INDUSTRY UPDATES
January 04, 2023
2022 Year-In-Review
It’s been three years since COVID struck our nation. As the economy continues to recover, so does the hemp industry. It was a slow and steady process, but hemp managed to make up some ground in 2022.
Across the states, the U.S. Hemp Roundtable worked with lawmakers on two significant issues: how we treat intoxicating hemp-derived products, such as delta-8 THC, and how we protect non-intoxicating hemp products, such as CBD, from onerous regulation. On Capitol Hill, the Roundtable continued to call on Congress to require the Food and Drug Administration (FDA) to regulate CBD and other hemp extracts while laying the groundwork for key advancements for the industry as part of the upcoming 2023 Farm Bill.
The progress we made will serve as a necessary precursor for what we hope to accomplish in what could be a monumental 2023, given the pending Farm Bill.
Check out our 6th annual year-in-review recapping our work in 2022!
State Advocacy
Over the past year, the Roundtable tracked nearly five dozen proposed hemp-related policies, regulations or pieces of legislation across 28 states. In about a dozen cases, we became heavily involved to promote or prevent changes that would have a tremendous impact on the industry.
Some states debated and resolved issues that the industry had been facing for years. For example, we engaged with the California Department of Public Health (CDPH) to ensure that out-of-state hemp products, such as CBD, could be sold in-state. In Tennessee, Hemp Supporters led by the Tennessee Growers Coalition and the Hemp Association of Tennessee, helped pass legislation that allows the interstate transportation of hemp concentrate containing up to 5% THC with the purpose of being remediated into hemp products with legal amounts of THC. Just as North Carolina’s hemp program was set to expire, Hemp Supporters were able to secure SB 455, which aligned state production under the 2018 Farm Bill and firmly legalized hemp and hemp products. In Utah, Hemp Supporters helped pass a bill that provides veterinarians the ability to discuss hemp and CBD products with pet owners. Unfortunately, we were not able to block passage of HB 385 in Utah, which made it illegal to add CBD to conventional foods or beverages.
But in most state capitols across the country, two issues predominated in the discussion on hemp: (1) What is the appropriate way to treat intoxicating hemp-derived products, such as delta-8 THC; and (2) in so doing, how do we protect non-intoxicating hemp products like CBD from onerous regulation?
With intoxicating products, three options emerged:
- Let’s criminalize them!
- Let’s do nothing and allow them to proliferate unregulated!
- Let’s come up with a reasonable plan to regulate them akin to adult-use cannabis and keep them out of the hands of children!
Most of the industry preferred the third path, and working with state and regional advocacy groups, the Roundtable took this mission to legislators and regulators.
The most promising efforts may be coming in Kentucky, where hemp’s historical roots emerged and now where strong political leadership will help ensure its future. Kentucky Gov. Andy Beshear in November 2022 issued an executive order calling for the regulation of delta-8 THC products; the Roundtable has been asked to work with his staff to craft responsible rules. In South Dakota, HB 1292 restricted delta-8 product sales to adults ages 21 and up.
Unfortunately, the effort to crack down on intoxicating compounds has extended to non-intoxicating cannabinoids like CBD. For example, in Virginia, Colorado, Louisiana and Minnesota, the industry opposed bills that extended age restrictions to non-intoxicating hemp products.
Negotiations in Virginia and Colorado resulted in the establishment of taskforces in each state to study and provide direction on the manufacture and sale of intoxicating hemp products. Roundtable written and in-person testimony was cited heavily in a draft report from the Virginia taskforce, and Roundtable board members provided comprehensive recommendations to the taskforce in Colorado. The industry will continue working in Louisiana to remove an 18 or older age restriction on any hemp product containing THC. Meanwhile, in Minnesota lawmakers legalized edibles and drinks with up to 5 mg of THC from hemp, while also establishing an inappropriate 21 or older age restriction for all products containing hemp extracts.
