Hemp Laws Explained with Vicente Sederberg LLC

by Travis C | Apr 23, 2019 | cannabis industry, Cannabis Law & Compliance, Commercial, Hemp, Hempisodes, Season 3, The Real Dirt Podcast Episodes

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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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Why Are CBD Products Exploding?

by Travis C | Mar 28, 2019 | 420, 420 News, Blog, Culture

It’s a unique compound that has Facebook moms and media outlets mystified. But why is CBD all the sudden exploding?

There’s a few reasons CBD products are becoming more popular every day, especially in the United States. The first has already been mentioned; the media. But we’ll get to that later. Let’s start with the recent legality change of CBD.

The 2018 Farm Bill

CBD is a chemical compound found only in the cannabis plant. It is present in almost all varieties of cannabis, even if in just trace amounts. This means that CBD is also found in hemp.

Hemp has had a bumpy relationship with the U.S. government since the early 1900s. While the hemp industry was huge in the 1920s, the paper industry was quickly rising, and couldn’t compete, starting a propaganda campaign eventually leading to the criminalization of hemp and cannabis.

At least, that’s the theory.

While hemp was considered federally illegal much like cannabis (they are the same thing), states could still pass their own laws regarding hemp, much like states now that have legal cannabis laws. Colorado even added an amendment to their state constitution, giving citizens the right the grow hemp.

But in 2018, it all changed. The 2018 Farm Bill fully legalized “industrial hemp” at the federal level.

The Legalization of Industrial Hemp

What is industrial hemp? What makes it different from “regular” hemp? This is where some people get caught up.

While hemp and cannabis are the same thing, any cannabis variety that gets you “high” contains high amounts of THC, the psychoactive compound in cannabis. Most cannabis strains you can get in the legal market are bred to have as high THC levels as possible, with little focus on the other compounds.

Hemp has always been seen as the weedy, wild version of cannabis. It isn’t bred to have high THC, but through its evolution of enduring tough climates in the wild, hemp varieties naturally have higher CBD levels. However, not all hemp is legal, hence the term “industrial hemp”.

Industrial hemp is strictly cannabis that has a THC content of .3% or less. Anything above is still illegal. So even though .4 or .5% THC wouldn’t have any real affect on a person, it is considered psychoactive cannabis, still illegal and classified as a Schedule 1 narcotic under the Controlled Substances Act of 1970.

So, now industrial hemp is legal, as long as it doesn’t surpass .3% THC. However there is no regulation for CBD at the moment. This has opened up quite a lucrative opportunity for cannabis industry entrepreneurs and farmers alike.

The Rise of CBD Products

CBD started out slow. Products existed, such as hemp seed oil and other hemp derived products that contained CBD, but little was known about the actual benefits of CBD. Then came Charlotte’s Web.

Charlotte was a little girl in California suffering from intense seizures, sometimes having dozens a day to the point she was incapacitated. After a cannabis farm in Northern California developed a CBD specific strain that had extremely low THC, but high CBD, they turned it into a digestible tincture for Charlotte.

Her seizures all but stopped. This is where the snowball started rolling.

More and more people started treating their children’s epilepsy with CBD, then more studies came out showing CBD potential in aiding with chronic pain. With its growing social acceptance, plus the added boost of the Farm Bill, more CBD businesses are opening their doors.

While it is still currently unregulated, there is an entire CBD marketplace that has developed online. From Amazon to CBD wholesaler websites, anybody can buy CBD products online with a credit card. With massive availability and a growing understanding of its benefits, all CBD needed to push over the edge was some media attention.

cbd products are becoming popular in the media

The Today Show covering the extraction of CBD from cannabis in a March 2019 segment.

The Influence Machine

To say that modern media outlets in America carry a large swath of influence would be a massive understatement. And with more news outlets than ever before in history accessible with just a few clicks, people are ingesting more information and influential content than ever before.

With the passing of the Farm Bill and increased public awareness about the benefits of CBD, people started talking online. What started as a niche group of mostly middle aged women sharing their experiences of helping their arthritis pain with a little CBD ointment, spread across the web like a bushfire.

Before long, CNN was covering the rise of CBD products. Soon after that, so was The Washington post. As did NBC, CBS, and even Fox News.

