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Hemp Laws Explained with Vicente Sederberg LLC

Hemp Laws Explained with Vicente Sederberg LLC

The times, they are a changin’. So are the hemp laws.

The hemp economy is growing at a rapid rate. The Farm Bill, passed in 2018, has opened the floodgates for states to establish their own legal hemp programs. But it isn’t an easy transition.

Some states aren’t on board yet, and some still have laws on the books that criminalize hemp. People are trying to get into the CBD industry, but there is still very little regulation, and a lot of the hype around could be dangerous.

What Are The Hemp Laws?

Every state has different hemp laws for the most part. But now the federal government has legalized “industrial hemp” for commercial production, processing and interstate commerce, conflicting with a lot of states’ current laws.

Industrial hemp, as defined in the Farm Bill, is any part of the cannabis sativa plant with a THC percentage lower or equal to .3%. A lot of states already had a similar law at the state level, and similar to legal cannabis on the state level, federal government entities for the most part left them alone.

Other states had even more strict hemp laws. The states with stricter hemp laws compared to new federal law do not have to conform to the new federal law, because they are technically still within that law.

Colorado, which had a Constitutional amendment added that granted the right to grow hemp that was .3% THC, removed that amendment prior to the passing of the Farm Bill with a vote. This way, Colorado completely takes on the new federal definition of industrial hemp, with no chance of state-constitutional conflict should the regulations change on the federal level in the future.

The Hemp CBD Dilemma

In most major cities, there are more and more natural health stores popping up with CBD products. Other major chains like Whole Foods, CVS and Walgreens are adding CBD to their shelves. But what’s the actual regulation around CBD?

The FDA currently has no standing regulation surrounding CBD. While the Farm Bill changed the regulation surrounding industrial hemp, there were no changes made to food products, supplements and the like made from hemp. This has a big impact on CBD products.

Most states match the food and drug laws to the FDA’s regulations, but some states have made local changes to allow products like CBD, Kratom and others. A major conflict that has arose since the CBD market has begun to take off is the question of whether or not CBD is a medicine, or a supplement.

According to the FDA, a product that is regulated and labelled as a drug, cannot also be sold a food supplement. There have already been drugs made from CBD for epilepsy, and this is causing a stand still. This makes branding CBD products a challenge, with people coming up with new names for what really is just CBD oil.

Hemp oil, hemp seed oil, hemp extract, etc., are all product names you’ll see on the shelves at your local health store. The chances of seeing a product labelled with CBD in the name are slim right now.

This Week’s Episode

There is so much more to dive into with hemp and CBD laws in the new market of 2019, that writing it all here would be thousands and thousands of words. So why not hear it from people who have been studying hemp law for years?

Shaun Hauser and Andrew Livingston head the Hemp Division of Vicente Sederberg LLC. Vicente Sederberg is one of the most well-known and renowned cannabis law firms in the country, and they have an entire wing devoted to hemp laws.

In this week’s episode Andrew, Chip, Justin and Shaun talk about the new hemp laws, how it affects the states, the complications of the new CBD industry and more surrounding the legal hemp industry and the new laws surrounding it. Most lawyers would charge hundreds of dollars just for one hour of consultation on hemp laws.

In this week’s episode of The Real Dirt, we get it all. FOR FREE. Listen to the full episode now, and join the Real Dirt Facebook Group to share your thoughts on the episode!

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Inside The Alabama Hemp Industry

Inside The Alabama Hemp Industry

Hemp is legal in Alabama…and everywhere else in the US. But that doesn’t mean all the laws are the same.

The 2018 Farm Bill federally legalized industrial hemp, opening up a brand new marketplace for interstate commerce with federal regulation. This is a huge step for hemp and cannabis (since they are the same thing), but the bill isn’t perfect.

One unique aspect of the bill is that it gives states a year from its passing (December 2018) to either draft their own industrial hemp laws that still fit within federal regulation, or get rid of any hemp laws they currently have, and accept the new federal regulation as their own.

