2018 Farm Bill Removes Hemp from Controlled Substances Act
The new law federally legalizes industrial hemp and its derivatives, including CBD, shifting primary regulatory authority to the Department of Agriculture and the states.
The Agriculture Improvement Act of 2018, known as the 2018 Farm Bill, was signed into law, fundamentally altering the legal landscape for cannabis. The bill explicitly removes hemp from the definition of marijuana under the Controlled Substances Act (CSA), thereby legalizing the plant and its derivatives at the federal level. To qualify as hemp, the plant and its products, including extracts and cannabinoids, must contain a delta-9 tetrahydrocannabinol (THC) concentration of no more than 0.3 percent on a dry weight basis.
This change provides legal certainty for the rapidly growing market for cannabidiol (CBD) products derived from hemp. Primary regulatory authority over the crop shifts to the Department of Agriculture, and states are authorized to create their own regulatory plans for cultivation. The law also expressly permits the interstate transportation of hemp. Sophisticated clients in the agriculture, consumer goods, banking, and insurance sectors must now navigate a new federal and state-by-state regulatory framework. Counsel should monitor forthcoming rulemaking from the USDA on state plan approvals and the FDA, which is expected to increase its oversight of CBD products marketed for human consumption.