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The Current Legal and Economic Status of Hemp in the USA

08 Feb, 2018

The Current Legal and Economic Status of Hemp in the USA

 

legality of hemp

 

 If there were a topic that has remained pervasive in the past fifty years, that would be the topic of hemp and marijuana, and their influence in not only the United States of America but the world at large. The first thing that has to be said, which is often overlooked is that hemp and marijuana are not the same thing. They are both cannabis plants, under the botanical name cannabis sativa. Cannabis plants contain a unique compound called cannabinoids. Studies have shown that there over 60 different types of cannabinoids but THC is most well-known and extensively researched.

Marijuana is more common and widely consumed. Hemp, however, is an industrial plant and contains a minimal amount of tetrahydrocannabinol or THC, which is the principal agent responsible for that euphoric high one gets from smoking weed.

In spite of a very long history of cultivation and use in the United States, dating as far back as the early sixties, the cultivation of the crop has been federally outlawed for almost eighty years, but with the passing of the 2014 Farm bill by the Senate, hemp is once again being legally cultivated on American soil. The bill clarifies the differences between industrial hemp and marijuana as well as repeals federal laws prohibiting American farmers from cultivating hemp in commercial amounts.

Federal Action

Signed into law on February 7, 2014, by President Obama, the Farm Bill, also known as the Agricultural Act of 2014, the bill allows states, or relevant departments of agriculture, higher institutions of learning to independently decide if they want to grow hemp industrially for research purposes.

The law allows universities and state departments of agriculture to grow or cultivate industrial hemp if:

“(1) the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and

(2) The growing or cultivating of industrial hemp is allowed under the laws of the state in which such institution of higher education or state department of agriculture is located and such research occurs.”

The law also requires that the grow sites to be certified by—and registered with—their state.

State Action

Since its implementation, more than 30 states have proposed and passed laws regarding industrial hemp, and twenty of those states have approved laws allowing for its commercial production, giving growers rights beyond those listed in the Farm Bill. Colorado leads the way with this. In 2013, Colorado legalized the cultivation of Industrial Hemp. All farmers had to do was pay for a permit from the state, provide the GPS coordinates of their farms and verify the THC levels in their crops stayed low.

2018

Hemp is currently legal to be cultivated in the following states:  Colorado, New York, Washington, Nevada, Connecticut, Nebraska, Delaware, , Illinois, , Kentucky, Maine, Michigan, Minnesota, Missouri, Montana, Oregon, California, North Carolina, North Dakota, , South Carolina, Tennessee, Utah, Vermont, Maryland, West Virginia and Virginia, Indiana, Hawaii.

North Dakota, Hawaii, Minnesota Kentucky, Oregon, Indiana, and Tennessee States that have cultivated hemp solely for research purposes and three states: Colorado, Oregon, Vermont have licensed her farmers to cultivate hemp under state law.

Currently, over thirty countries allow the cultivation of Industrial Hemp. The United States is one of the few developed country in the world where Industrial hemp is not currently freely cultivated. Despite the laws passed allowing for the cultivation of industrial hemp, farmers are still required to seek Drug Enforcement Agency (DEA) approval before seeds are sown. No other crop has to go through this hurdle.

Despite laws regulating the cultivation of the crop, product derivatives of hemp, for example, fibers, textiles, insulation materials, supplements, skincare products, animal feed, food, paper, beverages, clothing, and building materials, are legal to purchase in every state in the United States. Hemp is estimated to be made use of in over thirty thousand products cutting through recycling, automotive, personal care, cosmetics, agricultural, textile, food, and construction industries.

Hemp Legislation Update

In 2017, states (38 of them) considered their amending legislation as it relates to Industrial Hemp. The bills ranged from seeking more clarity on existing hemp laws to establishing new licensing requirements. Governors of New Mexico and Arizona blackballed new legislation which would have established new research programs while fifteen states enacted legislation in 2017 —Colorado, Nevada, Washington, Florida, North Dakota, New York, South Carolina, Tennessee, Hawaii, Virginia, Wisconsin, Oregon and Wyoming. Florida, Arkansas,  Wisconsin and Virginia West authorized new research or pilot programs.

Hemp and the Economy

According to a report by the Hemp Business Journal and Vote Hemp, the total retail value of hemp products sold in the U.S. in 2016 was $688 million.

The boost in the sale of hemp-related products was aided in no small part by the successful cultivation schemes following the passing of the 2014 Farm bill.

Hemp Business Journal estimates the hemp industry will grow to $1.8 billion in sales by 2020, led by hemp food, body care, and CBD-based products. The data demonstrates the hemp industry is growing quickly at 22% five-year CAGR and being led by food and body care products, with Hemp CBD products showing a 53% AGR," said Sean Murphy, the Founder, and Publisher of the Journal.

Hemp import to the United States

Seeds are allowed to be imported into the United States (U.S.) if sterilized. Non-sterilized hemp seeds remain a schedule 1 controlled substance and therefore may only be imported into the U.S. with a Drug Enforcement Agency (DEA), application for Permit to Import Controlled Substances/Domestic and/or Scientific Purposes form. Hemp products such as clothing hats, shirts, shoes, cosmetics, lotion, paper, rope, twine, yarn, shampoo, and soap, (containing sterilized cannabis seeds or oils extracted from the seeds), etc. may be imported into the U.S.

Studies illustrate the total value of imported selected hemp products in the U.S. from 1996 to 2015. In 1996, the total import value of hemp products came to some 1.4 million U.S. dollars and at 74.1 million U.S. dollars in 2015.