Is CBD Federally Legal in the United States?

On December 20 last year, President Donald Trump officially signed the Agricultural Improvement Act of 2018, called the 2018 Farm Bill. It presents a dramatic turn in federal hemp policy, since it includes some provisions concerning cannabis. Specifically, it legalizes hemp cultivation and the sale of hemp-derived products, which do contain small quantities of psychoactive tetrahydrocannabinol, or THC.

However, this legalization is quite tricky, since it comes with a few notable regulatory restrictions. Furthermore, state and federal challenges pertaining to the growth of hemp and sale of its products still exist. Despite this, the 2018 Farm Bill shows a remarkable change in federal attitude toward cannabis, making it the first step to possible legalization of cannabis in all its forms sometime in the future.


Marijuana vs. Hemp


Although from the same cannabis family, marijuana and hemp have one significant difference: They contain different concentrations of THC. Marijuana plants typically have THC levels that exceed 15 percent, enough to make users “high,” whereas hemp contains less than 0.3 percent THC, too low to have any psychoactive effect. Marijuana makes you stoned; hemp does not.

Other countries have been cultivating hemp for various industrial applications and, increasingly, to make cannabidiol, or CBD, products for the health, wellness, and nutritional markets. Since the United States classified all forms of cannabis as marijuana under the Controlled Substances Act, growing it was, until now, illegal at the federal level, even if some states have liberal policies toward it.


Understanding the 2018 Farm Bill


The 2014 Farm Bill came with notable legal grey areas. The 2018 Farm Bill fills in these gaps and clarifies hemp and its derivatives as legal. It passed in both the House and the Senate by a wide bipartisan majority. The bill itself is a huge document, 641 pages, and only includes a few provisions for hemp, buried under others that address crop exports, conservation, insurance, rural development, food stamps, farm subsidies, animal health, organic and specialty crops, and help for emerging farmers.

Although the provisions set for hemp are incredibly concise, their implications are nonetheless huge.

The 2018 Farm Bill, under Section 12619, amends in two ways the Controlled Substances Act:

  • It changes the definition of marijuana to one that no longer includes hemp.
  • It lists THC as a Schedule I controlled substance, which effectively creates an exception for THC in hemp.

Hemp now has a broader definition in Section 10113 that it did previously under the 2014 Farm Bill. There is no longer any question that both hemp and any products derived from it are legal, provided the THC concentration does not exceed 0.3 percent. This includes any part of the hemp plant, as well as its seeds, extracts, derivatives, isomers, cannabinoids, salts, acids, and more, whether growing or not.

Under existing federal law, any plant or product that exceeds the legal 0.3 percent of THC permissible is still marijuana, and therefore still illegal. This legislation does not mean that farmers can suddenly grow hemp as a cash crop immediately, certainly not freely like they do tobacco, wheat, or corn. There exists significant red tape to contend with first.

Before farmers can grow hemp outside of a pilot program conducted by a state department of agriculture of a higher learning institute, the state where it will grow must first draft a plan to monitor and regulate its production, and then get the U.S. Department of Agriculture to approve it. In states that fail to create their own regulatory framework for hemp, the USDA will create a federal licensing scheme.

To get the USDA’s approval, states that do wish to grow hemp under their own regulatory plan must devise ways to maintain data about where hemp will grow. They must create laws for testing THC levels, procedures for the disposal of plants that exceed legal levels and violate federal law, and draft policies to ensure states will enforce federal hemp laws by taking necessary action where appropriate.


Challenges and Obstacles Remain


Although it legalizes the production and sale of hemp-derived CBD products, the 2018 Farm Bill fails to remove existing barriers to it. The U.S. Food and Drug Administration still regulate all cannabis and cannabis-derived products under the Federal Food, Drug, and Cosmetic Act. It treats these products as it does any others under its mandate.

In a recent statement, the FDA warned against marketing CBD products with claims of medical benefit without its approval. Companies can only market cannabis-derived products for use in diagnostics, mitigation, cure, treatment, or prevention of diseases, such as diabetes, cancer, and psychiatric issues, after passing the FDA’s drug approval process. Unsubstantiated claims violate its regulatory laws.

Furthermore, the FDA also cautions against marketing hemp-derived CBD or THC as a dietary supplement, calling it unlawful since both CBD and THC are active ingredients in FDA-approved drugs, and as such, were under clinical study prior to marketing as dietary or food supplements. In tempering that warning, it notes enforcement action for medical claims or products that threaten public health.

Additionally, the FDA is taking measures to examine the need for it to regulate the permissibility of using hemp-derived THC and CBD in dietary supplements. As with any product, hemp cultivators, manufacturers, distributors, and retailers with have to comply with state-controlled safety standards. Some will refer to federal regulations, but most have their own, which will not change with federal laws.

States with their own regulations have their own sets of rules. Companies involved with hemp will need to review if marijuana is a controlled substance in their state, if its definition excludes hemp, and if it lists THC itself as a controlled substance. A lot of responsibility will fall on businesses to comply with many rules and regulations, both at the state and federal levels, which is about as complicated as it gets.


Future of CBD Businesses


These same companies will also have to determine if states permit hemp cultivation but ban products made from it. If they only permit non-ingestible hemp products; if they only allow hemp for medical purposes; if they place restrictions on hemp imported from other states; if they require the registration of hemp products; and if they require licensing for all aspects of hemp business, from seed to sale.

Finally, in states that have legal marijuana laws for both medical and recreational uses, companies buying or selling hemp will need to determine if their products are subject to the same regulatory laws as THC-heavy marijuana. Yes, CBD is now legal at the federal level, but you can still get into trouble for it, depending if you source it from compliant businesses, and adhere to its many confusing regulations.

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