The farm bill which has caused a lot of debate and has been criticized has been passed into law by the US Congress. This bill is estimated to be worth about $867 billion. For many onlookers, this bill is the result of the consistent lobbying and pressure from farmers and other agriculturalists who have suffered a great deal from the trade war between the US and China.
This vote which was passed by a 386-47 margin is set to bring in a lot of changes. One of the significant changes which this bill would bring is that it will officially legalize the growth and distribution of hemp. It would also result in the provision of various types and forms of subsidies to farmers who are currently in the United States. It would also ensure that the proposed food stamps would not be signed into law anytime soon. So what does this mean for the nation in general?
HEMP IS LEGALIZED
One of the longest running issues has finally been resolved. The legalization of hemp has come a long way. When the former bill was first enacted into law in 2014, it made a lot of changes to the way hemp was viewed. For one thing, it led to the relaxation of the restrictions which have been put in place by the law. This bill has allowed a fair portion of states in the United States to cultivate and develop plantations for the purpose of growing the hemp plant.
However, this bill which has been signed into law is believed to have taken things to a whole new level. According to the Senate majority leader, this bill is expected to ensure that the hemp plant is recognized as a legal agricultural item or commodity. This would open up a lot of opportunities for farmers who grow hemp. One of them is an opportunity for them to obtain crop insurance on the hemp plants. The legalization of the hemp products would also help to remove any lingering doubt that individuals in America would have in relation to the various products which have been produced from the ingredients from the hemp plant. The hemp product would from now on be under the strict watch of the Department of Agriculture.
This would be good news to the farmers who have suffered great losses since the long trade war with China commenced early this year.
COMPANIES THAT WOULD BE AFFECTED
While individual farmers would be affected by this change, the group of people who would see the most changes includes the various companies that use hemp. The CBD products which are gotten from the Hemp plant keeps on growing in terms of popularity and demand. For example, in 2017 alone, it is estimated the number of hemp plants which were cultivated by the farmers in the United States alone was worth over $800 million. With the legalization of hemp, the demand for these products would be expected to skyrocket, and the main beneficiaries of this rise would be the cannabis companies.
Before the farm bill was passed, most cannabis companies had immense issues when it came to listing themselves on the stock exchange due to the fact that hemp was not yet officially recognized by the US federal authorities. Now with this new bill, it would now be possible for these companies to use the funds which have been gotten from their hemp ventures in their public companies. These companies would be allowed to be listed on the stock exchange market.
What this means in other words, that cannabis companies would now have the luxury of having more people trying to invest in their business due to their new legal status which has been awarded to them by the US government. For companies who are deep into the products of the various CBD products, they would also no doubt get a boost in the number of customers who would be visiting their stores after the legalization has been announced. Some of the corporations which would no doubt enjoy their newfound legalization would be the New Age Beverages Corp which has already made their plans to develop beverages which would have CBD integrated into it. It is also believed that other companies such as Coca-Cola would also make moves to also produce drinks which have been infused with CBD.
All these moves which are estimated to be made have raised the opportunity for growth in this sector. It has been estimated and reported that the market would be worth about $260 million by the time 2022 rolls by.
Another set of people who would no doubt benefit from this farm bill that has just been passed are the pharmaceutical companies. They would now be able to make gains through the sale of drugs which have the CBD elements in them without the fear of selling drugs which has restrictions based on them.
CHALLENGES OF THE FARM BILL
While most of the news for the hemp sector and the impact of the farm bill is all rosy, there are still some concerns and challenges which the hemp industry is going to face. One of them is going to be with the industry which is responsible for food and drug administration in the US which is popularly known as the FDA.
As of now, the use of any ingredient which is gotten from hemp plant on food is considered to be illegal. Therefore, it is not also available to be used as a dietary supplement in any form. However, the one good thing which most companies and sellers of hemp would gain from this is that the FDA is not hot on the heels of any companies which sells products linked with CBD. It remains to be seen as to how the FDA would react once the hemp industry starts to expand. Whether it would take a stricter approach or whether it would formally recognize the use of CBD is a matter which we can only watch and see
OTHER THINGS ON THE BILL
The farm bill also made references to subsidies which would be granted to farmers as earlier mentioned. These subsidies would be passed to many relations of farmers even if they are not even part of the work which goes on in the field. In other words, nieces, nephews, aunts and so much more would hope to benefit from the subsidies which would be provided by the government.
However, this move has been condemned by several groups including the working group of environmentalists who have described a giveaway by the government which would prove to be wasteful. However, many congressmen and women belonging to the Republican Party have argued their viewpoint that this expansion of the subsidies would only encourage more people to farm.
There is no doubt that the farm bill is a good development especially to the economy of the country. It would lead to many good developments to the hemp industry. However, there are still certain things that would have to be addressed with several other bodies such as the FDA to make sure there are no contradictions. However, it is definitely a good start.