JD Supra

6 November 2024

Proposed language in the next Farm Bill could substantially impact the hemp industry in the United States. The Farm Bill is an omnibus bill that governs agriculture and food and is renewed approximately every five years. The 2018 Farm Bill expired in 2023, but Congress enacted a one-year extension. Iowa Agribusiness Radio Network reports that Senator Chuck Grassley (R-IA) believes that the 2018 Farm Bill will be extended for another year.

The 2018 Farm Bill removed hemp from the statutory definition of “marijuana” and defined hemp as all parts of the cannabis plant—and all of its derivatives, extracts, and cannabinoids—with a delta-9 tetrahydrocannabinol (THC) concentration of less than 0.3 percent. 7 U.S.C. §1639o. The presence of other cannabinoids, including other forms of THC, does not factor into the classification of hemp. Delta-9 THC gives users the euphoric high associated with marijuana and is one of dozens of cannabinoids found in the cannabis plant.

Intoxicating hemp-derived products have become popular, including delta-8 THC. Delta-8 THC naturally occurs in small quantities in hemp but can be converted from hemp-derived cannabidiol (CBD). It has similar effects to delta-9 THC but is not as potent. According to Cannabis Business Times, delta-8 products generated $1.2 billion in sales in 2023.

In a case involving trademark infringement for a hemp-derived product, the Ninth Circuit noted that “the only statutory metric for distinguishing controlled marijuana from legal hemp is the delta-9 THC concentration level. In addition, the definition extends beyond just the plant to ‘all derivatives, extracts, [and] cannabinoids.’” AK Futures LLC v. Boyd St. Distro, LLC, 35 F.4th 682, 690 (9th Cir. 2022) (citations omitted). The presence of delta-8, THCA, or other cannabinoids does not turn a hemp product into a marijuana product. According to the court, if “Congress inadvertently created a loophole legalizing [] products containing delta-8 THC, then it is for Congress to fix its mistake.”

Proposed language to the 2024 Farm Bill would close that alleged loophole. The House Agriculture Committee passed a 2024 Farm Bill draft on May 23, 2024 (H.R. 8467), that included an amendment that would exclude the following from the definition of hemp:

• hemp-derived products containing cannabinoids not naturally produced in the cannabis plant or that are naturally produced but were synthesized or manufactured outside of the plant
• quantifiable amounts of any THC or any cannabinoids that have or are marketed to have similar effects as THC

This language would remove delta-8 products, and any other intoxicating cannabinoids, from the definition of hemp and close the loophole that has allowed these products to proliferate.

Advocates for the hemp industry are rightfully concerned that the proposed language could destroy the hemp cannabinoid market. Many in the hemp world are pushing for regulatory oversite of hemp rather than an outright ban. The hemp industry will closely watch the Farm Bill over the next year. The language could make or break the industry.

This item originally appeared in the ABA Business Law Section’s October 2024 in Brief: Business Regulation & Regulated Industries.

Source:

https://www.jdsupra.com/legalnews/major-changes-could-be-in-store-for-4508582/