the 2014 bill, growers are not able to sell their plants and cannot transport them across state lines to be turned into those usable products. That’s limited the ability to create a real hemp industry in the state.”
Other states should follow suit. The feds are not enforcing their ban on commercial hemp farming – however that might be defined. Instead of wasting time and energy trying to create a research program that may or may not ultimately prove to be federally compliant, states should just press ahead and develop a commercial hemp industry without federal permission.