When the 2018 Farm Bill was signed, legalizing industrial hemp nearly five years ago, no one could have predicted all of the advances and innovations that have come from the burgeoning legal industry. During this time, many jurisdictions have wrestled with the implications of legal cannabis products and their impact on law enforcement and the criminal prosecution of cannabis users. However, this year, our fledgling industry is up for review and is due to be heavily scrutinized.
A new Federal Farm Bill is usually voted on by Congress every five years in order to codify various agricultural issues. The changes coming for hemp in 2023 are likely to have far-reaching implications for the entire industry. It is important for us all to make plans to adapt and respond quickly to any regulatory changes that are made. We anticipate cannabis-specific changes that could reshape the rules for hemp growers, processors, wholesalers, and retailers. We all need to be watching this very closely as it develops.
These are the main issues that we are expecting the 2023 Farm Bill to address:
Prohibition vs. Hemp Cannabinoids
Since the legalization of cannabis hemp, research into the many varied cannabinoids expressed by the plant has exploded onto the scene, followed by a plethora of cannabinoid-based products being introduced to the legal market. Delta-8, delta-10, HHC, THCA, and various other cannabinoids have gained increasing popularity in states where recreational cannabis is still prohibited. The market for these products as an alternative to recreational cannabis is very likely to come under fire.
Over the last several years, a great deal of support for increasing the permissible THC threshold from 0.3% to 1% has been expressed. This increase would take some of the pressure off of growers and allow for the development of cultivars adapted to different climates. It is anticipated that all psychoactive cannabinoids, not just delta-9 THC, are likely to be included under this new limit. Such restrictions will likely bankrupt many hemp businesses if they do not start planning for the future.
FDA vs. Hemp CBD
The FDA has been heavily criticized by interest groups over the last several years regarding their inaction on CBD. As such, many people have been encouraging their legislators to include regulations for CBD and other non-intoxicating cannabinoids as dietary supplements.
The FDA's failure to clarify its position on CBD products has severely limited the hemp industry. Retailers all over the country are afraid to carry CBD products in their stores due to this lack of guidance. The total absence of regulation has delayed research, further suppressing the potential growth of this industry. Despite their promises, the FDA has failed to do its job in this matter, so it has been left to Congress to decide these issues for us instead.
This much-needed regulation of hemp and hemp derivatives as dietary supplements would create FDA compliance requirements for our currently unregulated market and eliminate bad actors selling tainted products to unsuspecting consumers.
Financial Institutions vs. Hemp Businesses
Banking and financial institutions have been hesitant to work with hemp businesses due to the perceived risk associated with a lack of clearly defined regulations for the newly legalized industry. Revising banking regulations would help hemp companies obtain the loans needed to build thriving businesses. A USDA stamp of approval has been suggested for hemp that is shipped between different jurisdictions. Clarifying shipping rules pertaining to interstate transport will be essential to minimize compliance concerns for insurance purposes.
All signs point to major changes coming for the hemp industry in 2023. When the new Farm Bill is passed, it is likely to eliminate many products and even entire companies from the market. Heavy regulations are almost certain to be imposed, but there will be opportunities created for those businesses that prepare for what is coming. The 2023 Farm Bill may be extremely disruptive for many businesses, but it will not be the end of the hemp market.
Written By: Joseph Jackson