The 2018 Farm Bill’s tumultuous journey has finally ended as President Donald Trump signed the legislation into law Thursday, federally legalizing hemp. Farmers have been cultivating hemp under the supervision of state-run pilot programs since the 2014 Farm Bill. Now, farmers can receive grants for research, purchase insurance, and enjoy the many other benefits afforded to them with other crops. Consequently, hemp cultivation is bound to skyrocket and along with it the market for hemp-derived goods, especially CBD products. Reports estimate the CBD industry will be worth $22 billion by 2022.
Hemp Legalized Amid Controversial $867 Billion 2018 Farm Bill
President Trump signed the 2018 Farm Bill into law on Thursday, an $867 billion piece of legislation that legalizes hemp.
The provisions allow for the cultivation and sale of hemp, while also removing the plant from the Controlled Substances Act and making it an agricultural commodity.
States must submit hemp oversight plans to the US Department of Agriculture for approval before hemp cultivation can begin.
Federal hemp legalization was first introduced to the 2018 Farm Bill by Senator Mitch McConnell (R-KY), and the provisions were passed in the Senate’s version of the legislation in June.
The House’s proposal had passed just a week earlier without hemp legalization.
While the hemp provisions were never a point of tension, the House and Senate hotly debated many other issues, such as work requirements for food stamp eligibility.
The disagreements halted the legislation’s progress to the point that the previous Farm Bill provisions expired in September, leaving farmers in uncertainty.
After the midterm elections, members of Congress came back ready to strike a deal.
Hemp legalization was in no danger, especially after McConnell personally guaranteed the hemp provisions would be included in the final draft, and on December 12th both chambers of Congress passed the final version of the Farm Bill with the hemp legalization language.
What’s Next for Hemp and CBD?
Now that hemp will no longer operate in a legal grey area, what will be the effects of legalization?
First of all, hemp and CBD should soon enjoy some much-needed regulation.
Several companies have peddled poor quality CBD products, often containing little to no CBD in them, hurting the reputation of the honest brands in the industry.
This has drawn the ire of the FDA, which has sent warning letters to dozens of companies over the past few years ordering these companies to cease from making medical claims about CBD or marketing the compound as a dietary supplement.
With the coming regulation of operations and processes, companies will be held accountable for the products they make.
Second, legalization opens up both the hemp and CBD industries for better business opportunities.
Companies can now work with banks, get insurance, and have increased access to investment capital.
Anticipating this legalization, a recent projection from Brightfield Group estimated the CBD market would be worth $22 billion by 2022.
The industry is currently expected to hit $591 million by the end of this year.
Finally, while hemp legalization is a major victory for CBD, the next step is for the cannabinoid to achieve FDA approval, which has been difficult to obtain.