USDA Publishes “Economic Viability Of Industrial Hemp In The United States: A Review of State Pilot Programs”

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BY TYLER B. MARK, JONATHAN SHEPHERD, DAVID OLSON, WILLIAM SNELL, SUSAN PROPER, AND SUZANNE THORNSBURY

After a hiatus of almost 45 years, the 2014 Farm Bill reintroduced industrial hemp production in the United States through State pilot programs. This study documents outcomes and lessons learned from the State pilot programs and examines legal, agronomic, and economic challenges that may impact the transition from the pilot programs to economically viable commercial production.

In this publication…

How CBD Took The Mainstream Marketplace By Storm

Guest Column by Elliot Cornish

A few years ago, you’d have been hard pressed to find even a cannabis user who could tell you much about cannabidiol (CBD), but times have changed. The CBD industry is set to be worth more than $5 billion by 2020, according to the latest research from New Frontier Data.

For a long time, cannabis growers actively tried to reduce the CBD content in strains as much as possible, in order to satiate the huge recreational demand for THC-rich cannabis. Today CBD is overshadowing demand from “recreational marijuana” consumers, taking the mainstream marketplace by storm.  In this article, we are going to look at the reasons behind the newfound popularity of CBD, and why this cannabis derivative enjoys a unique legal status.

CBD is non-psychoactive

By far the most attractive quality of CBD for the general consumer market is that it’s non-psychoactive. Users can take CBD without worrying that they will get “high” or suffer any short-term physical or mental impairment. Moreover, the long-term risks of taking CBD are also minimal, with none of the memory or motivation loss that is sometimes associated with regular cannabis use.

CBD can be used to enhance general health, and also as a natural solution for many conditions, which we will explore later.

Legal CBD is made from hemp

In states where cannabis is fully legal, you may come across CBD products made from regular cannabis, however CBD products found anywhere else will be made from hemp.

Hemp is a type of cannabis sativa, cultivated to produce high amounts of CBD, but critically just traces of psychotropic tetrahydrocannabinol (THC). This is why hemp extracts are used to make CBD products.

In the United States, federal law still classifies cannabis and cannabinoids as Schedule I under the Controlled Substances Act. The recently passed Farm Bill has granted an exception in the case of hemp products.   Hemp-derived CBD is legal to make, possess, sell and consume, as long as the overall product has less than 0.3 percent THC.  In the United Kingdom, the legal THC limit is set at just 0.2 percent, whereas in Switzerland it is a smidge higher at 1 percent.

This legislation has carved out a legal market for CBD-isolate products, which are made just with CBD, and for full-spectrum CBD, which is made with the entire hemp plant extract for extra therapeutic effects, but is still non-intoxicating.

Changing perceptions toward cannabis

While hemp CBD products are significantly different to standard cannabis, and not affected by the relaxation of laws around the herb, there has been a positive knock-on effect for these products, thanks to the positive publicity for marijuana in general.

A recent Gallup poll found that two of every three Americans are now in favor of full legalization of cannabis, more than double what it was in 2000. And a survey of CBD users released in 2018 found that nearly half of the people using the plant were not regular cannabis users, and that almost 40 percent were taking it for non-medicinal reasons.

An introduction to CBD’s benefits

The benefits of CBD are mostly conserved to the endocannabinoid system (ECS), which the cannabinoid works to regulate. A finely balanced ECS promotes good immune system health, a regulated mood and appetite, healthy bones, good cognition and strong reproductive health.

CBD is an antagonist of the main two cannabinoid receptors, and also the GPR55 receptor, which is sometimes referred to as the third cannabinoid receptor. That CBD inhibits activity at these receptors does not mean it is ineffective. In fact, suppressing the CB1 receptor helps with keeping a balanced mood.

CBD also boosts the availability of anandamide, an endocannabinoid, by stopping its reuptake at the FAAH enzyme. Anandamide is a CB1 and CB2 receptor agonist, and is considered a natural – although much weaker – THC because it reacts with the body similarly. Anandamide binding to the CB1 receptor may help with cognition, improving mood and lowering pain perception. Meanwhile, binding to the CB2 receptor is key to reducing inflammation, in the brain, skin and throughout the body.

