Hemp Farm Bill Winners and Losers

The 2018 Farm Bill (“FB18”) in December descheduled hemp Cannabis at the federal level, turning regulation over to USDA, which is delegating it to the states.

As passed it only legalized growing it and its fiber, but also banned drug felons from low-THC drug-free industrial hemp. Surprisingly, an hour after Trump signed it, the FDA Commissioner announced granting hemp food and oil Generally Recognized As Safe (GRAS) status (thus no longer “adulterants” to FDA), leaving only Cannabidiol (CBD) from hemp in a regulatory limbo.

Here are the Hemp Winners and the Losers in FB18:

Winners

Hemp food. GRAS status was the Holy Grail for hemp foods companies, and Manitoba Harvest got it done for the benefit of all. Since it applies to all products in the industry it really should have been a hemp association initiative decades ago, but instead it took a minor division of a public conglomerate to finally do the right thing. FB18 allows for a maximum THC level of 3,000 ppm in hemp foods and other hemp products, which is 300 times higher than the (unenforced) 10 ppm max THC in Canada. Notice the FDA application refers to it by its proper term, “hempseed oil.” Labeling hempseed oil as “hemp oil” is misbranding, but everyone gets away with it.

Viable cannabis seed. Since hempseed before FB18 was still a Schedule 1 Controlled Substance thus necessitating a license from DEA to transport it interstate, legalizing it in FB18 was huge. Especially if a DEA permit is no longer needed to import, allowing farmers to import certified seed directly. State agriculture departments certifying the provenance of a cultivar no longer have to look the other way. And since a marijuana seed generally can’t be discerned from a hempseed, who’s to know which is which?

USDA. With the proper agency now spearheading it, USDA is poised to continue the brilliant legacy of USDA Agronomist Dr Lyster Dewey. Crop insurance, subsidies, advice, water issues; USDA has the potential to rise to the occasion and Make America (Hemp) Great Again. Perhaps the US will own dozens of hemp mills again? Or it can completely mess up and, say, demand “0.0% max THC.”

Judiciary Committee Chair Charles (Chuck) Grassley (R-IA). To get Agriculture Committee Chair Mitch McConnell’s low-THC drug-free industrial hemp provisions in the Farm Bill past the Judiciary committee, it appears Chuck was determined to screw someone, anyone. Therefore rolling over on only drug felons was that unfortunate compromise McConnell was willing to give up. It was the low-hanging fruit, and Chuck went for it.

DEA. Few realize that in 2001 DEA attempted to legalize all hemp products, and take hemp off their plate. That Interpretive Rule was in response to a request by HIA to rule on the legality of hemp products, and although it was extremely favorable for hemp, nevertheless HIA sued DEA for it. Yes, DEA was set-up then ambushed by hempsters, which is why they were such hard-asses ever since to us. Now with FB18, DEA can focus on milking every last dollar out of the last vestiges of a war on drugs gone horribly wrong. While opiates kill dozens daily, DEA will continue to target patient and personal pot grows which kill no one as we’ve seen in Colorado and elsewhere, easy money with little danger. They’ll combine it with the prosecutor’s New Normal: seize all assets but file no charges. That gives no possibility of jury nullification, no appellate or SCOTUS review of an unconstitutional and wildly-unpopular law, it saves the cost of prosecution and brings money into the government’s treasury. Then the Sword of Damocles hanging over the heads of the growers for 3 years silences their activism.

Congress. Millionaire lawyers saw fit to demand 0.3% max THC, instead of just letting USDA do its job. In the future, the global max THC will settle next at 1%. Those nations under that will hurt their farmers, those above it won’t.

Biotech companies. Is USDA going to mandate use of Gencanna’s new 0% THC hemp cultivar? Is it GMO (dead THCAS)? Is it nil cannabinoids (Type 5)? Will it still require THC testing in the field, thus losing it’s competitive advantage? Will it be certified by AOSCA? What exactly does “0% THC” mean, since even inside the seed we can find parts-per-billion? Will the hemp association kick-out Gencanna for daring to offer “no THC” products to the world, like it did others in the past? One can’t do big agriculture today today without catering to Big Ag. Hemp Rountable’s Hemp Farming Alliance appears to be associated with an energy and biotech company. And California’s Prop 64/AUMA hemp provisions make GMO Cannabis under the guise of the hemp program extremely easy.