While states like Colorado — that had an amendment to its constitution allowing for the production of industrial hemp — voted to remove the amendment from the constitution to avoid any backlash from federal government, others still have hemp laws on the books.

Alabama is one of them.

Hemp Laws in Alabama

To get the most accurate description of Alabama’s new laws, the best place to go is the Alabama Department of Agriculture and Industries.

Hemp is now deemed an agricultural commodity and is no longer classified as a controlled substance in the US, and in turn, Alabama. It is important for the public to understand that hemp is not legal to grow or process in Alabama until a plan is developed and approved by the United States Secretary of Agriculture.

The USDA will require participating states to include information on applicants, testing procedures, inspection of growing/processing facilities and disposal procedures. The Alabama Department of Agriculture and Industries (ADAI) will work in consultation with the Governor’s office, the Attorney General’s office and law enforcement agencies to create a plan of action regarding statewide regulation.

So, while hemp is federally legal and Alabama is not fighting that, the state is still setting up its legal industry. At the time of this writing (April 2019), Alabama will have already closed its application window for growers, processors and distributors.

Over 180 farmers have been approved, with some 60 processors in addition.

This Week’s Episode of The Real Dirt

One such person that was able to obtain a farming license for industrial hemp in Alabama was Brett Terry. A longtime friend of Chip’s, Brett works with Front Range Biosciences in Boulder, Colorado.

Front Range Bio is working to rapidly advance the growth methods and techniques for cannabis and industrial hemp, from cleaner farming practices to cell cultures. Originally from Alabama, Brett saw the massive market potential for hemp in the state.

As a strong agricultural provider for the country, Alabama is packed with farmers looking for new opportunity. While those that didn’t meet the March 1st deadline must now wait until October to apply for licensing, Brett is already getting started.

Hear Brett’s story and what he’s experienced so far in Alabama’s legal hemp industry in this episode of The Real Dirt Podcast.

Join our private Facebook Group for conversations with other ganjapreneurs and cannabis updates you won’t get anywhere else!

And join our new Real Dirt Alabama Group for exclusive Alabama hemp news, tips and more.

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Getting Started in Legal Hemp

Getting Started in Legal Hemp

Since the passing of the Farm Bill in 2018, Mike Leago and the International Hemp Exchange have been getting calls non-stop.

A whole new world is opening up in the industry of legal hemp, and almost everybody is trying to get involved. However most people don’t know the next steps past the application process.

The International Hemp Exchange (iHempX) was around well before legalization. They operated only within states that had legal hemp laws on the books prior to federal legalization, like Oregon and Colorado. This gave Mike and iHempX a big head start in the industry.

Getting Started in Legal Hemp

A lot of people trying to enter the legal hemp industry are farmers already. While a good portion of them are cannabis growers, a just as large portion are your everyday, traditional farmers.

Hemp was a million dollar crop in the early 1900s, and a lot of states have had hemp initiatives enacted specifically to promote farming in the past, despite federal law placing hemp on the banned substances list up until December 2018. Now that legal hemp is becoming widespread with the ability to trade across state lines, farmers are getting back into hemp.

What iHempX does is help these farmers get started. There hasn’t been readily available information on hemp and growing practices due to its legality, which makes iHempX a go-to source for new hemp farmers.

farmers are entering the legal hemp industry

A farmer in his hemp field.

Legal Hemp’s Rising Popularity

According to national figures, there are 275,000 acres of legal hemp currently registered for production. This is compared to a total of 76,000 registered in 2018.

With over 300,000 acres set to be approved for 2019, the industry is set to open up to businesses from all sides. From oils, to fabrics, to CBD tinctures and other products, many small businesses are already getting started.

No big companies have hopped into legal hemp yet, though. As a young, semi-unstable industry, pharmaceutical companies, big health product companies and others are waiting to see how it turns out. Just like legal cannabis, it will most likely be a few years of small-scale growth until big business gets involved.

But the industry already can’t keep up with the supply and demand. There may be thousands of hemp farmers, but there aren’t as many processors or distributors. This has created a bottle neck in the industry where only a select few are growing quickly, while others may still be waiting to have their hemp processed.