Final thoughts

CBD users have fantastic choices nowadays, from CBD vape oil wholesale products, to tincture oils, concentrates, creams, edibles and more. And as the industry gets even bigger going forward, we should be graced with even more innovative options. 

McConnell Signs Farm Bill Conference Report With Kentucky Hemp Pen

KENTUCKY:  U.S. Senate Majority Leader Mitch McConnell (R-KY) announced today that his language to legalize industrial hemp is officially included in the finalized Agriculture Improvement Act of 2018 (Farm Bill). The Farm Bill Conference Report takes serious steps to ensure the future of American agriculture, and it contains the legislation — championed by Majority Leader McConnell — that would empower farmers to begin cultivating industrial hemp, a crop that can play a key role in the economic future of Kentucky and the nation.

The Farm Bill Conference Report was signed by conferees last night, including Senator McConnell who signed it with a pen made from hemp grown in Kentucky. U.S. Representative James Comer (KY-01), another Farm Bill conferee and the sponsor of Senator McConnell’s hemp provision in the House of Representatives, also signed the Farm Bill Conference Report.

Senator McConnell’s measure legalizes hemp as an agricultural commodity by removing it from the federal list of controlled substances. It also gives states the opportunity to become the primary regulators of hemp production, allows hemp researchers to apply for competitive federal grants from the U.S. Department of Agriculture, and makes hemp eligible for crop insurance. This measure builds upon the hemp pilot programs, which Senator McConnell secured in the 2014 Farm Bill.

“Last year alone, Kentucky hemp recorded more than $16 million in product sales through the state pilot program I previously secured, demonstrating that hemp holds great potential for the future of Kentucky agriculture,” said Senator McConnell. “My Hemp Farming Act as included in the Farm Bill will not only legalize domestic hemp, but it will also allow state departments of agriculture to be responsible for its oversight. In Kentucky, that means that Commissioner Ryan Quarles, another champion of hemp, will be able to help farmers thrive. When the Senate votes on this legislation in the coming days, we will also be voting to give farmers throughout the country the chance to tap into hemp’s potential and take part in its future.”

“When I was elected Commissioner of Agriculture, I promised to take Kentucky’s hemp program to the next level and establish our state as the epicenter of the industry in the United States,” said Commissioner of Agriculture Ryan Quarles. “This Farm Bill helps achieve that goal, and demonstrates that hemp is no longer a novelty but a serious crop that will unleash economic opportunity for our farmers. We would not be here today without the unwavering support of Senate Majority Leader Mitch McConnell and our congressional delegation.”

In collaboration with agriculture leaders in Kentucky and throughout the nation, Senator McConnell utilized his position as Senate Majority Leader to secure language in the 2014 Farm Bill to authorize hemp research pilot programs. He built on that success with federal legislation to ensure that hemp produced from the pilot programs could be transported, processed, and marketed. Under the guidance of Kentucky Agriculture Commissioner Quarles and his predecessor, now-U.S. Representative Comer, these programs have allowed Kentucky farmers to both research the plant and to demonstrate its full potential.

“Without Senator McConnell’s leadership on the 2018 Farm Bill and the Hemp Language, it would not have gotten this far. I am grateful that the Majority Leader found this issue so important that he appointed himself as a Farm Bill conferee to ensure his bill to legalize hemp will become a reality. As a Kentucky hemp farmer and processor, it is very important to me that Congress passes this bill and sends it to the President’s desk,” said Brian Furnish, Director of Farming & Global Production at Ananda Hemp in Cynthiana, Kentucky.

“We appreciate Senator McConnell’s unwavering support and leadership on behalf of hemp in Congress. By securing hemp legalization in the Farm Bill, Kentuckians can feel confident in the future of hemp and fully embrace its potential as an agricultural crop. This will open a vast amount of new opportunities for farmers, processors, retailers, and entrepreneurs like us here in Kentucky and nationwide,” said Alyssa Erickson, Co-founder of Kentucky Hempsters.

The Farm Bill Conference Report is expected to be approved by the U.S. Senate and House of Representatives in the coming days; it will then be sent to President Donald Trump for his signature. In addition to the hemp measure, the Farm Bill strengthens the safety measures that directly help commodity producers as they confront low prices, volatile markets, and the constant threat of natural disasters. It also seizes on a number of opportunities to invest in the future of American agriculture and rural communities by expanding rural broadband, enhancing water infrastructure, and continuing the fight against the opioid epidemic that is devastating rural America.

