Dec 16, 2018 at 9:06AM
Hemp! Hemp! Hooray! Hemp is Legal as Congress Passes the 2018 Farm Bill
As we near the finish line for 2018, one thing is for certain: It’s been a game-changing year for the cannabis industry.
In October, following nine decades of prohibition, Canada officially legalized recreational marijuana for adults. Although it’s going to take a few years for Canadian growers to get fully up to speed, as well as allow Health Canada time to approve new cultivation licenses and sales permits, this is an industry that could generate in the neighborhood of $5 billion in annual sales by the early part of the next decade.
This was also a year that saw continued expansion in the United States, where marijuana is still a Schedule I drug — i.e., wholly illegal, prone to abuse, and not recognized as having any medical benefits — at the federal level. During midterm elections, residents in Utah and Missouri voted in favor of statewide medical cannabis initiatives, bringing the total number of states to have legalized in some capacity to 32. Meanwhile, Vermont and Michigan became the respective 9th and 10th states during the year to OK adult-use weed.
And the breakthroughs just keep on coming.
The Farm Bill is a signature away from becoming law
On Tuesday, the Senate voted overwhelmingly (87 to 13) to approve the $867 billion Farm Bill, followed by a landslide vote on Wednesday by the House (369 to 47). This is a bill designed to expand farm subsidies and provide permanent funding for farmers’ markets and local food programs.
Perhaps more important to the investment community and the cannabis movement, it would also legalize products made from hemp and cannabidiol (CBD) from the hemp plant. Cannabidiol is the nonpsychoactive cannabinoid best known for its perceived medical benefits. Unlike tetrahydrocannabinol (THC), it does not get the user high.
Hemp itself has many industrial uses. It can be refined and used in paper, clothing, plastics, paint, insulation, and even animal feed. It’s also a plant that tends to be rich in CBD production with minimal THC content. This makes it a perfect alternative for CBD production as opposed to extracting CBD from the cannabis plant. According to an analysis from the Brightfield Group, the CBD market is expected to grow by 147% per annum, from $591 million in 2018 to an estimated $22 billion by 2022.
In addition to legalizing the production of hemp and easing access to CBD, it would also free up hemp-based business to more freely deal with banks. As a reminder, financial institutions have mostly kept their distance from any businesses involved with THC or CBD, since they’re both tightly regulated by the federal government.
With the passage of the Farm Bill in both houses of Congress, it’ll now make its way to President Trump’s desk for his approval and signature. Trump has already expressed support for the bill, suggesting that passage of the Farm Bill is simply a formality at this point.