What the 2018 Farm Bill Means for CBD

What the 2018 Farm Bill Means for CBD

Posted by Grön on Dec 21st 2018

And on that farm he had some hemp, C-B-C-B-D!

As someone who regularly writes about the world of CBD, I spend a little time every morning looking over my google news alert hits to make sure I’m at least partially in the know. (Side note: for those of you who don’t know about google news alerts, get on it! It’s an awesome way to keep informed on whatever you want.) Since last week, the bulk of CBD news on the internet has had to do with the recent US farm bill that was passed by congress and then officially signed into law by President Trump. Evidently, this farm bill is going to have some pretty important repercussions for CBD and the companies that make it.

The problem is, I didn’t know what in the world the farm bill was! Now, I consider myself a pretty informed individual, but for some reason this particular piece of legislation has historically missed my radar. To make matters worse, the status of CBD in the United States has been murky at best, so I wasn’t even 100% sure I knew what the farm bill was fixing with regard to CBD. The whole thing just felt like one big blank spot in my CBD education.

If there is anything I learned from my time as a teacher, it’s that if one person has a question there is a good chance ten others in the class have the same question but are too afraid to ask. So, I looked into what the farm bill is and today I’m going to spend a little time catching us all up to speed on what it means for the CBD industry. Let’s start with a little context and then get into a brief (I promise!) history lesson on the farm bill and the legal status of CBD up until now.

We eat a lot of food!

Do you ever stop and think about the sheer scale of food production that goes on in this country every day? Seriously, the numbers of it blow my mind! I have been vegan for 14 years now, but before that I used to love chicken wings, and I had a crazy revelation one day while enjoying a basket of wings at a chain establishment.

The place I was at had the option of ordering only drumsticks, and my table full of friends decided we would all share a big basket of 30 pieces. About halfway through, I looked at the remaining drumsticks and it hit me—at two drumsticks a bird, this meal required 15 chickens! I then looked around at the packed restaurant and started mentally tallying the number of chickens required to produce the orders at every table. How many chickens was that? 200? 400? And this was only ONE restaurant! The same scene was playing out in every wing joint across the entire country! And then my mind expanded to other types of restaurants, and then to grocery stores. The number of chickens that have to be processed every single day started to boggle my mind. How in the world did such a system even work?

Of course, I then quickly realized that you could have this same train of thought with anything. Vegetables, beans, rice, pork, fish, whatever. We collectively eat A LOT every single day, and when I take a step back and take it all in it starts to make me feel a little dizzy.

But maybe I’m weird…

The point is, all of this food doesn’t arrive at your restaurant, grocery store, or farmer’s market by accident. It takes a lot of organization, regulation, subsidies, and nutritional assistance programs to make sure all that food gets produced, gets produced safely, and gets to where it needs to go. That’s where the farm bill comes in.

What is the farm bill?

The farm bill is a huge piece of legislation that is passed every 5 years in the US and touches nearly every aspect of how food makes it from the soil to our plates. This far-reaching bill deals with everything from what crops can and can’t be grown and by whom, to things like food stamps and other government programs that assist American families with getting the nutrition they need. Much of the bill covers what I would call “business related” aspects of farming, like federal loan programs for farmers, crop insurance, funding subsidies given to specific crops, and regulations covering the exporting of domestically grown food.

The origins of the farm bill are actually somewhat interesting, or at least as interesting as the history of American legislation can be. Turns out, things were pretty bad for farmers in the 1920s and 30s. World war I had just ended, and with the war over, the farming situation in Europe was finally kicking back into gear. That means there was less demand for American crops, and the farmers over here found themselves with a bunch of food that they couldn’t sell. If there is anything I remember from economics 101, it’s that high supply and low demand makes prices fall pretty fast.

The hits kept coming…

To make matters worse, 1929 rolled around, and with it came a little thing called the Great Depression. Families lost their jobs and started purchasing less of everything, including food, to make ends meet. This drove demand down even lower, which drove prices into the dirt. Tons of farmers went bankrupt, and with banks themselves on hard times, there was no way for farmers to get loans and keep their farms operating.

In 1933, President Roosevelt created the first farm bill as part of his New Deal program to try and boost the rapidly falling crop prices. It did this by paying farmers to put caps on the amount of food they grew. That’s right, the farm bill, from the very beginning and all the way through to today, pays farmers to NOT grow food. It sounds a bit ridiculous but actually makes some economic sense. When prices go down, farmers make less money, so to compensate they grow more food to sell, which increases supply, which lowers prices, and then farmers try to grow more to compensate again. It’s a downward spiral. So, paying farmers to limit their crops gives them the money they need to keep their farms operational while also limiting supply and keeping prices up. Basically, it short circuits what would otherwise be a vicious cycle.

