Under mounting pressure from American farmers, Congress passed a five-year $867 billion package called the Agriculture Improvement Act of 2018, commonly known as the 2018 Farm Bill. This piece of legislation picked up where the previous Farm Bill left off in September 2018 but featured several major overhauls, including an enormous victory for the production of CBD by way of hemp legalization.

What Did the 2018 Farm Bill Do?

The short version is this bill allocates billions of dollars in subsidies to American farmers who have seen commodity prices decline due to the U.S. trade dispute with China. Additional benefits include boosting farmers markets, rejecting stricter food stamp limits, and legalizing hemp at the federal level.

Federal Legalization of Hemp

One of the understated portions of the 2018 Farm Bill is the legalization of the cultivation, production, sale, and possession of hemp at the federal level, which took effect on January 1, 2019. Prior to the current legislation being enacted, hemp was categorized as a Schedule I substance under the Controlled Substances Act, the main federal law regulating prohibited drugs and narcotics.

It’s worth noting the 2018 Farm Bill isn’t the first to address hemp. In the 2014 version, a pilot research program regarding industrial hemp was created. In turn, the 2018 Farm Bill followed its predecessor’s criteria in terms of hemp plant composition—the total dry weight of the Cannabis sativa L. and any part of the plant with a delta-9 THC concentration had to have less than or equal to 0.3%.

Hemp Legalization at State Level

While hemp became legal at the federal level, the 2018 Farm Bill also dictates that power to regulate and limit the production of hemp and hemp-related products is held by individual states and Native American tribes. There’s one exception, though. States and tribes cannot limit the shipment or transportation of hemp or hemp products through their territories.

What Makes Hemp Legalization Important?

There are several reasons, but most importantly for American farmers, the 2018 Farm Bill creates an opportunity for business growth. Hemp is easy to produce, is sustainable, and can help a farmer plug into a variety of industries, ranging from textiles and food products to CBD harvesting and more.

In 2017 (nearly an entire year prior to hemp’s legalization), hemp product retail sales topped $820 million. Following the passage of the 2018 Farm Bill, current forecasts project hemp to become a $1 billion industry by 2020.

While it’s possible to derive CBD from both hemp and marijuana plants, the legalization of hemp incentivizes the CBD industry to utilize hemp as the primary source for their full spectrum and isolate products due to its low THC content.

Why Was Hemp Illegal?

Prior to the 2018 Farm Bill, hemp was placed into the same category as illicit substances due to its cannabinoid composition, which includes trace amounts of THC (tetrahydrocannabinol), the psychoactive cannabinoid in marijuana plants.

A big misunderstanding regarding CBD is due to its molecular composition, which happens to be an exact copy of THC. However, due to a very small difference in the structure, each compound reacts to the human endocannabinoid system (ECS) differently.

The ECS is made up of two main receptors called cannabinoid 1 (CB1) and cannabinoid 2 (CB2). While most CB1 receptors are found in the human brain, CB2 receptors are found in the immune and central nervous systems. This is a crucial point to understand because, although CBD and THC bind to CB2 receptors the same way, they do NOT bond with CB1 receptors the same. THC has the ability to bond directly to CB1 receptors, allowing a person to experience the “high” feeling. Conversely, CBD cannot directly bond to CB1 receptors, and either inhibits or negates the psychoactive effects of the THC.

What This Means for CBD

The 2018 Farm Bill put in place the potential for American farmers to dig into the relatively untapped hemp market. Time will tell as to how the government at the state level will choose to handle the new industry from a legal standpoint, but the federal floodgate for CBD derivation is wide open, which means production of new CBD products as alternatives to traditional medicines may continue to rise.

Want to learn more CBD? Check out these guides to understanding the types of CBD and how cannabinoids work from Frontier Jackson.

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