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  • Debby Goldsberry

The Federal Hemp Phenomenon - A Five-Part Series Part Four: Hemp Laws and Regulations

Updated: Jul 5

The landscape of hemp laws in the United States has evolved rapidly over the past few years. With the passage of the 2018 Farm Bill, which legalized the cultivation of hemp and removed it from the list of controlled substances, states have been navigating their regulations to align with federal standards. This Digamma Consulting article, part of our five-part series,  The Federal Hemp Phenomenon, overviews the current state of hemp laws nationwide and highlights recent congressional actions impacting the industry. 

Federal Hemp Laws

The  2018 Farm Bill was a significant milestone for the hemp industry. It allowed for the legal cultivation of hemp (defined as cannabis containing less than 0.3% THC) across the United States. This legislation provided a framework for states to regulate hemp production and created opportunities for farmers, researchers, and businesses.

Under federal law, the U.S. Department of Agriculture (USDA) oversees hemp cultivation by establishing the U.S. Domestic Hemp Production Program. States and Indian tribes can submit plans to the USDA for approval, detailing how they intend to monitor and regulate hemp production. The USDA also set guidelines for testing, sampling, and disposing of non-compliant plants.

Historical Context of Cannabis Laws in the U.S.

Understanding the evolution of cannabis laws requires a chronological perspective that highlights significant federal and state regulations. These are a few key legislative actions that have shaped the current federal cannabis landscape.

This act effectively outlawed hemp production in the United States by imposing strict regulations and taxes on hemp production, sale, and distribution. It was the first significant federal law to regulate hemp and other cannabis plants

During World War II, the U.S. government encouraged farmers to grow hemp for the war effort through the "Hemp for Victory" campaign. Hemp was used to produce rope, parachutes, and other military supplies. This initiative temporarily lifted restrictions on hemp cultivation.

This act classified all cannabis varieties, including hemp, as Schedule I controlled substances, making their cultivation illegal. It was a significant law that hindered the growth and research of industrial hemp in the U.S.

Section 7606 of this bill allowed for state agriculture departments and institutions of higher education to grow and research hemp under pilot programs. It marked the first federal relaxation of hemp restrictions since the Controlled Substances Act. 

Recent Congressional Actions

The journey of cannabis laws in the U.S. reflects a complex interplay of regulatory, economic, and social factors. From the Marijuana Tax Act of 1937 to the 2018 Farm Bill and beyond, federal and state regulations have continuously evolved. Recent congressional actions indicate a growing recognition of the need for a coherent regulatory framework that balances industry growth with consumer safety. As the legal landscape continues to develop, the future of cannabis in America promises to be dynamic and transformative.

Recent congressional actions have focused on refining and improving the regulatory environment for hemp. Key legislative efforts include:

Farm Bill of 2018

The 2018 Farm Bill legalized hemp (cannabis with less than 0.3% THC) federally, distinguishing it from marijuana and opening the door for the legal production of CBD. This bill clarified the legal status of hemp and its derivatives, significantly impacting the cannabis industry.

This proposed bill addresses several issues faced by the hemp industry, including raising the THC limit for hemp from 0.3% to 1%. It also seeks to streamline the testing process and clarify the legal status of hemp-derived products.

Although primarily focused on the broader cannabis industry, it would significantly impact hemp businesses by allowing them access to traditional banking services. This would alleviate many financial challenges faced by hemp producers and processors.

Introduced to enhance the economic viability of the hemp industry, the HEMP Act proposes to revise the definition of hemp to include higher THC thresholds during production, provided the final product remains below 0.3% THC. This act also aims to simplify the testing requirements and support hemp farmers.

The 2024 Farm Bill would limit hemp production, including a more stringent THC testing requirement, including both delta-9 THC and THCA in the 0.3% THC limit calculation, rendering many current hemp strains non-compliant. The bill also seeks to enforce stricter licensing procedures and background checks for hemp farmers to enhance regulatory oversight and ensure product safety​. 

State-by-State Hemp Laws

While the 2018 Farm Bill set the stage for nationwide hemp cultivation, each state has the authority to develop its own regulations. As of 2024, most states have implemented hemp programs, though the specifics vary widely:

  • California has a robust hemp program that aligns with federal guidelines. The state allows for both indoor and outdoor cultivation and has stringent testing requirements to ensure compliance with THC limits.

  • Known for its progressive stance on cannabis, Colorado has a well-established hemp industry. The state permits the use of hemp in food products and dietary supplements, provided they meet safety standards.

  • Texas legalized hemp production in 2019. The state has been developing its regulatory framework and is focusing on ensuring that hemp-derived products, such as CBD, are safe for consumers.

  • Historically a major hemp producer, Kentucky has again embraced the crop. The state supports farmers and has been a leader in hemp research.

  • New York's hemp program emphasizes industrial and medicinal uses. The state has invested in research to explore the potential of hemp in various industries.

  • Massachusetts requires hemp growers and processors to obtain licenses and comply with strict guidelines, including inspections and THC level testing, to ensure the THC level remains below 0.3%​. Massachusetts also prohibits the sale of raw hemp flowers and imposes specific policies on hemp-derived products to maintain regulatory compliance and public safety​.

Challenges and Opportunities during Federal Hemp Phenomenon

Despite the progress, the hemp industry faces several challenges. Variability in state regulations and federal guidelines can confuse hemp producers and processors. Uniform standards across states would help stabilize the market. Another significant challenge is ensuring that hemp products meet the required THC levels. Inconsistent testing protocols can lead to discrepancies and potential legal issues.

The hemp industry is still in its infancy, and developing robust markets for hemp-derived products, including textiles, biofuels, and health supplements, remains a priority. The laws regarding hemp in the United States are dynamic and continuously evolving. Federal and state governments are working to create a balanced regulatory environment that supports the hemp industry's growth while ensuring consumer safety. 

Digamma Consulting's primary concern is safety and potency testing for the hemp industry due to the critical need to ensure consumer protection and regulatory compliance. Accurate testing for THC levels is essential to differentiate legal hemp from illegal marijuana and to maintain the integrity of the hemp market. Additionally, ensuring the absence of contaminants such as pesticides and heavy metals is vital to protect public health and build consumer trust in hemp products​.

As new legislation is introduced and existing laws are refined, Digamma Consulting is positive that the future of hemp in America looks promising, with opportunities for innovation, economic growth, and sustainability. That said, stay tuned for the final part of Digamma Consulting’s five-part series, The Federal Hemp Phenomenon series, “Part Five: The Modern Hemp Crisis., to dive into the concerns faced by the industry today.


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