BELIEVE THE HYPE - INDUSTRIAL HEMP IS ABOUT TO POP OFF

​For the last 50 years, Industrial Hemp quietly occupied a seat next to LSD and Ecstasy as a Schedule I controlled substance under the Controlled Substances Act (CSA), but that’s about to change. ​

Industrial hemp landed itself alongside its nefarious counterparts as result of law makers' strict adherence to botanical nomenclature. Hemp and marijuana come from the same genus of flowering plant, the infamous cannabis plant. However industrial hemp contains only negligible amounts of the psychoactive constituent tetrahydrocannabinol (THC). This important distinction is the justification propelling bipartisan (even Paul Ryan is a supporter) law makers to pass the Hemp Farming Act of 2018, part of the larger 2018 Farm Bill, descheduling hemp from the CSA entirely thus legalizing the crop.

Which begs the question, “So what?”

Despite popular belief, the industrial uses for hemp extend far beyond the friendship bracelets you made at overnight camp as a pre-teen. "Industrial hemp is an agricultural commodity that has been used for centuries to produce many innovative industrial and consumer products, including soap, fabric, textiles, construction materials, clothing, paper, cosmetics, food, and beverages,” according to the Senate Resolution designating the week of June 4 through June 10, 2018 as “Hemp History Week.”

Indeed, the value of hemp imported into the United States for use in the production of other retail products is estimated at approximately $76,000,000 annually. The United States is the largest consumer of hemp products in the world. That U.S. Farmers may now grow and sell  industrial hemp is a very big deal for those farmers, particularly those struggling from the loss of tobacco, as well as some discerning investors.

So how does all this all fit in with the burgeoning CBD market?

For those of us living in California, the popularity of hemp-derived cannabidiol (CBD) products is hard to miss. After some high profile endorsements of its benefits, particularly one by CNN's Chief Medical correspondent Sanja Gupta,  CBD appeared to be infused into everything from juices, coffee, oils, pet products, and body lotions. Sales for CBD products is projected to exceed $2 Billion by 2022 as Cannabis moves into the health and wellness market.

But is it legal?

Curiously, the ubiquitous nature of CBD products in California persists, despite California Department of Health’s (CDPH) recent declaration via a FAQ that hemp-derived CBD may not be added to food and drinks for humans, pets, and pretty much anything else. It should be noted, however, this FAQ is not law. It remains to be seen if California will step up to the plate to regulate this hemp-derived industry as it has the cannabis industry. In the meantime, operators who choose to work in the space do so in an extremely grey area.

Despite some regulatory uncertainty in California, the hemp industry is very well-positioned to boom following the passage of the 2018 Farm Bill, and thanks to the versatility of the crop and increasing consumer awareness of the benefits associated with CBD.

Smith Shapourian Mignano PC is available to answer any questions or concerns you may have regarding industrial hemp generally and/or California's regulatory landscape with respect to the hemp-derived CBD market.

This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.
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