Congress has passed the 2018 Farm Bill and President Trump is expected to sign the bill into law. A key part of the bill (once enacted) will legalize hemp cultivation and sale on the federal level – with certain restrictions, of course. The previous farm bill only permitted individual states to develop programs for hemp cultivation.
Hemp is an agricultural commodity that’s used in tens of thousands of products, everything from textiles to industrial products to food. But when we talk about hemp, there are a few things that underwriters and other insurance professional should be aware of.
“Hemp” has a specific definition. Under the bill, hemp is defined as the plant Cannabis sativa L. that contains less than 0.3 percent THC, the cannabinoid that gets users high. THC levels in hemp are so low that they can’t get users high.
Hemp is not marijuana. Hemp is a plant in the genus Cannabis, a genus which includes marijuana and hemp. These two plants are chemically distinct. Marijuana is still illegal under federal law.
Hemp and hemp-derived products can cross state lines. Importantly, hemp can cross state lines in interstate commerce under the 2018 bill. Under the 2014 Farm Bill, only individual states could establish programs for hemp cultivation.
Hemp cultivators will be licensed. Not just anyone can grow hemp. The bill directs state and federal agencies to develop regulatory procedures for licensing hemp cultivators.
Hemp and hemp-derived cannabinoids are non-psychoactive. A popular chemical found in Cannabis plants (including marijuana) is “cannabidiol” (CBD). CBD has some properties like THC but can’t get users high. Hemp-derived CBD is being infused into all sorts of consumers products, from facial creams to chocolate. There’s also at least one cocktail bar in Brooklyn that will add a shot of CBD to your martini.
The FDA has a stance on CBD – and it’s not permissive. But speaking of chocolate, the U.S. Food and Drug Administration (FDA) has said that it’s illegal to sell CBD-added food and food products across state lines. Whether it’s legal to sell CBD-added food within a state depends on that state’s law (this National Law Review article has more information on the issue).