Fiber hemp. Privately, fiber hempsters have told me they were fine with throwing CBD hemp under the bus to get fiber legal. Well, they succeeded. Despite being the most difficult from an investment perspective for infrastructure, and the least profitable, the rarest fiber, and the least-important value driver for hemp worldwide, they got their precious fiber legal at the expense of the least-expensive infrastructure, most-profitable, and leading value-driver for hemp worldwide (CBD). Congrats?

States within tropical nations. They can now point to the US federal government delegating industrial hemp to the states, using the USDA in a supportive role like it was for decades. With 1% max THC and a few willing state governments, some sub- and tropical nations could hand Europe its 0.2% max THC lunch. Even EIHA arguing for 0.3% but still using certified is not helpful when one looks at the stunning success of hemp in Switzerland, growing proprietary cultivars at 1% max THC, in greenhouses for the smoking market. The other hemp success, Colorado, was due to an early “states rights” approach to the issue, growing before the 2014 Farm Bill (FB14) was even conceived. In a world of 1% max THC the days of 0.2% and 0.3% are numbered.

Universities. Professors in the Cannabis Closet for years due to 82 years of racist and unconstitutional federal war on a plant, thus professionally “knowing nothing” about marijuana but looking over their shoulders the whole time, will now have a reason to come out of the closet. Even CSU in Colorado took a year to agree to do hemp projects, after legalization there in 2012. But Florida wanting to breed with Canadian certified cultivars shows just how badly wrong it can go.

Opportunists, grifters, and hustlers. The trickle of interest in hemp before the FB18 has turned into a torrential tsunami. I am amazed how much interest there is today, hence this The Richard Rose Report. But all that interest is triggering a free-for-all among new “hemp consultants” and others jumping on the bandwagon. Expect the little bit of fraud and misrepresentation we’ve seen the last few years to become way worse, way fast. Despite entire Facebook Groups dedicated to outing individual con-artists and proud liars, people still use them daily. Remember, it’s “Due Diligence,” not “Dude Negligence.” Opportunism and hustlers are not limited to the private sector: the state of Georgia wanted $100,000 per hemp processor, only 3 permits be issued, and no refunds to those applying but not selected.

Regulatory Capture. Just wait you’ll see: certain companies will own the sector, for better or worse, and the various state and federal governments will help them. One of the large seed companies has the most to gain, maybe some labs, and tons of compliance tech.

Cops and law firms. Recent seizures and arrests in Idaho and Oklahoma for transporting legal hemp reveal just how clueless local LEOs are, reluctant to give up their 82-year gravy train. “I smelled marijuana” is the oldest trick in the local cop’s book, and allows for a complete search of anyone’s car or person or body cavities, anywhere, any time, for any reason. That won’t to go away without a fight. In marijuana-legal states, we’ve even seen enforcement and narc budgets actually increase, not decrease. Expect the same for hemp. Incarceration is so old school, it’s now all about regulatory compliance, and it’s creating entire new compliance industries, in bed with the state and ultimately also the licensee.

FDA. While mostly relegated to the sidelines in hemp regulation in the past, it now has CBD in its cross-hairs after allowing GRAS status for the other hemp flower products. But it acknowledges it is on weak ground, couching seemingly-legal new law pronouncements with words like “based on available evidence.”

Tribes, and territories. Totally left out of the 2014 Farm Bill (FB14), they were included this time, although they had to give up sovereignty to the states and USDA to get it.

Delta-8 Tetrahydrocannabinol. Congress defines hemp by THC levels in the FB18, in this case delta-9 THC. But not delta-8, total THC, or CBD. THCa gets the Honorable Mention, as most of the THC in raw hemp is that acid form.

The “Suits.” While the hemp industry was started by Stoners, in the late-90s the Suits took over. FB18 was proof of the rising hegemony of the Suits, cool with throwing the Stoners (non-violent drug felons) to the side of the road to get just fiber and growing legal. Despite the Hemp Industries Association (HIA) having been started by a pot felon, a far-better bill sponsored by Senator Rand Paul every session since 2005 thus should have been passed under early Obama years, and McConnell promising it wouldn’t be in the reconciled FB18, nevertheless there it was. Score one for Senator Grassley and the die-hard Prohibitionists. Dividing us further by specifically excluding drug (the vast majority are marijuana) felons was a brilliant middle-finger to the hemp community, an easy give.

