Current and Emerging Regulations for Hemp-Derived Cannabinoids: Implications for the Hemp Industry

The regulatory landscape for hemp-derived cannabinoids is undergoing significant transformations, driven by both federal and state legislative actions. This article provides an analysis of current regulations and proposed changes that could impact the hemp industry. The 2018 Farm Bill initially provided a legal framework for hemp cultivation and the production of non-intoxicating cannabinoids. However, recent amendments to the 2024 Farm Bill paired with major regulatory changes on the state level seek to redefine hemp and increase regulations for hemp consumer goods. This article examines these regulatory shifts, their motivations, and the potential consequences for farmers, producers, and consumers in the hemp industry. The analysis underscores the need for balanced regulations that ensure product safety without stifling industry growth and innovation.

Introduction

The hemp industry has seen substantial growth and transformation since the passage of the 2018 Farm Bill, which legalized the cultivation of hemp and the production of non-intoxicating cannabinoids like cannabidiol (CBD). As the industry matures, the regulatory environment continues to evolve, presenting both opportunities and challenges for stakeholders. This article aims to provide a comprehensive overview of the current and emerging regulations impacting hemp-derived cannabinoids, with a particular focus on recent legislative developments at the federal and state levels.

The Farm Bill is a comprehensive piece of legislation that governs an array of agricultural and food programs in the United States. These bills are typically passed every five years by the US Congress and are critical for setting the country’s agricultural and food policy. The Farm Bill encompasses a wide range of topics including farm subsidies, food assistance programs, agricultural conservation, rural development, and more.

The 2018 Farm Bill: A Foundation for Hemp

The 2018 Farm Bill marked a pivotal moment for the hemp industry, removing hemp (defined as cannabis with less than 0.3% tetrahydrocannabinol [THC]) from the list of controlled substances. This legislation allowed for the legal cultivation, processing, and sale of hemp and its derivatives, leading to a surge in the production and commercialization of hemp-derived products, particularly CBD.

Key Provisions of the 2018 Farm Bill

1. Legalization of Hemp: The bill federally legalized hemp, distinguishing it from cannabis based on its THC content.
2. State and Tribal Plans: States and Native American tribes were required to submit hemp production plans for approval by the United States Department of Agriculture (USDA).
3. Interstate Commerce: The bill protected the interstate commerce of hemp and hemp products, preventing states from prohibiting the transportation of legally produced hemp.

Amendments to the 2024 Farm Bill

Building on the framework established by the 2018 Farm Bill, the 2024 Farm Bill introduces several amendments aimed at addressing regulatory gaps and ensuring the safety and quality of hemp-derived products. These amendments reflect growing concerns over the rapid expansion of the hemp industry and the need for more robust oversight.

Major Amendments

1. Redefinition of Hemp: The 2024 Farm Bill proposes a redefinition of hemp to include not only the plant itself but also any derivatives, extracts, and cannabinoids, regardless of their THC content, as long as the final product contains less than 0.3% THC.
2. Enhanced Testing and Labeling Requirements: To ensure consumer safety, the bill mandates rigorous testing for contaminants and accurate labeling of hemp-derived products.
3. Stricter Enforcement of THC Limits: The amendments emphasize stricter enforcement of THC limits, requiring more frequent and comprehensive testing of hemp crops and products.
4. Research and Development Funding: Increased funding for research into hemp cultivation, processing, and product development is included to support industry innovation and address agricultural challenges.

State-Level Regulatory Changes

While federal legislation provides a broad framework for hemp regulation, states have significant autonomy in implementing and enforcing their own rules. Recent state-level regulatory changes reflect diverse approaches to managing the hemp industry.

California

California has introduced stringent regulations on hemp-derived cannabinoids, particularly CBD. These include:

• Registration and Licensing: Mandatory registration and licensing for all hemp cultivators, processors, and retailers.
• Product Testing and Labeling: Comprehensive testing for contaminants and accurate labeling requirements.
• Age Restrictions: Prohibition of hemp-derived cannabinoid sales to individuals under 21.

New York

New York’s regulatory framework focuses on consumer protection and product quality. Key regulations include:

• Good Manufacturing Practices (GMP): Enforcement of GMP standards for the production of hemp-derived products.
• Transparency and Traceability: Requirements for clear labeling and traceability of hemp products from cultivation to sale.
• Retailer Requirements: Retailers must obtain permits and comply with strict advertising and marketing standards.

Colorado

Colorado remains a leader in hemp regulation, with a focus on fostering industry growth while ensuring public safety. Notable regulations include:

• Hemp Certification Program: Voluntary certification program for hemp producers to promote best practices.
• Research Initiatives: Support for research into hemp cultivation and product development.
• Flexible Licensing: Streamlined licensing process to encourage industry participation.

Implications for the Hemp Industry

The evolving regulatory landscape presents both opportunities and challenges for the hemp industry. The amendments to the 2024 Farm Bill and state-level regulations have significant implications for farmers, producers, and consumers.

Opportunities

1. Improved Product Quality and Safety: Stricter testing and labeling requirements will enhance product quality and safety, fostering consumer trust and market growth.
2. Industry Innovation: Increased funding for research and development will drive innovation in hemp cultivation and product development, opening new market opportunities.
3. Market Expansion: Clear regulatory frameworks can facilitate the expansion of hemp markets domestically and internationally.

Challenges

1. Compliance Costs: Enhanced testing, labeling, and licensing requirements may increase compliance costs for producers, particularly small and medium-sized enterprises.
2. Regulatory Uncertainty: Variations in state regulations can create uncertainty and complexity for businesses operating in multiple jurisdictions.
3. Market Saturation: Rapid market growth and increased competition may lead to market saturation and downward pressure on prices.

Conclusion

The regulatory landscape for hemp-derived cannabinoids is in a state of flux, shaped by ongoing legislative developments at the federal and state levels. The 2018 Farm Bill laid the groundwork for the industry’s growth, but recent amendments to the 2024 Farm Bill and state-level regulatory changes reflect a move towards more stringent oversight to ensure product safety and quality.

These regulatory shifts present both opportunities and challenges for the hemp industry. While enhanced regulations can improve consumer trust and product quality, they also pose significant compliance costs and complexities for businesses. The future success of the hemp industry will depend on balanced regulations that promote innovation and growth while ensuring safety and protecting consumer interests.

As the hemp industry continues to evolve, stakeholders must stay informed about regulatory changes and actively engage in the policymaking process to advocate for fair and effective regulations. By doing so, the hemp industry can achieve sustainable growth and realize its full potential as a valuable component of the agricultural and consumer goods sectors.

About the Columnist

Lo Friesen is the founder, CEO, and Chief Extractor of Heylo. With a background in chemistry and clinical research, Lo was inspired to explore cannabis as a medicine and to enter the emerging industry. She joined Eden Labs, a leading CO₂ extraction equipment manufacturer to support and expand a Research and Development department. There she managed the development of their latest and greatest CO₂ extraction system. In 2017, after working with Eden Labs and another cannabis processor, Lo launched Heylo with a mission to help people get more out of life with cannabis.

How to Cite this Article

Friesen, L., Current and Emerging Regulations for Hemp-Derived Cannabinoids: Implications for the Hemp Industry, Cannabis Science and Technology, 2024, 7(4), 12-15.