Congress Has Legalized Hemp. What The Future Might Hold
The federal government is poised to quit counting hemp, marijuana's sober and versatile cousin, among the most dangerous class of substances.
Both chambers of Congress voted this week to pass a Farm Bill that removes hemp — cannabis plants with a near-zero amount of the chemical compound that gets you stoned — from the Controlled Substance Act. If President Donald Trump signs the bill into law as expected, growing hemp for commercial purposes will be soon be legal across the country.
What precisely "soon" means is up to the discretion of federal and state regulators, who intend to keep a close eye on anyone interested in planting some seeds.
"It's not yet clear if legalization will have an impact on the 2019 growing season, but certainly for 2020 and beyond we are in a much better position," said Erica McBride, executive director of both the National Hemp Association and the Pennsylvania Hemp Industry Council. "This was definitely a long time coming, and it feels a little surreal, but now we have our work cut out for us to make sure implementation is handled in the best possible way."
Here are some tentative answers to what comes next.
—Wait, wasn't hemp already legal?
Hemp was a cash crop in Pennsylvania and elsewhere in the 18th and 19th centuries, but production was curtailed after World War II amid a marijuana scare. Hemp cultivation became explicitly illegal in 1970 when President Richard Nixon signed the Controlled Substances Act, which classified all varieties of the Cannabis sativa plant as a schedule one drug.
Things progressed in 2014 when Congress included a section in the previous Farm Bill allowing institutions of higher education and people contracted by state agriculture departments to grow hemp without a DEA permit. But the bill's vague language left unclear the permitted commercial scope of state pilot programs, and it did not change the Controlled Substances Act to exempt hemp varieties of cannabis.
Since then, almost 40 states have created hemp cultivation and production programs, according to the National Conference of State Legislatures. Nearly 20 state programs have allowed some commercial endeavors, though Pennsylvania is not one of them.
—So what does the 2018 Farm Bill change?
For starters, simply removing hemp from the Controlled Substances Act evaporates the chilling specter of the Drug Enforcement Administration that kept banks, insurance companies, payment processing and other financial services companies from getting involved in the industry. Now farmers growing hemp can get crop insurance and apply for federal low-interest farm loans, and hemp-related businesses will have much more access to capital, among other opportunities.
The bill allows interstate commerce of hemp products and hemp cultivation and processing for any use. That includes the extraction of cannabidiol, or CBD, a nonintoxicating chemical compound that has a relaxing effect on many users and is already used to treat a variety of medical conditions including insomnia, arthritis, multiple sclerosis and epilepsy.
—Why all the talk about CBD being a moneymaker?
CBD is definitely having a moment. The World Health Organization recently reported CBD does not appear to cause harm or have potential for abuse, and both pharmaceutical companies and investors with deep pockets see huge growth potential for CBD.
In fact, the federal Food and Drug Administration this summer approved a CBD-based drug called Epidiolex, the first approved drug derived from the cannabis plant. Industry experts anticipated the CBD market would grow to $3 billion over the coming five years even if hemp remained classified as a schedule one drug, and some say opening the door to investment capital could spur a $20 billion market.
—OK, back to the 2018 Farm Bill. Does this mean I can plant some hemp seeds as soon as the ground softens?
Nah. The bill assigns the U.S. Department of Agriculture the task of coming up with some basic regulations overseeing hemp production. Its deadline: "As expeditiously as practical."
The bill also gives states the option to have primary regulatory authority over hemp production as long as they submit regulatory plans to the USDA for approval. For starters, regulators need to know who's growing hemp and where it's being grown, and it needs to test plants to make sure levels of intoxicating THC don't exceed 0.3 percent.
But the bill ensures that growers who accidentally exceed that threshold aren't criminally charged. They will have to comply with corrective action plans developed by state agricultural departments, and growers who violate the THC threshold three times will be prohibited from growing hemp for five years.
—How does federal hemp legalization affect the Pennsylvania Department of Agriculture's 2019 program?
You're going to need to be patient. The state agriculture department has a research-based plan and, with no federal rules in place, says it's too late to change course for 2019.
Its application deadline for its 2019 hemp research program is Monday, and the department will select as many as 60 projects in January. Spokeswoman Shannon Powers said the department doesn't plan on extending the application deadline or changing any major program parameters this year absent the new USDA rules.
That means individual applicants shouldn't expect the go-ahead to grow more than 100 acres or to grow, sell or distribute hemp for commercial purposes.
A gray area might be the scope of hemp sales for "market research purposes," which the state agriculture department allows if in accordance with federal and state law.
The department is looking closely for any revisions to its 2019 research program guidelines that may need to be made after the Farm Bill is signed, Powers said, but it hasn't yet identified anything specific.
"Two years of research under our belts puts Pennsylvania ahead of the game, and expands the possibilities for agriculture businesses just that much more," Powers said. "Growers in our research program have already explored options for what works and what doesn't — the challenges they've tackled to date, and the information gathered, positions both growers and the department well to create a successful program in 2019."
—Does hemp legalization create research opportunities for higher education institutions?
Hemp has a slew of potential applications, including but not limited to beauty products, clothing, bioplastics for car parts and more, building materials and housing insulation, energy storage devices for electronics, 3D printing filament, pest resistance and weed suppression and food oils and rope.
But the legal environment had rendered developing any of the more advanced applications cost-prohibitive.
Last year, Lehigh University and Jefferson University began talks about creating an ambitious research alliance to study and develop hemp-related supply chains, tapping some USDA funding to do so.
Lehigh and Jefferson have now signed a letter of intent to establish a "national model for excellence in industrial hemp," Cameron McCoy, assistant vice president of economic engagement at Lehigh, confirmed Thursday. They are working to incorporate Delaware State University into the collaboration as well.
Ray Pearson, a professor of material sciences and engineering at Lehigh, said researchers at Lehigh and Jefferson have been examining some of hemp's potentially more high-tech uses, such as the possibilities for cellulose nanocrystals from hemp fiber.
Hemp cellulose is considered a promising biodegradable alternative to traditional plastics made from nonrenewable petrochemicals. Such advanced applications need to be developed further so farmers have more of an economic incentive to grow the plant.
This chicken-or-egg dynamic has been complicated by the federal prohibition. As long as hemp remained under the federal Drug Enforcement Administration's purview, funding and collaborators have remained scant, Pearson said.
The Farm Bill's hemp legalization opens up numerous research and economic engagement opportunities, McCoy said. A financial supply chain of legal and governmental funding can now be developed, as can a production supply chain establishing how the U.S. can best position itself to provide quantities of hemp needed across various industrial applications.
The Lehigh-Jefferson collaboration will also take a systematic approach to researching the relative value of products and engineering applications derived from hemp's fiber, seed, stalk and hurd (the inner portion of the stalk).
The universities are hopeful the creation of such research and economic development supply chains connecting the interests and concerns of agricultural, business and engineering stakeholders is about to become a lot more doable.
"We are incredibly thankful for the support of Lehigh's leadership, faculty and staff, Pennsylvania's representatives and state agency leaders, and to both Jefferson University and Delaware State University as we explore this opportunity together," McCoy said.