State CSAs. Except in Washington, each state has it’s own version of the Controlled Substances Act (CSA), and Cannabis in some form is Schedule 1 in them. No state has actually removed it from its CSA even when legalizing hemp, that’s their ace up their sleeve if they ever want to crack down, or stop banking, seize houses or trucks, or whatever. I don’t expect that to change until the Feds deschedule, if even then. Only Carl Olsen is attacking this “oversight”.

Lobbyists. Welcome to the Gravy Train, please buckle up. You will now be needed in 50 states and more tribes, not just a few. The lobbyists for Monsanto and Dow Biosciences are already pressing their client’s interests in a hemp programs, and infiltrating hemp farming groups. “Legalizing hemp” became a full-employment act for you and lawyers.

U.S. Hemp Roundtable (HRT). With a Minimum Viable Product, a metric for success of “anything,” and the lure of selling $25,000 Board seats and $5,000 votes, HRT recently stepped in, stepped up, and is now claiming the credit. Considering the lack of action by the other organizations, it is not a wholly-undeserved claim. That Minimum Viable Product was fiber only, no pot felons, close coordination with back-room politicians, denial of the 10th Amendment, and let Congress set the max THC not USDA. Dividing the industry was just lagniappe. HIA’s recent partnership with HRT was a very public repudiation of Vote Hemp, HIA’s sister company missing in action for years. Ironically, Vote Hemp’s $90,000 to Frost, Brown Todd LLC in 2016 may have seeded the birth of HRT, born from that same lobbying office.

PTO. Now that Hemp legality is understood, expect the Patent and Trademark Office to be better about allowing patents and trademarks on what was previously a Schedule 1 plant. Although hemp trademarks were never an issue until CBD.

Real associations. With “legal” hemp, there’s no need for hemp associations. Thus, the obvious one to join if you must join one is either one like American Herbal Products Association (AHPA) if you already know what you are doing, or the American Hemp Association (AHA) or the Global Hemp Organization (GHO) if you need advice on farming. Or a million and one associations dedicated to your niche, whether natural products or body care or supplements or fragrances or oils or foods or building materials or fuels or plastics.

Prohibitionists, 1. Senator Grassley, chair of the Senate judicial committee, had to sign off on this Agriculture bill. So he did the only thing plausible for him to do monkey-wrench it: ban felons from state hemp programs. But not just any felons; not baby killers, mother rapers, or father robbers, just drug felons in the last 10 years, not already covered by a 7606-compliant state hemp program. And since most drug felonies are for marijuana, it mostly affects marijuana growers, importers, retailers, and distributors, and mostly minorities and poor people, and many caregivers and the mentally ill. Which might be the dumbest thing to do unless you actually intended to divide and slow an emerging Cannabis industry. A fledgling hemp industry will them, and the person has already “paid their debt to society.” For instance, in Georgia 15% of citizens are felons. And since drug crime enforcement and prosecution fell heaviest on the minority population, banning only drug felons from hemp is just continuing the 82-year racist legacy of Prohibition, not ending it. Instead, felons should be given rehabilitation programs growing hemp, not banned from the industry altogether. Despite the Hemp Industries Association (HIA) being started by a pot felon, and a far-better bill sponsored by Senator Paul every session since 2005 (thus should have been passed under early Obama years) silent on felons, and McConnell promising it wouldn’t be in the reconciled FB18, nevertheless there it was. Score one for Senator Grassley and the die-hard Prohibitionists, dividing us further. That the minority and diversity community isn’t up in arms over this obvious poke at them is unusual. In response, each state has a duty to include all its citizens in this agricultural opportunity afforded all others. One way is to pardon/expunge/commute all Cannabis crimes. One workaround to this unfair provision is to incorporate your farm, then the corporation is applying for the hemp permit, not the felon.

Prohibitionists, 2. If one can still go to jail, it’s not legal. As we see with the recent seizures and arrests in Idaho and Oklahoma despite laws legalizing it, hemp still isn’t legal. Nor will it be in any other state if you make a technical violation in your application. In the WV case recently prosecuted, they merely got the GPS coordinates wrong.

The Second Amendment. Now that hemp is off the Schedule, hemp farmers can legally possess firearms. Not so much for caregivers and patients growing in marijuana-legal states.

Banking. It never was actually illegal to bank hemp companies, the banks just couldn’t make enough on us to justify any possible fine in the unlikely event their auditors fined them. But Cartels are different matter, the fine on those violations is but 0.5% of profits. That’s why Cartels get private bankers but those educating on hemp can’t even open a bank account.

