I started writing "American Hemp" in December 2017. Every year since 2015, Congress has been unsuccessful in passing the Industrial Hemp Farming Act, designed to legalize hemp. When the legislation was included in the 2018 Farm Bill, I assumed it would be used as a bargaining chip and eventually cut.
Much to my surprise, Congress passed the behemoth bill on December 10, 2018, and simultaneously removed federal restrictions on hemp. And then, in the midst of a government shutdown, President Donald Trump signed the bill and officially made hemp legal.
Here was Congress removing a substance from the Controlled Substances Act, and there were no objections. Here was Congress declaring a Schedule I narcotic as an agricultural commodity, something we were told time and time again wasn’t even possible because the DEA and FDA had the power to classify drugs and determine what is and isn’t legal and why, and there were no objections.
The previous Farm Bill (passed in 2014) granted states the authority to begin their own hemp research programs, and as of 2018, the number of states participating had grown significantly. Once politicians did the math, they realized if hemp-CBD was classified as a commodity rather than a Schedule 1 narcotic, farmers could make some serious money. So perhaps that was the leverage necessary to draft the new sections of the 2018 Farm Bill? Regardless, here are the sections of the 2018 Farm Bill that fully legalized hemp:
297A: Definitions
In the new Farm Bill, hemp is defined as Cannabis sativa L, a plant with a THC concentration of no more than 0.3 percent on a dry weight basis. This includes “all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not.”
12619: Conforming Changes to Controlled Substances Act (CSA)
Section 102(16) of the CSA, which previously listed hemp as a Schedule I narcotic, has now been completely amended. After the Farm Bill passed, marihuana as it is defined in the CSA, no longer include hemp. They are now separate under federal law, with hemp being defined as an agricultural commodity. All aspects of hemp—including CBD derived from hemp—is now legal under federal law. This means hemp businesses can deduct business expenses when they file their taxes, and can even be publicly traded on the stock exchange, just like any other industry.
11106: Insurance Period
Now that farmers can legally grow hemp under federal law, they can receive crop insurance under the Federal Crop Insurance Act, which means hemp farmers can also utilize federal banks to open accounts and apply for loans—something they were unable to do previously due to hemp’s CSA classification.
11121: Reimbursement of Research, Development, and Maintenance Costs
Hemp farmers involved in research projects can now be reimbursed by corporations funding the study. This includes those in the Hemp Pilot Program.
10114: Interstate Commerce
The Farm Bill will not prohibit the interstate commerce of hemp or hemp products. Therefore, hemp can be grown in any state and then be shipped to another state to be processed or sold in a retail capacity. Prior to this, federal law stated hemp that was being grown legally and domestically had to stay within state lines. This is a huge win for the industry, considering even wine manufacturers can’t distribute to all fifty states due to interstate commerce laws.
Hemp-CBD Saves Kentucky Farming
Senate Majority Leader Mitch McConnell has been a strong, public supporter of hemp. Kentucky farmers needed another crop to grow, now that the demand for tobacco has gone down significantly. According to the US Department of Agriculture (USDA), over 600,000 acres of tobacco were harvested in Kentucky in 1919, but by 2018, the state produced less than 100,000 acres. Soybeans have replaced tobacco as the leading crop in the state, but according to a Kentucky farmer interviewed in Quartz, the return on investment isn’t as substantial as hemp. An acre of soybeans yields about $500, while an acre of hemp being grown for CBD has the potential to bring as much as $30,000 per acre. While this appears to be an overly optimistic figure, turns out that earning $30,000 per acre is not only accurate, but a conservative estimate.
According to the Kentucky growers surveyed by Hemp Business Daily, a pound of dried CBD flower went for about $20–$50/pound in 2018 (depending on the quality of CBD content). Most CBD farms yield about one pound per plant, and they can fit up to 2,500 plants per acre, so on the low end of the spectrum, one acre could very well produce $30,000–$50,000.
Bringing that math full circle, Kentucky has 75,800 farms, and the average size is 169 acres (the national average for a farm is 444 acres). Now, I’m not a hemp farmer, nor do I live in Kentucky, but I’d be pretty annoyed if I was growing 169 acres of soybeans, making approximately $84,500.00 every harvest season (prior to all my expenses), knowing full well I could be making at least $5,070,000.00 on the same exact piece of land if only the dumbasses in Congress would just pass a law. Sure, that amount doesn’t reflect net pay, but even after all expenses from growing hemp are deducted, that’s still an obscene monetary gain in profit, especially because most farms in Kentucky are small family farms—not the mammoth corporate farms that get all the USDA subsidies. Over 50 percent of Kentucky (that’s 12.8 million acres) is considered farmland, yet 55 percent of its farms (41,800 farms) have had annual sales of less than $10,000. No wonder Kentucky farmers are excited about adding a new crop to their portfolio.
Kentucky farmers are most likely well aware of their state’s American hemp history legacy. According to a 2002 research article published through the American Society for Horticultural Science, “from the end of the Civil War until 1912, virtually all hemp in the US was produced in Kentucky,” and the state was the greatest producer of hemp in the nineteenth and twentieth centuries. Kentucky’s current agricultural department (and Kentucky farmers, I’m sure) would want nothing more than to be crowned with that heavyweight title once again.