The Roundtable has also started identifying states where new hemp bills and regulations are likely to make headlines, like a pre-filed bill in Texas that prohibits the purchase of consumable hemp products containing synthetically derived THCs or any THC exceeding 0.3% on a dry weight basis.
Federal Advocacy
Hemp continued to face headwinds in Washington, D.C., with midterm elections and large government spending bills taking up most of the attention. Still, the Roundtable gained some traction during an April fly-in and September fly-in, when members met with dozens of congressional leaders and staff to discuss top legislative priorities. From hemp production to manufacturing and retail sales, the industry has an extensive agenda:
Regulate CBD Now — It might sound like a broken record, but after four years, the hemp industry is finally hearing a chorus from Congress calling on the FDA to regulate CBD products. Unfortunately, the FDA keeps pointing the finger back, blaming current law along with safety concerns for lack of action (despite recent CBD studies demonstrating otherwise). Hemp Supporters had hoped that the appointment of Dr. Robert Califf as FDA commissioner – who apologized for years of FDA inaction – along with former cannabis regulator Norman Birenbaum as a senior public health adviser indicated that the agency was ready to regulate CBD and other hemp-derived cannabinoids. According to an interview Birenbaum gave to the Wall Street Journal, it could be true, with the FDA claiming that within a few months it will release a regulatory assessment of CBD and other hemp-derived products, and whether that will require new agency rules or new legislation from Congress.
However, recent FDA warnings to food and beverage companies raise concerns regarding the agency’s possible regulatory approach, so Hemp Supporters prefer Congress take action. There were three federal bills — HR 841, HR 6134 and S 1698 — that established FDA regulatory pathways for non-intoxicating hemp products like CBD. HR 841, a bill that would regulate CBD as a dietary supplement, boasted bipartisan support from 46 co-sponsors (33 Democrats and 13 Republicans). Another House bill, HR 6134, had 13 co-sponsors (9 Democrats and 4 Republicans) and would establish standards for CBD in foods and beverages. S 1698, with five co-sponsors, would regulate CBD in both dietary supplements and food and beverages. Stakeholders hope to get language from one of these bills secured in the 2023 Farm Bill. Conversations this year provide confidence it could happen.
In July, U.S. Hemp Roundtable Vice President Eric Wang testified at a House Agriculture Committee hearing during which committee leaders concurred that Congress should make regulating CBD a priority as part of the new Farm Bill. Rep. Jim Baird, R-Ind., ranking member of the House Agriculture Subcommittee on Biotechnology, Horticulture, and Research, stated, “We’ve heard a lot of great recommendations for the 2023 Farm Bill here, and one that I’d like to add is that the FDA hasn’t really had any kind of regulatory framework for hemp-derived CBD, so I would encourage us to include that in our discussions about the 2023 Farm Bill” — to which subcommittee Chairwoman Stacey Plaskett, D-V.I., responded, “Thank you, and I agree wholeheartedly with that assessment.” Rep. James Comer, R-Ky., who will become chairman of the U.S. House Oversight and Reform Committee in January 2023, later led questioning during a cannabis-related hearing about the lack of an FDA regulatory framework for CBD.
The general consensus from Congress is that the FDA needs to regulate CBD and that it’s just a matter of making it a priority in 2023. The FDA, on the other hand, remains reluctant and could put the hemp industry at risk with an inappropriate regulatory approach. The Roundtable remains bullish on this issue and believes 2023 will be the year we secure a solution.
Regulate Intoxicating Cannabinoids/Keep Them Out Of The Hands of Minors — As if the regulation of CBD weren’t complicated enough, a growing number of intoxicating hemp-derived products, such as delta-8 THC, are being sold at retail without regulation, oftentimes to children, prompting health emergency warnings from the FDA and the Centers for Disease Control and Prevention.
As previously mentioned, many states have attempted to take action, resulting in a patchwork of inconsistent laws across the country. The Roundtable strongly supports a forthcoming amendment to HR 6645, the Hemp Advancement Act, which would create a federal commission to define scientific levels of intoxication, to allow that intoxicating products would be strictly regulated akin to adult-use cannabis and kept out of the reach of minors.
