The document provides an overview of industrial hemp and CBD laws in the United States. It discusses the history of hemp, current federal laws including the 2014 Farm Bill and 2018 Farm Bill, as well as state laws regarding hemp cultivation and CBD sales. The 2018 Farm Bill establishes a federal framework for regulating hemp production and excludes hemp from the definition of marijuana under the Controlled Substances Act. However, the FDA maintains that CBD cannot be marketed as a dietary supplement or food ingredient due to its approval as a prescription drug. State laws on hemp vary widely, from research-only programs to commercial cultivation and sales of hemp and CBD products.

1. INDUSTRIAL HEMP AND CBD:
THESE OPPORTUNITIES ARE
BIGGERTHANYOU THINK
- HERE ISWHY
Shawn Hauser
Vicente Sederberg LLC

2. §Quick History What is Hemp and CBD?
§Federal Law
§CSA
§2014 Farm Bill
§FFDCA
§State Law
§2018 Farm Bill
Hemp

3. HEMP AND
CBD: QUICK
HISTORY Hemp is the non-psychoactive variety of the cannabis plant grown for
fiber/oilseed used to produce over 30,000 different types of products
More than 30 nations grow hemp as an agricultural commodity and
sell on the world market
Under the purview of US drug laws for close to 80 years
Approximately 30,000 product uses
US Hemp sales estimated at close to $1 billion dollars annually

4. HEMP AND
CBD: QUICK
HISTORY For decades hemp products could be sold in the US but not grown
here
Legal under federal and state law, with limitations
40 states have pilot programs or laws removing barriers to
production.
2018 Farm Bill would regulate hemp as an agricultural commodity,
not a drug product,
“2018” Farm Bill, if passed, will truly end federal hemp prohibition

6. How much of the hemp sold in
the US is currently imported?
A.55%
B. 70%
C. 85%
D.90%

7. FEDERAL LAW

8. Marijuana is defined as “all parts of the plant Cannabis sativa L.,
whether growing or not; the seeds thereof; the resin extracted from
any part of such plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of such plant, its seeds or resin.
The Controlled Substances Act of 1970
Such term does not include the mature stalks of such plant, fiber
produced from such stalks, oil or cake made from the seeds of
such plant, any other compound, manufacture, salt, derivative,
mixture, or preparation of such mature stalks (except the resin
extracted therefrom), fiber, oil, or cake, or the sterilized seed of
such plant which is incapable of germination.”

9. 2014 FARM BILL§Defines Industrial Hemp and
allows cultivation for research
purposes under state agricultural
pilot programs
§Allows, but doesn’t require states
to experiment with hemp
cultivation
§Allows interstate commercial
activity for the purpose of
market research
§Remains in place despite
expiration of 2014 Farm Bill in
September
§Narrowly interpreted by DEA
§Significant deference in
regulation and enforcement given
to states

10. Industrial Hemp is defined in the 2014 Farm Bill
and the laws of most states as:
“the plant Cannabis Sativa L., and any part of such
plant, whether growing or not, with a delt-9 THC
concentration of not more than 0.3% on a dry weight
basis.”
Products derived from industrial hemp cultivated in compliance
with state pilot programs under the 2014 Farm Bill are
preempted from CSA control.

11. 2014 FARM BILL: PERSPECTIVE OF DEA, FDA, & USDA - 2016
STATEMENT OF PRINCIPLES
ü Narrow Interpretation of Permitted Commercial Activity.
­ Can be sold in interstate commerce for marketing research, but not for
purpose of general commercial activity, ONLY in states or among states
with agricultural pilot programs; not in states which prohibit such activity
ü Attempts to Narrow Definition of Industrial Hemp
ü Confirms FFDCA Applicability

12. Source: National
Conference of
State Legislators
40
States
with
Hemp
Laws

13. U.S.
Hemp
Crop
Report

14. IS CBD A CONTROLLED
SUBSTANCE?
q The Source Rule
q DEA Final Rule & Clarification to Final Rule
q HIA v DEA III
“The new drug code“ includes only those extracts
that fall within the CSA definition of marijuana” and
“does not include materials or products that are
excluded from the definition of marijuana set forth in
the [CSA].”

