The Law Office of Kimberly R. Simms works with businesses who are interested in or operating within the hemp and CBD industry. While the laws vary across the county, the California Department of Food and Agriculture is developing a program to regulate commercial production of industrial hemp in California. The Law Office of Kimberly R. Simms provides counsel to help clients understand the ever-changing legal landscape of the hemp and CBD industry. Our services include analyzing local and state regulations for hemp and CBD businesses, business formation and business transactional documents and services.
This summary is for educational information only and does not constitute legal advice.
In 2014 Congress passed the Farm Bill. The Farm Bill authorizes the cultivation of industrial hemp, which is defined as any part of the cannabis sativa L. plant possessing no more than .3% THC (the psychoactive cannabinoid commonly associated with cannabis). However, the Farm Bill only allows for state departments of agriculture, universities, and colleges to cultivate hemp and requires these entities to be located in a state that regulates hemp cultivation. The Farm Bill is up for renewal in 2018 and is expected to pass, as it is a very bi-partisan bill.
Hemp products include: construction materials, paper products, biodegradable plastics, fuel, and many others. However, due to the DEA’s prohibition on issuing permits, most of the hemp products in the U.S. are typically imported from overseas.
In 2013, California passed the California Industrial Hemp Farming Act (the “Hemp Act”). Currently, the CDFA is developing a program to administer the state’s Hemp Act and it’s expected that a regulated system will be implemented in 2019. Until this program is developed, there is no current avenue to register for a hemp cultivation permit in California. Therefore, all industrial hemp operations and CBD products in the CA marketplace are not compliant with the Farm Bill, regardless of the THC level of the products.
Hemp Derived CBD
Despite the fact that CBD products can be found online and in almost every state in the country, the legality of CBD products remains uncertain. The Farm Bill creates a framework for federal CBD products, so long as the product contains no more than .3% of THC concentration.
However, on January 13, 2017 the DEA issued a ruling effectively classifying CBDs as a Schedule 1 Drug under the Controlled Substance Act. Pro-hemp Petitioners have filled a lawsuit against the DEA’s rule with the Ninth Circuit Court of Appeals challenging this position.
Sadly, the DEA is not the only government agency seeking to rein in the CBD market. The Food and Drug Administration (the “FDA”) has also aggressively issued warning letters to companies making medical claims about their CBD products. While many would argue that CBDs should be treated like dietary supplements, similar to fish oil, the FDA considers CBD extracts to be a new drug requiring FDCA approval. As such, anyone selling or marketing CBD products should consult with legal counsel in order to ensure they are advertising in a compliant manner.