With the media machine pushing it into the mainstream, and social media platforms like Facebook, Twitter and Instagram flush with CBD anecdotes and articles, its rise was inevitable.

The question now is, will it last?

The Future of CBD Products

The future for CBD is still vague. It isn’t currently regulated by the FDA, and its only claim to legality lies within the rulings of the 2018 Farm Bill. There have already been plenty of issues with CBD and industrial hemp since legalization, and most likely, there won’t be any shortage of issues throughout 2019.

That doesn’t mean the market isn’t growing. In fact, the CBD industry is growing at a rate that could put it on pace to surpass legal cannabis by 2022. With that said, regardless of new regulations or restrictions, the future of CBD products is most likely bright, and green.

Want to learn more about the rise of CBD and the legal hemp industry? Check out this episode of The Real Dirt Podcast, featuring Graham Carlson of Charlotte’s Web, Mike Leago of the International Hemp Exchange, and Hollis Carter of Lefty’s Hemp Co.

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Legal Hemp or Illegal Cannabis?

by Travis C | Feb 4, 2019 | 420 News, Blog, Cannabis Law and Compliance, Culture

Legal hemp may have been included in the 2018 Farm Bill, but that hasn’t stopped some serious issues from arising since its passing.

Farmers everywhere rejoiced when legal hemp was signed into the Farm Bill at the end of 2018. But the bill has yet to actually take effect, and it could be another year before federal law surrounding hemp actually takes hold.

This delay hasn’t stopped many from jumping in head first to the hemp industry in an attempt to get ahead of the curve. Unfortunately, state governments aren’t as eager to jump in.

Oklahoma Hemp Bust

In early January Andrew Ross from Aurora, CO was transporting several thousand pounds of what he claimed to be industrial hemp to Oklahoma to Colorado. Ross’ semi-truck was pulled over in Pawhuska after running a red light.

The officer smelled what he claimed to be cannabis as he approached Ross’ van, at which point Ross told him that they were the security for the semi-truck transporting hemp. Ross was then instructed to open the semi-truck, revealing over 20 bags of the green plant.

After conducting a field test, which tests for any amount of THC, the officer believed the plants to be cannabis and not hemp. However, legal hemp can have up to .3% THC. This has led to a lengthy delay in the case as the local police have had to send the plants to be lab-tested, which was additionally delayed by the recent government shutdown.

Unfortunately, during this time, two of the four who were arrested — Ross and one other in the van and another two in the semi-truck were arrested in total — have remained in prison since they couldn’t afford bail. They most likely won’t be released until the conclusive results of the tests come back.

Legal Hemp In Oklahoma

Industrial hemp was legal in Oklahoma before the Farm Bill was signed. This means that the hemp Ross claims to be transporting, is perfectly legal in the state. But that isn’t the problem here.

The issue is that law enforcement and government officials alike cannot confidently judge the difference between “legal hemp” and “illegal cannabis”. When field tests will always say cannabis if there is any trace of THC, no police officer can realistically judge a situation in which they smell what they think is cannabis, even if hemp smells exactly the same.

A similar issue has arose in Idaho, where there are no such hemp laws on the books, and the government is in no hurry to abide by the new Farm Bill.

Biggest Bust In History (?)

Law enforcement officials are saying it could be the biggest cannabis bust in state history. If it is cannabis that they found in the back of Dennis Palamarchuk’s semi-truck, that is.

During a routine highway semi-truck safety inspection, the conducting officer smelled strong odor of what they suspected to be cannabis. Much like Ross’ story, the truck statement claimed that the 31 bags in the truck all contained industrial hemp. However, since this happened in Idaho, where there are no laws on the books regarding hemp at the state level, it has caused more problems.

Over 6,000 pounds of hemp that supposedly tested positive for THC. The amount of THC has not been specified.
Photo courtesy of Idaho State Police

According to the Farm Bill, states that do not have hemp laws on the state level have two options. Propose a plan to the federal government for their own hemp laws that still stay within federal guidelines, or follow federal law on the state level. Idaho has neither submitted a plan nor assumed the laws put forth in the Farm Bill as of yet.

This means that whether or not Palamarchuk was transporting hemp or cannabis is irrelevant. In Idaho, both are currently still illegal. Thus, Dennis was arrested for trafficking, and as it stands, police have seized over 7,000 pounds of what they consider to be cannabis. While testing positively as hemp may help Dennis legally, it appears that there is little to be done for him in this situation.

