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Leveraging Hemp vs Cannabis

Topic

Hemp, cannabis, same thing, right? Not exactly.

Hemp and cannabis are like cousins and are typically hard to distinguish by first glance. The main differentiating factor between hemp and cannabis is that hemp most commonly is cannabis with less than 0.3% THC in it. Other cannabinoids such as CBD, CBG, and CBN – the pain-relieving substances – are most prevalent and is why the “Hemp Industry” is dominating the “Cannabis Industry” as of 2019.

The effects of hemp are so distant from cannabis that regulations vary all over the world. What are these distinctions specifically in the U.S. and how can you leverage your business in the CBD world instead of the THC world from a compliance standpoint?

Legal Status

As we all know, cannabis is on the controlled substance list in the United States, which simply means it’s an illegal drug. However, hemp is federally legal and regulated in the U.S. under the United States Department of Agriculture. In 2018, the “Farm Bill” was updated and passed allowing this regulation to continue and designating the Agricultural Marketing Service (AMS) to oversee the Hemp Production Program. The biggest change to this bill is that hemp being transferred across state borders faces less risk since hemp is federally decriminalized.

The AMS claims, the “USDA is drafting hemp regulations for publication in the Federal Register and public comment. It is USDA’s goal to have regulations in effect by the fall of 2019 to accommodate the 2020 planting season.”

As we await the final regulation release according to the 2018 Farm Bill update, the industry continues to grow. The way that the bill works is that tribal and state authorities have the power to create programs for their states regarding growing, manufacturing, distributing, and selling. Right now, about 75% of states in the US allow the growing of hemp for commercial, research, or pilot programs. The upcoming Farm Bill is expected to lead to more strict regulations and testing requirements for products in the future.

General Compliance

Unlike the current cannabis market, hemp is fairly unregulated with few requirements. A few requirements for cultivators in California include registering with their county, testing their product to meet the THC limit, controlling and reporting cases of pests, and following any other guidelines presented by the federal government. There are a few restrictions to note as well, such as, it’s prohibited to import plants or seeds from international sources and THC tests higher than 0.3% are grounds for destruction.

There are currently no rules or regulations surrounding the processing, manufacturing, and sale of hemp products, but as mentioned before, the Farm Bill update of 2018 is assumed to mean there may be stricter regulations in the future. Any products for ingestion such as infused food and drink should still follow the relative health jurisdiction in the location applicable to ensure safety of products.

To read more about California’s hemp industry, please click here.

Recommendation

Since many regulations have not been created in general, contact your local and state governments for relevant information and any legal materials available for maximum preparation. If possible, discuss with current hemp participants near you to gather information about good practices and what to anticipate as this industry continues to expand in the regulatory environment. The good news is that hemp is legal and officially off the controlled substance list, which leaves room for innovation, expansion, and successful business planning.

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