Hemp is the New Cash Crop

All hemp is not grown equal, or in the same way. So while some hemp grains or fibers may return only slightly than traditional row crops, but hemp grown for CBD can bring in big money.

While a pound of traditional crop seeds may be $20 a pound, high quality, high CBD hemp can sell for $1 per seed. Now imagine a farmer putting down 2,000 seeds per acre, and producing seeds from their crop. The return compared to traditional crops is exorbitant.

While most people are doing really well with hemp on their farm, not everybody is cashing in. A lot of farmers and growers get caught up just trying to find a seed supplier or a buyer. This could in part be due to the young industry still attracting new business.

As for the businesses that were in operation prior to legalization, they are growing at a rapid rate. They are also diversifying. With so many new options for businesses due to the legality of hemp, new avenues are opening left and right.

This Week’s Episode

In this episode of The Real Dirt Podcast, Chip and Co-Host Justin Jones talk with Mike Leago from the International Hemp Exchange. The first international hemp marketplace, Mike has developed a huge business out of connecting buyers and sellers of all hemp products.

From smokable flower to seeds and biomass, iHempX helps hemp farmers big and small get a strong start in the legal hemp industry. Hear the three dive into the rising trends in the industry, the issues farmers are facing as they try to enter the industry, and where the industry is headed, only on The Real Dirt Podcast!

International Hemp Exchange

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Investing in Cannabis with Louis Han

Investing in Cannabis with Louis Han

When Louis Han started at Arcview Group in 2015, the firm had only invested about $60 million in cannabis ventures. Today, they’ve invested over $250 million.

Louis Han is the Director of Deal Flow for The Arcview Group, an investment firm with a strict focus on investing in cannabis. Financing is one of the most difficult aspects of starting a cannabis business.

Louis and The Arcview Group make it easier.

Investing in Cannabis Businesses

Cannabis is still federally illegal. Banks operate on a federal and state level. This makes most banks averse to the idea of loaning money to new cannabis businesses, even if they operate within a legal cannabis state.

The Arcview Group negates the need for cannabis entrepreneurs to go to banks at all. With its massive investor network, from small scale angel investors to big money opportunists, Arcview can invest in cannabis businesses big and small.

Rising Opportunity, Limited Investors

While the opportunity to start a business in the cannabis industry has never been more possible, investors are still limited, and competition to obtain investment is fierce. This means Arcview can’t just invest in anybody. That’s where Louis Han comes in.

As Director of Deal Flow, an aspect of Louis’ job consists of vetting businesses seeking investment. There’s a lot of people looking for financial assistance, but only the most promising will get to interview with Arcview investors. Louis has seen some of the most successful cannabis businesses go through Arcview.

With his experience running his own cannabis business in California, plus his years with Arcview, Louis has an eye for what a cannabis business needs to obtain investment in the industry.

In This Episode

Louis Han is a cannabis investment expert. In this week’s episode of The Real Dirt, Chip and Louis talk over the phone about investing in cannabis and hemp. From how to formulate your pitch to reading your audience, Louis and Chip go through the full investment process.

In the words of Louis, “Getting involved with an investor is almost like getting married. Especially if they own a large portion of your business, they can have an impact on your financial decisions, and the way your business runs.” 

If you’ve been considering seeking investors for your cannabis business, this an episode you’ll want to hear. And check out Arcview Group’s Investor Meeting happening in Canada on April 23rd!

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The Future of The Legal Hemp Industry

The Future of The Legal Hemp Industry

The legal hemp industry is growing fast. But is it growing too fast for its own good?

People are hopping onto the legal hemp train. The industry is growing fast, and is more than likely going to surpass the few legal cannabis industries in the United States within a few years in terms of revenue.

While the US federally legalized industrial hemp at the end of 2018 with the help of the Farm Bill, the rest of the world is slowly starting to catch up, with multiple countries in the European Union updating their hemp laws as well.

The states have had their fair share of problems getting the legal hemp industry off the ground only three months into 2019, with multiple arrests in Oklahoma and Idaho due to local law enforcement not being notified of hemp being transported through the state. But figuring out the right way to navigate this new industry isn’t so black and white.