According the 2017 processor production reports: Kentucky licensed processors paid Kentucky growers $7.5 million for harvested hemp. Additionally, Industrial Hemp Research Pilot Program processor licensees reported $25.6 million in capital improvements and investments and $16.7 million in gross product sales. In 2017, more than 3,200 acres of hemp were being grown across Kentucky.

Senator McConnell and Commissioner Quarles Announce Hemp Legislation

KENTUCKY: U.S. Senate Majority Leader Mitch McConnell (R-KY) and Kentucky Commissioner of Agriculture Ryan Quarles (R-KY) announced today the impending introduction of legislation in the United States Senate to support Kentucky’s hemp industry. The Hemp Farming Act of 2018 will legalize hemp as an agricultural commodity and remove it from the list of controlled substances.

Senator McConnell took the first step to support hemp in 2014 by using his leadership position in the Senate to spearhead a provision to legalize hemp pilot programs in the Farm Bill. Since then, the research has shown the potential of hemp as an agricultural commodity.

“Hemp has played a foundational role in Kentucky’s agricultural heritage, and I believe that it can be an important part of our future,” Senator McConnell said. “I am grateful to join our Agriculture Commissioner Ryan Quarles in this effort. He and his predecessor, Jamie Comer, have been real champions for the research and development of industrial hemp in the Commonwealth. The work of Commissioner Quarles here in Kentucky has become a nationwide example for the right way to cultivate hemp. I am proud to stand here with him today, because I believe that we are ready to take the next step and build upon the successes we’ve seen with Kentucky’s hemp pilot program.”

“Here in Kentucky, we have built the best Industrial Hemp Research Pilot Program in the country and have established a model for how other states can do the same with buy-in from growers, processors, and law enforcement,” Commissioner Quarles said. “I want to thank Leader McConnell for introducing this legislation which allows us to harness the economic viability of this crop and presents the best opportunity to put hemp on a path to commercialization.”

The Hemp Farming Act of 2018 will help Kentucky enhance its position as the leading state on hemp production. It builds upon the success we have seen through the hemp pilot programs by allowing states to be the primary regulators of hemp, if the U.S. Department of Agriculture approves their implementation plan. This legislation also will remove the federal barriers in place that have stifled the industry, which will help expand the domestic production of hemp. It will also give hemp researchers the chance to apply for competitive federal grants from the U.S. Department of Agriculture – allowing them to continue their impressive work with the support of federal research dollars.

Senator McConnell plans to introduce the bill in the Senate, with Senator Rand Paul and a bipartisan group of members, following this state work period.

Hemp Industries Association Responds To DEA Final Rule Regarding ‘Marijuana Extracts’

DISTRICT OF COLUMBIA:  The Hemp Industries Association (HIA), the leading non-profit trade association consisting of hundreds of hemp businesses, has issued its position in response to a recent DEA ruling, submitted to the Federal Register December 14, 2016, which seeks to establish a new drug code for ‘marijuana extract.’ Specifically, the DEA has proposed that CBD, and all cannabinoids derived from Cannabis Sativa L. qualify as ‘marijuana extracts,’ and require separate, distinct identification and tracking by DEA agents than other forms of ‘marijuana.’ However, the DEA maintains the contradictory assertion that all CBD products are illegal as they constitute ‘marijuana’ per the Controlled Substances Act, and will therefore “continue to be treated as Schedule I substances.”  Complete Ruling.

It is the position of the Hemp Industries Association that this Final Rule regarding ‘marijuana extracts’ is not within the jurisdiction of the DEA to enact, as the administration itself cannot amend or augment the definitions put forth in the Controlled Substances Act (CSA). Adding CBD products to the federal schedule of controlled substances would require new legislation to pass in Congress or action taken by the Attorney General, amending the CSA. Additionally, the ruling is based on an incorrect and incomplete understanding of how CBD is derived from the cannabis plant. While CBD may be derived from forms of cannabis that contain high amounts of THC, the cannabinoid associated with ‘marijuana,’ CBD may also be produced from industrial hemp plants that meet the legal standards of less than 0.3% THC by dry weight, and which may be cultivated in 32 states in the U.S. per Sec. 7606 of the Farm Bill, the Legitimacy of Industrial Hemp Research amendment. Hence, not all CBD products may be classified as extracts from ‘marijuana.’