What Happens Next?

These two separate but similar issues have highlighted serious problems in law enforcement’s ability to recognize and distinguish differences between now federally legal hemp, and illegal cannabis. Current technology does not allow police officers conducting a normal stop and search to confidently judge the results of a field test.

As laws change, state governments will have no choice but to follow federal law in some manner and allow transportation of industrial hemp. How the states will enforce this while keeping hemp separate from cannabis is yet to be seen. If these two busts are any sign of things to come, however, we have a long way to go.

New Year, New Industry

by Travis C | Jan 11, 2019 | 420 News, Blog, Business, Culture, Science & Technology

2018 was a big year for the cannabis industry. 2019 is poised to change the industry even more.

The cannabis industry grew on a global scale in 2018. Not just in the United States, but around the world. More places are starting to accept cannabis as medicine and recreation, with even more planning to get on board in 2019.

While there are plenty of small or local changes to cannabis in the US, here some of the biggest changes in the cannabis industry that came in 2018.

Canada Legalization

Canada legalization of cannabis was a major victory for the industry in 2018. The government of Canada legalized the recreational use of cannabis across the entire country, with local governments still being able to limit the law.

However compared to legalization within some states of the United States, Canada legalization is run entirely by the government instead of private businesses. All licensed grows, manufacturers and retailers are government run. This has had a split impact on the industry as a whole in Canada.

While access to cannabis has become much easier — consumers can order cannabis online, for delivery, directly from a government website — supply currently cannot meet demand, causing backorders, long delays, moldy and stale product, and other problems.

The biggest problem Canada legalization has adversely caused is an increased use of the private market. If they government can’t supply its people but says it can be the only source, people will go to the private market to get the products they want without the long delay and risk of bad product.

Farm Bill and Industrial Hemp

difference between hemp vs cannabis CBD

At the end of December 2018, Donald Trump surprisingly signed the Farm Bill of 2018, also known as the Agriculture Improvement Act of 2018. Among many other adjustments to the agricultural industries in the US, the farm bill also separated the definition of industrial hemp to be different from that of cannabis.

Before the bill was signed, hemp and cannabis were under the same definition, with a sub-definition of hemp being any part of the cannabis plant with less than .3% THC. However, as sub-definition, it was still considered a Schedule 1 narcotic under the Controlled Substances Act of 1970.

The farm bill separated industrial hemp from the traditional cannabis definition, and created a federal definition of industrial hemp, being the same definition as before, but off of the controlled substances list. This has opened up the possibility for a massive hemp and CBD industry to develop.

While it’s too soon to say where the industry is headed — it will most likely be a year before the new bill takes full effect — the Farm Bill and legalization of industrial hemp means big things for the future of the cannabis industry.

First Year of California Legalization

california legalization needs to be controlled by farmers

California has a population with over 10 million more people than the second place contender, Texas. It was expected for the legalization of cannabis in California to expand the already developed marketplace in the state to great new bounds. However the new laws in place have had almost the opposite effect.

The cannabis marketplace in California was already the biggest in the country, despite the majority of growth occurring in the private market. It was inevitable, then, that the new, legal market would work its hardest to eradicate this competition.

Extremely limited licenses available to the highest bidder resulted in hundreds of farms and private operations having to shut down, simply by not being able to afford a legal license. This was the case for a large portion of the cannabis community in California, opening up the door for larger companies with more capital interests to enter the market.

With the biggest companies buying as many licenses as possible, the OGs of the industry are left with little options. Either continue to operate in the private market and hope to get a license before getting caught, or leave the industry in California.

It’s been a tough year for a thousands of growers across California, and 2019 most likely won’t prove to be much different. Despite its flaws however, California will still be a huge legal cannabis marketplace, and most likely surpass all other states, with the end result being the eradication of the private market entirely in the state.

An Eventful Year

2018 was a year full of surprises. Colorado passing Amendment X, The Farm Bill, California’s industry revelations and more. This year had its ups and downs, it’s issues that split the community, but overall the industry is in a better place than it was a year ago.