“Kentucky’s success [with hemp] has surpassed all of my expectations,” wrote McConnell in an opinion piece published in the Courier Journal, days after signing the 2018 Farm Bill. “Hemp can be found in food and clothing, in home insulation and your car dashboard, and in many other Kentucky Proud products. Last year alone, hemp surpassed more than $16 million in product sales and attracted more than $25 million in investments to the commonwealth. Given this remarkable progress, I feel confident that hemp’s economic contributions will keep growing with full legalization.”
While Mitch McConnell will go down in history as the man who brought back American hemp, and while I’m sure Kentucky farmers are proud of what he’s accomplished through the 2018 Farm Bill, I have to say, this legislation is embarrassingly overdue. McConnell isn’t the only senator with a state full of prospective hemp farmers, and have you ever heard of a politician running for office that didn’t say, “if elected, I promise to create more jobs”? So seriously, Congress, what took so long to legalize hemp, which in turn creates an all new domestic industry, which in turn creates more jobs?
While the 2018 Farm Bill is a truly historic victory for hemp, and quite frankly could very well be the beginning of the end of cannabis prohibition as a whole—and I couldn’t be happier for the future of our country—there are some drawbacks to the legislation.
Exclusion of Controlled Substance Felons
For starters, convicted felons can’t participate in the program until ten years after their conviction date. I’m not talking about murderers. The 2018 Farm Bill specifically states “any person convicted of a felony relating to a controlled substance” is ineligible to participate until ten years following the date of the conviction. The only exception to this are the felons who are already approved to grow hemp through the 2014 Farm Bill.
So, according to the law, a convicted murderer can grow hemp, but someone convicted of a drug offense cannot? Didn’t we already establish that hemp isn’t a drug?
Granted, similar parameters were already in place in some states that participated in the hemp pilot program, plus similar rules currently apply to the marijuana industry, but seriously, I thought we were past this. It’s tough enough to make an honest living after being in prison. No one wants to hire a convict. Statistically speaking, we already know that drug offenders are generally nonviolent—and whether or not a convicted felon is violent, that’s not even part of the equation here.
In "Jesse Ventura’s Marijuana Manifesto," we covered something known as insourcing. This is essentially the slave labor/sweatshop staff in the United States that is not only legal, but arranged by the prison system. In most instances, prisoners work on farms for less money than undocumented workers. They literally make pennies an hour. While this program also gives tax breaks to the corporations that hire the workers (as a reward for being so generous because they take the risk of hiring criminals and paying them next to nothing), the program could be scaled into one that trains convicts in various aspects of the farming industry (sort of like an apprenticeship) if in fact a decent job in agriculture were possible upon their release. Now that hemp-CBD is all the rage, farmers will need to hire more workers, and if convicts have already been trained to work on the farm, finding a stable job in agriculture could be possible.
As a society, if we’re looking to reducing recidivism, a convicted felon has already served the time for the crime. Why on earth would Congress stand in the way of allowing nonviolent drug offenders to work in the agricultural industry after that’s the only job experience they’ve had, year after year, in prison? This is hemp we’re talking about. Not marijuana. A felony conviction should have no bearing on a person’s eligibility—or ability—to grown an agricultural crop.
Industrial Hemp Regulations and Hemp License Eligibility
The 2018 Farm Bill removed hemp from the Controlled Substances Act, but if a state wants to be the primary regulatory authority over its hemp production, new hemp laws must be submitted to the Department of Agriculture for approval. The Farm Bill instructs states to determine if there should be a limit to how much can be grown, where the crop can be grown, how it should be grown (what chemicals can be used to grow it), what the inspection process is (to ensure THC is below .3 percent), and what products can be made from it. The fees associated with the application to grow it and the license to grow it are also up to the states, but the federal government expects to see a clear outline of parameters from each state.
Since hemp is now federally legal, the FDA and other federal regulatory agencies are now tasked with determining nationwide parameters. While some of these decisions may not be determined immediately, the overall rollout of American hemp will greatly depend on the Secretary of Agriculture, former Georgia governor George Ervin “Sonny” Perdue.
The Role of the US Secretary of Agriculture
According to the 2018 Farm Bill, Secretary Perdue must conduct a study of all hemp pilot programs and present the findings to Congress, which is to occur no later than twelve months after the Farm Bill is passed (so the study will be released sometime in December 2019).
In addition to this study, Secretary Perdue will also submit a report to Congress within 120 days to outline the legitimacy of the industrial hemp research to determine “the economic viability of the domestic production and sale of industrial hemp, and hemp products.”
The hemp research pilot program will then be repealed a year after the secretary publishes new guidelines for full-scale, nationwide commercial production of hemp. I’m assuming all aspects of hemp will finally be federally legal and treated as a true agricultural crop by that time, but we’ll have to wait and see.
Unlike some of President Trump’s other appointees, Perdue has had extensive experience in his field. Perdue ran a successful grain and fertilizer business from 2003 to 2011 (prior to becoming governor of Georgia), and he returned to his family agribusiness after leaving office. While he was in favor of a swift passing of the 2018 Farm Bill, and he was quoted as saying Congress’s decision would be arrived at prior to Christmas (which it was), he hasn’t made any previous pro-hemp statements during his career in public service. Prior to the 2018 Farm Bill, it was illegal to grow hemp in Georgia, so this is all a bit of a cliffhanger; we’ll have to hold on, wait, and see if there are clashes between state and federal regulators.
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