The Movement. We FINALLY got a win, eh? Now let’s mobilize this momentum to get all Cannabis off Schedule 1, after 82 years of racist unconstitutionality and the least-popular law in US history, with 90% public support for our side. Then off the state Schedules, then out of the UN’s SCND. It’s not yet truly legal anywhere yet, not even Canada and Uruguay. Now is not the time to pay ourselves on the back. It’s just step number 2 of a marathon.

Losers

Canada. Now its biggest customer will become its biggest competitor, unless the states or USDA step in to save them like the associations and lobbyists have for years. Will hempseed trigger the next Trade War?

CBD. States are only post-FB18 cracking down on CBD products, pursuant to a narrow and flawed FDA position. FDA says CBD can’t be in a food or dietary supplement solely because GW Pharmaceuticals filed a Investigative New Drug (IND) application. However, that position is at odds with facts: 1) CBD (and THC) have been sold for years before GW’s application in various legal products including dietary supplements, foods, hempseed oil, and patent medicines. Among others, Jason Cranford marketed a legal (in Colorado) CBD product in 2010. 2) FDA has a pending list of pre-DSHEA ingredients to announce, and a case for 12,000 years of safe and continuous human and animal consumption of cannabinoids was made in one submission. (Resin containing trace amounts of CBD and THC in the resin adhering to the outside of the hempseed shells.) 3) There are many precedents of a substance being a food, a dietary supplement, and a drug, much like hemp flower products containing CBD. 4) The GRAS status was for products FDA absolutely knew often contained as much as 117 ppm THC (thus at least 2,340 ppm CBD, or 0.234%). Thus one could argue CBD (and THC) are also GRAS.

Kentucky Senators. Senator Mitch McConnell couldn’t deliver what he promised (no ban on felons), and threw shade on fellow Kentucky Senator Rand Paul by never once mentioning him, only Rep. James Comer. Despite Paul sponsoring the Industrial Hemp Act literally every session since 2005, but apparently getting zero love from hempsters for it.

Disciples of Jack Herer. Those seeking justice for the plant, and true disciples of Jack are not happy with pot felons thrown under the bus to get fiber legal. That sound you hear is him screaming from the grave.

USDA. Congress took the power to set THC levels in hemp away from USDA, the industry’s single-biggest obstacle and issue to manage. In a future world of 1% max THC, it’ll be up to Congress to keep US hemp farmers competitive in a global market.

Felons. Well, sort of… only drug felons, in the last 10 years, and not in previously-compliant 7606 states, or subject to a MOU with an institution. They actually went out of their way to create four distinct classes of only drug felons. Ironically, it affects only people, which means not corporations, which hurts only “the little guy” trying to rehabilitate his/her life after paying their “debt to society,” cruel term especially when applied to just growing Cannabis. That the media trumpets the good and ignores the bad in its own echo chamber doesn’t change the cruelty of banning them from hemp. That segment includes many infamous names in the Cannabis industry, such as talented high-THC hemp (usually called marijuana) growers, high-THC hemp importers good at international logistics, and even more high-THC hemp street retailers and wholesale distributors. Ironically, those are the very skills recruited in hemp- and marijuana-legal states, especially for large and public companies. The 10-year ban on drug felons (not any other felony whatsoever) falls heavy on minorities, poor people, patients, caregivers, and the mentally ill.

The Tenth Amendment. Most states have no idea what to do about foods and artisanal products with safe-nonintoxicating-CBD-that-everyone-wants-but-it’s-from-Cannabis, so they all look to FDA. While there are legal workarounds to add CBD but not “add CBD,” it’s unfortunate the other states haven’t formally legalized hemp foods and other products at the state level, leaving it a grey area, especially now that FDA approved as GRAS hempseed for food, hempseed oil, and hemp protein, as did Colorado, Texas, and Indiana.

Farmers. The explosion of interest in hemp is phenomenal. However, it is also mostly ill-informed and unprepared, subject to seed sellers and consultants who know precious more than them.

Gas Chromatrography (GC). FB18 allows GC, but any other “procedure for testing, using post-decarboxylation or other similarly reliable methods, delta-9 tetrahydrocannabinol concentration levels.” One similarly reliable method is High Pressure Liquid Chromatography (HPLC), but the results between the two are markedly different. In FB18 Congress specified only <0.3% Delta-9 THC, which is mostly created when using GC but not HPLC. The difference could be substantial, say 0.4% Delta-9 THC versus 0.1%. It is a gift, so expect them to take it away as is the custom, in whatever “hemp fix-it” bill they concoct.