More states have legalized both recreationally and medicinally, cannabis is more acceptable in social culture than ever before, and more people are learning about the lies they were told during the drug war movement. Some are already saying 2019 will be the year of weed, while others think the bubble is bound to burst any day now.

We’ll just wait and see what’s in store for cannabis in 2019!

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2018 Farm Bill Explained

by Travis C | Dec 18, 2018 | 420 News, Blog, Business, Growing

The 2018 Farm Bill has passed the House and Senate. After Trump signs, Industrial Hemp will be federally legal.

UPDATE: This article was written just before Trump’s signing. The article has now been updated to reflect the new status of the 2018 Farm Bill.

The 2018 Farm Bill has been signed by Donald Trump and passed into law, making Industrial Hemp federally legal. You might be thinking that it already was legal due to the 2009 Farm Bill, but not in the way you think.

This new bill (legally titled the Agriculture Improvement Act of 2018) differs from the 2014 Farm Bill in a few ways. The biggest difference being the new definition of Industrial Hemp being added.

2014 Farm Bill

Five years ago, the 2014 Farm Bill was passed, which defined Industrial Hemp as, “the plant Cannabis Sativa L., and any part of such plant, whether growing or not, with a delta-9 THC concentration of not more than 0.3% (on a dry weight basis).”

The 2014 bill also distinguished between marijuana and hemp for the first time. The laws enacted by the 2014 Farm Bill allowed for the cultivation of industrial hemp for research purposes, as part of an agricultural program, or as permitted by state law.

Also allowed under the previous bill was the study of the “marketing of Industrial Hemp”. The vagueness of this clause allowed states to set up agricultural pilot programs that also permitted commercial sales of industrial hemp. However, interstate commercial activity is not expressly permitted under the 2014 Farm Bill.

The 2018 Farm Bill changes that too.

2018 Farm Bill

The 2018 Farm Bill drastically alters the current legal landscape governing Industrial Hemp production in the United States.

First, the 2018 Farm Bill defines “hemp”as any part of the plant, “including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not,” with a THC concentration of not more than 0.3% THC on a dry weight basis. The 2018 Farm Bill also amends the CSA (Controlled Substances Act) to exclude “hemp” from the definition of “marihuana.”

The 2018 Bill also creates a specific exemption in the CSA for THC found in hemp. These expanded definitions and corresponding exemptions from the CSA could also apply to imported hemp. Meaning the new bill will allow for the importation and exportation of industrial hemp to and from the United States.

Unfortunately those convicted of a felony involving a controlled substance are barred from participating in any hemp program established under the 2018 Farm Bill. While lawmakers were hopeful that this would be revised in the final version of the bill, it appears that it wasn’t.

Federal Regulation of Industrial Hemp

The 2018 Farm Bill also amends the Agricultural Marketing Act of 1946 (“AMA”) to allow for federally-sanctioned hemp production under the authority of the USDA. This means the USDA is now the sole federal regulatory agency overseeing hemp production in the United States.

However, states will be able to submit their own proposals to the USDA for state-regulated programs. These programs must stay within the confines of the USDA requirements, including:

a practice to maintain relevant information regarding land on which hemp is produced in the applicable jurisdiction;
a procedure for testing THC concentration levels of hemp produced in the applicable jurisdiction;
a procedure for the effective disposal of products produced in violation of the statute;
a procedure to comply with the statutory enforcement procedures;
a procedure for conducting annual inspections to verify that hemp is not produced in violation of the statute; and
other practices or procedures as the Secretary of Agriculture considers to be appropriate and consistent with the statute.

Should a state decide not to submit a plan for its own regulatory procedures, that state can simply apply for licensure directly through the USDA. In states with approved plans, all those participating in the program must adhere to the state laws that are established.

In addition, the 2018 Farm Bill explicitly states that “nothing in this title authorizes interference with the interstate commerce of hemp.” As such, the 2018 Farm Bill will open up clear legal pathways to interstate transport in the United States.

The 2018 bill also requires the USDA to conduct a study within 120-days of enactment to determine the economic viability of the domestic production and sale of hemp.

With the 2018 Farm Bill now signed and passed into law, it’s a matter of time before the hemp industry explodes. However, the 2014 Farm Bill will remain in effect until a solidified plan is established by the USDA, which will most likely take a year.

So don’t expect to see hemp products popping up at your local grocery store any time soon.