Industry experts propose regulation over outright bans, urging Congress to craft a viable framework for the $30 billion hemp market instead of pushing it toward collapse.
Sen. Mitch McConnell (R-KY) is widely viewed as the father of the American hemp industry, given his role as then-Senate Majority Leader in pushing across the finish line the 2018 farm bill that legalized the cannabis variety. But this year, McConnell worked with his prohibitionist counterparts in the House, such as Rep. Andy Harris (R-MD), to reverse course and push for a ban on most hemp products.
While tactically yielding to opposition from fellow Kentucky Republican Sen. Rand Paul by removing hemp ban language from the Senate version of the farm bill, McConnell then managed to get it included in the legislation to end the federal shutdown last week, and it is now law. That means that 51 weeks from now, the ban will go into effect, with devastating consequences for the near-$30 billion hemp products industry—unless something changes in the meantime.
Josh Schneider is among hemp industry experts who are working on Capitol Hill this week to make those changes happen. The founder of Cultivaris Hemp, which provides starter plants to American hemp farmers, Schneider has played a key role in the development of federal and state-level hemp policy and has seen his regulatory framework incorporated into House and Senate farm bill drafts. Now, he is pushing for Congress to reject the prohibitionist approach and replace it with a regulatory scheme that will protect both consumers and the industry.
"The ban will kill the industry dead—fiber and grain will not escape unharmed," Schneider told the American Hemp Monitor. "It would be an extinction-level event for a lot of small businesses."
But he suggested that may not be what McConnell wants to achieve by supporting the looming ban. "It may be that McConnell intended it as a way to bring everybody to the table," he said. "Everyone assured him that nothing bad would happen with hemp legalization, but the advent of Delta 8 THC and synthetic cannabinoids created the image that the plant wasn't the innocuous CBD-only thing he had been sold. While the ban he pushed through is fairly complete and very, very few products will survive it, I think it is a reasonable interpretation to assume that he desires to bring the entire industry into the discussion. Now that the industry is focused, we will all have to come together to find a solution," he added.
"Now, we have been given a time frame and an opportunity to resolve the issues of concern to Congress," said Schneider. He and his allies, including organizations such as the US Hemp Roundtable, the National Hemp Council, the National Hemp Association, and the National Herbal Products Association, have created a regulatory vehicle they claim will achieve just that.
That schema is laid out in a document released last week titled Pushing Progress. The authors say their objective in the next farm bill is to "clearly define industrial and floral hemp separately and direct the US Department of Agriculture (USDA) to manage hemp production based on the intended end use of the material. This bifurcation protects agricultural producers growing grain and fiber while establishing a clear regulatory pathway for cannabinoid-producing hemp," they add.
The proposal would require additional language under the Energy & Commerce Committee "to secure a complete solution to the challenges facing today's hemp industry," they note.
The farm bill language would define industrial (fiber, grain) and floral (cannabinoid-producing) hemp and clarify that USDA is in charge of all agricultural hemp production. The farm agency would administer licenses that align crop production with the intended end use. The proposed farm bill language would also raise the total THC threshold for hemp from 0.3 percent to 1.0 percent "to reflect real-world crop variability."
The proposed Energy & Commerce Committee language would divide regulatory authority over hemp products by end use. It would amend the 1994 Dietary Supplement Health and Education Act (DSHEA) to clearly grant the Food & Drug Administration (FDA) authority over non-intoxicating cannabinoids, such as CBD. Intoxicating hemp products would fall under the purview of the Bureau of Alcohol, Tobacco, and Firearms (BATF) Tax and Trade Bureau (TTB). And synthetic cannabinoids—"compounds not naturally present in the cannabis plant"—would continue to be under the authority of the DEA as controlled substances.
Rather than set arbitrary ceilings on the amount of THC allowed per package, the proposed language would require the TTB to set limits, manufacturing standards, labeling, and age restrictions in consultation with the FDA.
"This is an opportunity to build a resilient and durable regulatory system," said Schneider on Tuesday. "We've never really worked to bring people together around a unified framework. Congress wants us unified, and this document can help bring people together and resolve many of the questions. I think we have a pathway forward.
On Wednesday, after working the halls of Congress, Schneider told the Monitor he is seeing "a strong appetite for reasonable legislation around pathways for non-impairing cannabinoids under the DSHEA framework of dietary supplements, and for an impairing cannabinoid system regulated by TTB"
Located at the base of the Siskiyou Mountains along the California-Oregon border, Williams, Oregon, is a long way from Washington, DC. But for Cedar and Madrone Grey, the owners of Siskiyou Sungrown Cannabis, which produces cannabis oil and hemp CBD products for the wellness market, the looming congressional ban hits close to home. They assign some of the blame not to prohibitionists but to industry actors.
"I believe that this law was an inevitable consequence of the proliferation of synthetic cannabinoid products being marketed to minors under the 2018 farm bill," Cedar Grey told the Monitor. "I'm disappointed that the industry didn’t work harder to regulate itself, and it did itself a disservice by looking the other way and ignoring the proliferation of synthetic cannabinoid products."
While Grey said he generally supported the farm bill language because it was "mostly reasonable and helpful for patients and consumers," he raised strong concerns about the 0.4 milligram per package THC limit for hemp-derived products.
"That is going to remove all full-spectrum (CBD plus THC) products from the market, and that is unfortunate because they are the most effective in treating a number of medical conditions," Grey said. "If the law is not amended, the industry will have to pivot to zero-THC products that are not as effective. The fix that is needed is to raise that limit to 40 milligrams per container. Then the law would support a healthy hemp industry. If they don't do that, there's going to be a lot of bloodshed in the industry. All of our products are full-spectrum. If this law were to take effect today, all our products would be banned."
While non-intoxicating hemp CBD products are largely collateral damage in the looming ban, intoxicating hemp products are in the bullseye. They need not be banned, Grey said, but regulated.
"I have no problem with people wanting to get intoxicated, but intoxicating hemp products should be subject to minimal safety limits, such as age limitations, testing, and labeling," he said. "History has shown that when not regulated, bad actors tend to market harmful products in the course of profiteering. When a new industry is developing, we should have rigorous testing until we have standards," Grey added.
"In the broader cannabis industry, the Oregon market needed to start with regular testing," he continued. "There were all kinds of poisonous products, but now the regulated cannabis market has the cleanest supply chain in the country."
As lawmakers back in Washington ponder their options, they would be wise to remember the old mantra that you can't regulate what you prohibit.