What Farm Bill? Hemp industry shrugs off law’s expiration

Farm Bill hemp, What Farm Bill? Hemp industry shrugs off law’s expiration

(This story has been updated with the USDA comment saying it will continue enforcing the current law.)

The law that ushered in the modern hemp industry in the United States has expired, but hemp growers, processors and retailers are counting on legal assurances that the nation’s experiment in allowing limited hemp production won’t immediately end.

The 2014 Farm Bill, which authorized hemp production under state research programs, expired Sunday – the last day of the federal fiscal year.

Both chambers of Congress passed new versions of the Farm Bill earlier this year, but lawmakers have been unable to agree on a unified version of the $430 billion measure.

But there is a silver lining for hemp entrepreneurs in the new Farm Bill’s delay.

While the 2014 Farm Bill authorized hemp growing, it didn’t fund it. Other agricultural programs weren’t so lucky – they lost funding with the expiration.

Other terms of the 2014 law, including hemp pilot programs, continue without change, according to U.S. Department of Agriculture Secretary Sonny Perdue.

“USDA will continue to implement provisions of the 2014 Farm Bill within the limits of the law,” he told Hemp Industry Daily in an emailed statement.

The status quo has hemp entrepreneurs breathing a sigh of relief.

“I feel very comfortable,” said Jason VonLembke, a grower with 120 acres of hemp in eastern Colorado who plans to start his harvest this week.

“We definitely would like a Farm Bill to pass – it would make everything cleaner and make everybody feel a little more comfortable. But we’re standing firm and not changing our plans.”

The current landscape

The 2014 Farm Bill gave states few directions on how to regulate hemp – and it didn’t compel them to do so.

Four years later, the U.S. has a patchwork of hemp regulations, with commercial production encouraged in some states and limited or banned in others.

Currently, 41 states consider hemp production legal under some circumstances, but the rules for growing, processing and selling vary widely.

Industry players hope that a new Farm Bill will clear up those state-by-state differences and give farmers and processors a national market for the plant and its products, especially high-value CBD extract.

CBD can be extracted from hemp or marijuana, further complicating the legal landscape. Federal drug authorities concede that CBD produced in compliance with the 2014 Farm Bill is not a controlled substance, while reminding states that CBD extracted from marijuana remains illegal, no matter its THC content.

Because the two kinds of CBD are indistinguishable, the hemp industry has been plagued by confusing legal interpretations about the cannabinoid. The Farm Bill’s expiration means the confusion will likely continue – for now.

Hemp industry reacts

All this legal consternation hasn’t stopped the hemp industry from growing exponentially in a few short years.

Total acreage devoted to hemp nearly tripled between 2016 and 2017, from 9,767 acres to 26,217 acres, according to the upcoming 2018 Hemp & CBD Industry Factbook. (Acre counts for 2018 are not available from many states.)

For Chris Husong, director of sales and marketing for Elixinol, a Colorado-based CBD manufacturer with operations in several countries, there’s nothing to do but shrug at the complexities and continue.

“Everyone can move forward with confidence,” he said. “The sky’s not falling.”

Steven Turetsky, managing director of  Shi Farms, a 300-acre hemp farm in southern Colorado, says he hasn’t lost a minute of sleep over a potential hemp rollback caused by the Farm Bill delay.

“States are really interested in this succeeding,” Turetsky said. “Farmers who are seeing decreasing (profit) margins every year are looking for a hedge, a new product. I don’t think there’s any chance this is going away.”

Still work to do

Hemp advocates pressing for a new Farm Bill in Congress say the industry is still under the gun, with Congress needing to renew the national hemp experiment by the end of the year.

Geoff Whaling, head of the National Hemp Association, said that even if the delayed Farm Bill makes no mention of hemp, hemp growers won’t have to worry they are afoul of the law until 2019, when the hemp pilot programs sunset.

Still, the uncertainty is keeping large consumer companies out of the CBD sector, said Orion Inskip, a Seattle attorney who works with the cannabis industry.

Even though the Farm Bill has expired, other budget measures include provisions aimed at preventing the federal government from taking actions against hemp grown under its rules, a measure of assurance for nervous hemp entrepreneurs, he said.

“We’re all balanced on this (budget provision) that protects all,” Inskip said. “Once that shield is gone, things could look very different.”

Kristen Nichols can be reached at kristenn@staging-hempindustrydaily.kinsta.cloud