Improve Hemp Production Rules — The Hemp Advancement Act was introduced by Rep. Chellie Pingree, D-Maine, in February, with the aim of easing regulatory barriers and inapt burdens on hemp farmers posed by provisions in the 2018 Farm Bill. The measure would raise the THC limit for hemp crops from 0.3% to 1.0%, while also protecting in-process hemp extract that temporarily exceeds intoxication levels. It would also expand the number of laboratories that test for THC by removing the DEA registration requirement. Another effort, the Value the Seed campaign, would provide regulatory relief to farmers who use Certified seed that protects against spiking THC levels. The Roundtable is advocating that language from the Hemp Advancement Act and the Value the Seed Campaign be incorporated into the 2023 Farm Bill. We will also be working with the Hemp Feed Coalition to develop legislative language to promote the use of hemp in animal feed.
Secure SAFE Banking For Hemp and CBD Businesses — Although hemp was federally legalized under the 2018 Farm Bill, many farmers and business owners involved in the industry still struggle to find financial institutions to work with them — especially when it comes to CBD businesses. The Secure and Fair Enforcement (SAFE) Banking Act would ensure that all legal cannabis businesses, including hemp and CBD retailers and producers, have access to financial services. The measure would also support small and minority-owned cannabis businesses by providing more opportunities and an even financial playing field.
Although the U.S. House has passed SAFE Banking in some form SEVEN times, the legislation continues to be stalled by the Senate. Lead bill sponsor Rep. Ed Perlmutter, D-Colo., worked tirelessly to try to get the legislation passed before his retirement. We appreciate his dedicated efforts. Just last month, the Roundtable called on individuals in the hemp industry to provide testimony on the need for SAFE Banking, hoping the measure might have a chance in the omnibus spending bill. With no luck in 2022, the industry this year will pick up where it left off, putting pressure on the Senate to pass SAFE Banking once and for all.
Promote Sustainability and Social Equity — As the hemp industry seeks to expand beyond cannabinoid-based products, sustainable hemp fiber production has the potential to open up new markets while helping fight climate change, but additional research and investment is needed. Specifically, the Roundtable seeks to promote more opportunities that intersect sustainability and social equity, such as the industry-supported climate-smart commodities project at Tennessee State University, which received nearly $5 million from the USDA for sustainable hemp fiber research and to support underserved producers.
We are proud to have supported this grant effort by organizing work sessions and strategy development, and by building in a project to establish a sustainability certification program administered by the U.S. Hemp Authority.
Additionally, the Roundtable is advocating to increase the number of USDA Centers of Excellence at the nation’s Historically Black Colleges and Universities (HBCUs) from six to 10 and will work with the agency to promote expanded hemp research at these critical institutions. Most important, we strongly oppose the ban that prevents convicted drug felons from obtaining a hemp license. If you’ve paid your time, you should be able to grow a perfectly legal crop. We are promoting a provision within the Hemp Advancement Act that would lift the felon ban and allow all farmers to access this economic opportunity.
Looking Ahead
With the Farm Bill on the legislative docket, 2023 should be a pivotal year for the hemp industry. Just as the 2014 Farm Bill provided for hemp pilot projects and the 2018 Farm Bill permanently legalized hemp, this year’s version could prove monumental for farmers and businesses.
Given the tremendous bipartisan support for the industry – and recent FDA smoke signals indicating regulation is imminent – there is optimism about the prospect of the FDA finally regulating CBD products, as well as about passage of SAFE Banking and securing provisions in the Hemp Advancement Act in the upcoming Farm Bill. We also look forward to more investment into hemp fiber and to a focus on social equity.
It’s been four years of hard work since the 2018 Farm Bill legalized hemp. We’re ready to see that work now come to fruition for the benefit of the hemp industry.