Should the hemp industry be regulated like the cannabis industry?

It’s challenging to say for sure. Hemp can serve many purposes that regular, high-THC cannabis cannot, and vice versa. But measuring the levels of THC content in both hemp and THC-heavy cannabis with the same standards can make the transition between industries much simpler.

However just like individual states have different laws regarding their legal cannabis industries, states can also establish their own hemp laws, as long as they don’t go against the federal law. Now that the legal hemp industry is going to allow interstate commerce, problems will inevitably arise when states have differing hemp laws while still sharing a border.

Where is the legal hemp industry headed?

Right now, a lot of people are using cannabis advertising methods for hemp products. To Hollis Carter, part of what makes hemp cool is that it is hemp, something different from your regular THC-rich cannabis.

There is a growing rise in smokeable hemp flower products, like Hollis’ Lefty’s Hemp Co. and others. For others trying to get involved, regulations might pose a serious problem.

While there is a growing desire for quality, smokeable hemp flower, many fail to meet the .3% THC requirement currently. On top of that, the market is currently very saturated.

A lot of people are trying to get involved, with many already getting weeded out (pun intended) for poor business practices or low quality products.

With a new legal industry that will make it much easier for entrepreneurs and other companies to invest their capital safely, there is a lot of room for innovation and infrastructure that will bring in a lot of businesses one might not originally have considered.

From hempcrete to hemp clothing, and the ancillary businesses that will be integral to the production of these commodities, there’s a lot more opportunity in the legal hemp industry than you might think!

The Real Dirt Hempisodes

With all that in mind, we bring you The Real Dirt Hempisodes! Over the next few weeks, The Real Dirt is diving into the legal hemp industry. 

This week Chip talks with Graham Carlson of Charlotte’s Web, the very first CBD flower producers and creator of Charlotte’s Web CBD tincture, along with Mike Leago of the International Hemp Exchange and Hollis Carter of Lefty’s Hemp Co. about some issues with the legal hemp industry, how it compares to the legal cannabis industry, and how it can be changed for a more productive industry overall.

Roll one up and enjoy the first Hempisode, and tune in next week for Part 2 in the Hempisode series.

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Check out Charlotte’s Web CBD

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Check out Lefty’s Hemp Co.

Inside Maryland’s Medical Marijuana Industry

Inside Maryland’s Medical Marijuana Industry

Maryland has always been relatively progressive compared to its neighbors when it comes to cannabis. The state decriminalized small amounts in 2010, and enacted a full medical marijuana program in 2012. Now we’re in 2019, but where does the Maryland medical marijuana industry stand?

Inside Culta’s Cultivation

Culta opened in Baltimore, Maryland in 2018 with the goal of bringing exclusive, high quality genetics from successful seed banks and breeders to the Maryland medical marijuana industry.

They built their cultivation facility from scratch inside an old factory right in the inner harbor of Baltimore’s downtown. They also designed one of only four vertically integrated cannabis businesses in the state. This means from seed, to processing, to sale, Culta handles it all in-house.

With over 400 lights in the facility, separate rooms for genetics testing, vegetation and flowering, Culta is by far one of the most technologically sophisticated cultivation facilities in the state. Plus, they sourced some of the most experienced cultivators in the country to build their genetics.

Maryland Medical Marijuana

In this episode of The Real Dirt Podcast, Chip talks with Jay and David, Head Grower and Cultivation Manager of Culta.

Together the three of them dive into the design behind Culta’s facility, the benefits of being vertically integrated, the issues new businesses are dealing with in an industry that is still finding its footing and more.

Roll one up, relax and enjoy the first episode of Season 3 of The Real Dirt with Chip Baker!

This episode is brought to you by Cultivate Colorado, the top grow store in Denver with two locations in the metro area. Cultivate supplies Real Dirt listeners and guests with the grow gear they need to succeed in the garden. Check them out on Instagram @cultivatecolorado for the latest updates and deals.

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Check out Culta on Instagram @cultaig!