The 2019 Season. Now months late approving even the first application, USDA has admitted they aren’t ready yet. The weeks-long shutdown undoubtedly impacted it. Unless you have money to throw away, I suggest sitting out 2019 and figure out what to plant come 2020. Hemp isn’t for everyone… yet. My goal is for it to be as normalized in society and agriculture as corn or zucchini, but we are nowhere near that yet. Look around and learn from others’ 2019 mistakes.

Big Pharma. Since things are easier to control when in turmoil, Big Pharma could leverage the past perception of the legality of CBD to its benefit. Now that at least the hemp farming issues are settled, we can all work to free CBD from unnecessary over-regulation designed to help Big Pharma. Luckily, intRAstate artisanal CBD products will always be around, outside the reach of federal FDA.

Hemp associations. With legality comes irrelevance, as NORML knows so well. Organizations dedicated to legalizing will now pivot to trying to stay relevant. With no reason for cheerleaders to exist post-FB18, can a lobbyist really show farmers how to farm hemp? Time will tell, but it’s not looking good so far. Certification schemes appear to be one tactic, as is partnering with a company or association with a scientific mission, giving the needed halo effect.

CIA. Few realize the CIA has had a hand in hemp for the last twenty years, but they could only hold back the dam so long. That, and investors in Canadian hemp.

Colorado. With Amendment X, Colorado gave up its 10th Amendment right embedded in the state Constitution to regulate hemp and handed it over to Congress. Who knows if Congress or USDA will someday listen to Monsanto or whomever and change max THC for hemp to 0.0%?

Pot felons. Fairness dictates automatic expungement, clemency, commutation, and/or pardons for past marijuana felonies and misdemeanors, a rehabilitation program at USDA to teach pot felons to how grow and process hemp, and state laws allowing pot felons in be in hemp (many state programs also ban them). Others are doing the same thing today with permission from the state, and the industry needs their talents. Ironically, many of the activists who helped advocate legality for decades are pot felons, so perhaps it’s pay-back?

Truckers. As we’ve seen recently in Oklahoma and Idaho, despite an express provision in FB18 protecting interstate transportation of hemp products, including viable seed, resin, and flowers, local cops beg to differ. Even admitting it is legal hemp, they intend to forfeit (steal) the truck and contents and deport the driver.

Linguistics. People refer to hemp as “legal,” however it is now the most-heavily regulated USDA crop in America, as well as one of its smallest. We had to give up felon marijuana growers and sellers to do it, the states and USDA have tight control over whatever happens, and can demand any wild thing and get it. Make a technical mistake on your application, and your entire field is legally considered marijuana; more than 1,000 plants can be life in prison (there are 392,040 plants/acre at 4×4 inches). So realize this is only the inevitable transition period we were all waiting for. It is not the destination, but just step 2 of a marathon which will last as long as it takes to actually regulate like zucchini. If you can go to jail for a plant, then it’s not yet legal, just slightly-less regulated than before. You know, like banks, energy industries, and many other industries enjoy.

Justice. We still need “our XXIst Amendment,” “our DSHEA.” Legalizing hemp via the last page of a 840-page Farm Bill is an inglorious end to part of the country’s least-popular, most-racist, and longest-unconstitutional law (Schedule 1). No pot felons, no CBD, no clear legality… this is not the “legalization” we worked decades for. Burying the descheduling on page 840 page sends an implicit message to cops that Congress didn’t really mean it. Laws constraining the government have to be written so plainly even local cops can understand them, as we saw recently in some states.

Smokable hemp. States are banning hemp for smoking. Why? Because they fear losing even one cent of tobacco tax to it. While “smokable hemp” was always considered an oxymoron, the advent of resinous varieties of hemp which happen to be very low in THC has created a new opportunity for hemp, as a non-tobacco tobacco replacer. Despite the massive positive public health implications of reducing tobacco and nicotine consumption with a healthier alternative, the only thing that has state legislators saying NO to is smokable hemp. Nobacco and Not-Pot are two brands of that style of product.

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Please credit “Richard Rose of ‘The Richard Rose Report.'” https://therichardrosereport.com