Still seems counter intuitive to pay farmers not to farm though, doesn’t it?

A brief history of hemp and CBD.

Most of us have heard the stories of our founding fathers growing expansive fields of hemp, and as far as I can tell, those stories are completely true. Early Americans reportedly grew large amounts of hemp and the Declaration of Independence was actually drafted on paper made from hemp fibers. Hemp was used to make fabric, rope, paper, thread, and even food (who doesn’t love some hemp hearts in their morning smoothie?). It looks like the early Americans were downright swimming in hemp from sea to shining sea!

So what went wrong? Where is all the hemp now? Well, as many of you surely know, hemp and marijuana often get tossed in with each other (Take a look at this blog post for a rundown of the differences. I have thoughts on this, but that will have to wait for another day!). In 1937, the US passed the Marihuana Tax Act (Yup, with an “H”) which made it increasingly difficult for farmers to grow hemp crops. Later in 1970, the government passed the Controlled Substance Act which labeled all cannabis varieties, hemp and marijuana both, as Schedule I drugs, along with the likes of heroin, LSD, and other hard drugs. Kind of difficult to grow hemp when the government sees it as equivalent to manufacturing ecstasy.

Naturally, poor CBD got lumped into all this madness. CBD wasn’t isolated and extracted by scientists until the 1940s and 50s when the cultivation of hemp in this country was already on the way out, and once cannabis was placed on the Schedule I list so went CBD. In recent years, the DEA has moved CBD from Schedule I to Schedule V, but it has still been difficult to find technically legal sources of CBD due to the murky legal waters surrounding cannabis and hemp. Frankly, the whole thing has been a big mess!

What does the 2018 farm bill mean for CBD?

This new, 2018 farm bill makes some pretty big changes for hemp and therefore CBD. Here is a quick rundown of the important beats (thanks to the Emerge Law Group for this list!):

  • Completely removes industrial hemp from the Controlled Substance Act list
  • Defines “industrial hemp” as any part of the cannabis sativa plant that has less than 0.3% THC by weight. This includes anything derived from the plant, including CBD!
  • Moves regulation of industrial hemp from the Drug Enforcement Administration (DEA) to the US department of Agriculture (USDA)
  • Allows for interstate commerce of industrial hemp and the products made from it, like CBD
  • Allows the FDA to regulate industrial hemp products as it sees fit

This is all a pretty big deal for the CBD industry. Think about it, until now, CBD products have been operating in this super vague and confusing space. It was technically on the controlled substance list, regulated by the DEA, and derived from a crop that was illegal for almost everyone to grow. Because of all of that, major companies wouldn’t touch CBD with a ten foot pole. Ever see an ad for a CBD product on Instagram, Facebook, or YouTube? I’m betting you haven’t, and its because the legality of the substance has scared off anyone with something to lose. It’s the same reason you never saw CBD at Walmart, Target, or a major grocery store.

But now it looks like things are going to start changing. With the changes brought in by the 2018 farm bill, major retailers will likely feel much more comfortable carrying CBD products. Christine Smith, the founder and CEO of GrönCBD, thinks the flood gates have just been opened on CBD sales.

“We are about to see a deluge of CBD hitting the market,” said Smith. “Major retailers are going to feel more comfortable carrying CBD, and many advertising channels that previously cut off CBD companies will now be available. We are going to see a lot of CBD in the very near future.”

But things aren’t all puppy dogs and rainbows, Smith warns. “The waters are going to get really murky for the next 12 to 18 months,” Smith continued. “With regulation moving from the DEA to the USDA, there will be a transitional period where the CBD landscape will be the Wild West with little to no regulation. The regulation will definitely come, but in the short term it is going to be hard for the consumer to determine which products are safe and what’s in them.”

Final Thoughts

The 2018 farm bill looks like it is an amazing first step for the full legalization and regulation of CBD. Moving CBD off the controlled substance list is a no-brainer, and having the department of agriculture monitor hemp instead of the DEA is a move that has been a long time coming. By all accounts, CBD looks like a pretty powerful substance that can do a lot of good for a lot of people, so its wonderful to see things moving in the right direction.

But as Christine Smith points out, we need to be careful in the short term. Until tighter regulation becomes available, make sure you get your CBD from a reputable company. When choosing a CBD company, ask yourself the following questions:

  • Was it made in the US?
  • Is it from an established, trusted company that you can find a history for?
  • Do they test their products?
  • Is that testing available upon request?
  • Do they include testing results with the product?

But these are really the precautions you should take when buying any sort of supplement or health product. In general, do your research, be smart, and lets all enjoy the newly legal CBD products that are surely coming to a store near you!