“It’s important to understand that this Final Rule does not change the legal status of hemp derived CBD,” said Eric Steenstra, Executive Director of the Hemp Industries Association. “Cannabidiol is not listed on the federal schedule of controlled substances, and the DEA has no authority whatsoever to impede the production, processing or sale of hemp products, including CBD products, grown under the Farm Bill. We urge consumers and businesses not to panic, and continue supporting the growth of the hemp industry in the U.S.”

Generally, the HIA maintains that CBD products should be legally defined as supplements, not drugs or pharmaceuticals subject to DEA control. The CBD industry is one of the fastest growing sectors of the emerging hemp market in the U.S., and indeed worldwide. This DEA Final Rule is concerning to the industry, as it creates confusion in the marketplace among consumers and legitimate businesses alike, and may potentially result in federal agencies improperly treating legal products such as CBD oils, body balms and supplements as controlled substances. The Hemp Industries Association is monitoring this development closely, and is strongly considering legal action to protect the interests of its members and the hemp industry as a whole.

Tennessee Effectively Nullifies Federal Hemp Ban

TENNESSEE:  Yesterday, the Tennessee General Assembly took the final necessary steps to send legislation to Governor Haslam, which if signed, will nullify the federal ban on hemp.

House Bill 2445, introduced by Rep. Jeremy Faison (R-Cosby), would mandate that the state authorize the growing and production of industrial hemp within Tennessee, effectively nullifying the unconstitutional federal ban on the same. Senator Frank Niceley (R-Strawberry Plains) is the chief Senate sponsor of the legislation.

Local media point to federal law citing hemp production is still banned on the federal level, and that the Tennessee legislation will only set Tennessee up to begin cultivation once the feds change the law. However, the legislation makes no such stipulation with regards to waiting on the feds.

Hawaii Legislature Approves Two-Year Study of Hemp

HAWAII:  State lawmakers as we speak accredited a toned-down bill authorizing the College of Hawaii’s school of agriculture to conduct a two-yr research of hemp.

Senate Invoice 2175 stated the analysis will concentrate on the potential use of hemp as a biofuel feedstock and to be used in phytoremediation, the use of crops to take away contaminants from soil.

The motion was made attainable by the passage earlier this yr of the federal Agriculture Act of 2014, which authorizes states and universities to legally conduct hemp analysis.

In accordance with the bill, the plant inventory for use within the research have to be licensed by the state Division of Agriculture as industrial hemp, versus marijuana, its psychoactive cousin.

Indiana Bill Advances To Legalize Pot’s Less Potent Cousin: Hemp

INDIANA:  Gregg Baumbaugh has 4,000 pounds of cannabis sitting in his automobile parts manufacturing plant. It wasn’t illegal for him to import it, but it’s against the law for Indiana farmers to grow the variety of cannabis he buys in bulk. Baumbaugh wants to see that changed.

The “weed” he uses to make the insides of interior doors and armrests at his Elkhart County facility doesn’t have enough of the psychoactive ingredient THC to give anyone a marijuana mind-altering high.“If somebody smokes the stuff we import, the only thing they’re going to get is a nasty headache,” said Baumbaugh, CEO of FlexForm. [Read more…]

Hemp’s Future In Indiana Raises Doubts

INDIANA:  More than 50 years after America started eradicating it, hemp might be coming to a field near you.

An Indiana Senate committee has given its approval, which has thrilled advocates of the new crop.

What remains to be seen is whether Indiana farmers will be willing to plant the crop.

Supporters make hemp, which is the cousin of marijuana but contains little of the psychoactive chemical in marijuana, sound like a wonder crop. It can be used to produce products as varied as hemp seed, hemp oil, cloth and energy-producing biomass, about 25,000 different products in all. [Read more…]

Marijuana Farmers Unlikely To See Farm Tax Perks

COLORADO:   Marijuana farmers and agricultural tax breaks are the next wrinkle facing the states that have legal weed as lawmakers debate how to tax the product while it’s growing.

Legislatures in both Colorado and Washington are taking a look at pot farmers this session. [Read more…]