15. FEDERAL APPROPRIATIONS RIDER
ü Budgetary protection
ü Protects lawful activity
ü Prohibits use of federal funds in contravention of 2014 Farm Bill
or to prohibit…including transportation, processing, and sale of
hemp grown under the Farm Bill within or outside state in which
hemp is cultivated
ü Expired September 30, 2018 and continued until December 8,
2018

16. PRIORITIES IN FEDERAL ENFORCEMENT
Acquisition of viable seeds without DEA permit
­ Medical claims made in the marketing of CBD products
­ Interstate transfers of hemp-derived CBD consumables
­ Cooperation with State Enforcement
­ Cultivation outside of state agricultural pilot program

17. FEDERAL FOOD, DRUG AND COSMETIC ACT
(FFDCA)

18. FFDCA & HEMP
Certain Hemp Seed, Oils, and other
GRAS Hemp ProductsPermissible in
Food/Dietary Supplements/Cosmetics
CBD Precluded From Regulation as a
Food Ingredient or Dietary
Supplementdue to Initiationof Public
Drug Trials on CBD
CannabisBased Drug Epidiolex and
Generic Versions are Schedule V
Drugs

19. FDA POSITION ON CBD IN FOOD & DIETARY
SUPPLEMENTS
CBD cannot be a food ingredient or a dietary
supplement because CBD has been approved as a new
drug, and previously was the subject of FDA-approved
investigational new drug trials, before it was marketed
in commerce
Potential Challenges to FDA Position?

20. State Law

21. PATCHWORK OF STATE LAWS
Research Only Research and
Commercial
Sale
Participation
by Universities
Only
Participation
by Private
Parties
Prohibitions on
CBD and other
Consumable
Goods

22. HEMP IN MICHIGAN
Only Department of Agriculture and Rural Development /institutions
of higher education to grow for limited research purposes
No processing or commercial sale
CBD is marijuana, and no CBD sales outside of medical marijuana
regulatory regime (LARA May 11, 2018 guidance)
2018 Ballot Initiative & pending legislation would expand program

23. MICHIGAN-CHANGES IN LAW?
Proposal I: would legalize the cultivation, processing, distribution, and sale of industrial hemp
HB 6630, 6631, and 6380: Would:
-Expand program to create hemp licensing regime for growers, processors, handlers
(HB 6630)
-Define industrial hemp to include all parts of the cannabis plant under .3% AND its
derivatives, extracts and cannabinoids. State definition includes commodities and products
and “topical or indigestible animal and consumer products”
-Exclude industrial hemp from state definition of marijuana (HB 6631)
-Amend marijuana laws to allow certain licensees to handle, process, and test hemp
Michigan-Changes in Law?

24. HB 6630, 6631, and 6380: Would:
-Prohibit and preempt local ordinances
-Require MDARD to promulgate rules for the hemp pilot program
-Require LARA to finalize rules by March 2019 for selling hemp from provisioning
centers to patients

25. 2018 FARM BILL

26. ØAmends the CSA to exclude hemp and THC derived from hemp
ØEstablishes federal regulatory framework for hemp
ØDefines hemp to include “all derivatives, extracts, cannabinoids, isomers, acids,
salts, and salts of isomers, whether growing or not, with a delta-9
tetrahydrocannabinol concentration of not more than 0.3 percent on a dry
weight basis …”
ØProvides minimum standards for state programs subject to USDA approval,
and federal regulation for states that do not adopt programs
ØAllows farmers eligibility for research grants and crop insurance
ØDoes not amend the FFDCA
THE 2018 FARM BILL

27. Prohibits participations by persons with felony convictions
Gives states, tribal authorities and US territories regulatory
authority
Sets forth approval process for state and tribal plans, and
federal licensure for states with no plans
Establishes minimum enforcement standards for violations,
including corrective action plans
Repeals 7606 of Agricultural Act of 2014 (2014 Farm Bill
hemp provisions) 1 year after adoption of federal regulations
2018
FARM
BILL

28. Hemp Essential Oil
Hemp Milk
Hemp Seed Burgers

29. Hemp Jacket
Hemp Sunglasses
Hemp Liquid Soap
Hemp Shoes

30. Hemp House
Hemp-crete

31. QUESTIONS?