The USDA Legal Opinion on the 2018 Farm Bill & CBD
Written By Anne van Leynseele of Zuber Lawler Law Firm
A few days ago, the United States Department of Agriculture’s (USDA) General Counsel, Stephen Alexander Vaden, distributed to the Secretary of Agriculture a memorandum regarding the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”), and made a number of significant conclusions regarding the 2018 Farm Bill and the legal position of hemp. In that memorandum, he makes some notable conclusions, including:
- Hemp is no longer a controlled substance, as of enactment of the 2018 Farm Bill on December 20, 2018;
- Before states can legally distribute and produce under federal law, the USDA needs to publish regulations, approve of State/tribal plans or the growers need to operate under the pilot program;
- After the USDA publishes regulations or approves a State/tribal plan, States/tribes may not prohibit interstate transportation of hemp through their jurisdiction;
- States may not prohibit interstate transportation of hemp lawfully produced under the 2014 Farm Bill;
- States or tribes may prohibit production of hemp in their jurisdiction, even if they cannot prohibit transportation of hemp;
- The 2018 Farm Bill does not alter the FDA or HHS Secretary’s authority to regulate hemp under applicable FDA laws;
- The 2018 Farm Bill places restrictions on the production of hemp by felons convicted of controlled substances offenses;
- Section 12619 of the 2018 Farm Bill removes hemp and THC derived from hemp from the definitions of “marihuana” and “tetrahydrocannabinols” in the Federal Controlled Substances Act.
Many of the USDA General Counsel’s conclusions regarding the 2018 Farm Bill make significant forward progress toward establishing a robust hemp and CBD market in the US contingent on the USDA either approving state-programs and/or creating their own hemp regulations. Equally significant, however, is the General Counsel’s reading of Section 12619 as it pertains to hemp-derived THC.
While Section 12619 was noted after the passing of the 2018 Farm Bill by some eagle-eyed observers, the General Counsel’s conclusion regarding Section 12619 is that the 2018 Farm Bill removed hemp and hemp-derived THC from the definitions in the Federal Controlled Substances Act (the “CSA”). The General Counsel goes on to conclude that the removal of hemp and THC derived from hemp from the CSA is “self-executing” and requires no further legislative action (such as amending the CSA) in order to execute the 2018 Farm Bill’s changes to Schedule I of the CSA, making the change effective as of December 20, 2018.
By removing hemp and hemp-derived THC from the CSA and its subsequent acknowledgment by the USDA’s General Counsel, a significant loophole for interstate distribution of THC products may have been created. As a result of the changes made by the 2018 Farm Bill, it is arguable that hemp products produced under a USDA or USDA-approved program are now no longer bound by the 0.3% THC limit as they previously were. In effect, because it will be impossible in practice for law enforcement to distinguish hemp-derived THC from cannabis-derived THC, the federal government may be forced to act towards descheduling and legalization.
We will be closely watching some of the federal legislation such as the Safe Banking Act, the STATES Act, and HR 2843 in the coming weeks and months to see how the USDA’s opinion affects the progress towards legalization.
About Anne van Leynseele:
Of Counsel, Zuber Lawler
Anne van Leynseele is a cannabis regulatory and deal attorney, often working across sovereign borders. She advises multi-state and multi-national cannabis clients on governance, compliance, licensing, acquisition, asset management, and import/export matters. Ms. van Leynseele also counsels her clients on cannabis political policy as it develops across the nation and around the world. She is a leading expert on the topic of hemp. Prior to joining Zuber Lawler, Ms. van Leynseele spent four years as a federal attorney advisor in Washington, D.C.
About Zuber Lawler:
Zuber Lawler focuses on intellectual property, IPO’s, deals, regulatory work and litigation. The firm manages matters for clients throughout the world from offices in Chicago, Los Angeles, New York and Silicon Valley. Zuber Lawler represents a long list of Fortune companies, global funds and government entities. The firm has also worked with cannabis clients for over 12 years, and currently represent some of the industry’s leading companies. www.zuberlawler.com