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Ready to Start Your Hemp Farm? Here Are 5 Things to Keep in Mind

By Lisa M. Schaffer, Esq. | Last updated on

The new 2018 Farm Bill signed into law this week legalizes hemp at the federal level by removing the plant from the Controlled Substance Act. This change was anticipated, after receiving recent backing by Senate Majority Leader Mitch McConnell, but it does come with some strings attached.

If you're ready to start plowing hemp seeds into your fields, here are a few things to keep in mind.

1. Hemp Cannot Contain More Than 0.3 Percent THC

To set the stage, hemp is the cannabis plant. However, legalized hemp cannot contain more than 0.3 percent tetrahydrocannabinol (THC), which is the chemical compound in the plant associated with the plant's "mood-changing" effect. Any hemp containing over 0.3 percent THC would be considered non-hemp cannabis. Therefore, this change will not legalize the cultivation of marijuana as a recreational drug.

2. This Bill Allows for Interstate Commerce of Hemp

Because this legalization is part of a federal bill, hemp will be allowed to cross state lines for the first time. In years past, the U.S. Department of Agriculture (USDA) and state departments of agriculture had run hemp pilot programs for limited purposes. But now hemp can be cultivated broadly, and can cross state lines for commercial or any other legal purpose.

3. Growing Hemp Will Be Heavily Regulated

The state and federal agriculture departments will work closely together to regulate hemp cultivation and production. State agriculture departments must consult with the state's governor and chief law enforcement officer to create a plan to submit to the Secretary of the USDA for approval. And if a state doesn't submit a plan, the USDA will regulate hemp cultivation and production for that state.

4. GRAS Notices Required From FDA

The Federal Drug Administration (FDA) must issue a GRAS certification for food containing THC. This has nothing to do with grass or weed. GRAS stands for Generally Recognized As Safe. To sell food or dietary supplements containing THC, or cannabidiol (CBD) for that matter, makers have to prove to the FDA that their products are safe and work as intended. The FDA has already started accepting GRAS notices from corporation. If the FDA is generous with its GRAS certification, expect CBD food and beverage market to proliferate.

5. State Laws May Still Limit Hemp

Though legalized at the federal level, states will still have the ability to enact laws related to CBD and industrial hemp. Therefore, we could see a patchwork of different regulations across the country. Though interstate commerce is approved, what goes on in each state is subject to state laws. Before crossing state lines with hemp in any form, know the current regulations in that state.

If you have any questions about the legality of your hemp business plan, contact a local business and commercial attorney. Though this change should make it easier for hemp farmers to get banks loans, insurance, and lines of credit, it does come with a series of regulations that may hamper your hemp production. A legal adviser can best help you learn what is, and isn't, allowed under this new Farm Bill.

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