The Future of Hemp: A Look at the Latest Developments
Since the launch of the cannabis industry in the United States, the industry’s growth has been a great case study of how market forces and innovation repeatedly lap regulatory processes.
As government regulators look to the 2024 Farm Bill to rein in the adaptations producers have made to the 2018 Farm Bill, especially regarding intoxicating hemp, it appears that the market is primed to go through significant changes yet again.
A Brief Look at Recent Hemp History
The passage of the 2018 Farm Bill came with a fairly simple statute on what qualified as hemp: any cannabis plant that had less than 0.3% THC by dry weight was legal. This statute also allowed for products that qualified under the law to be shipped across state lines.
Given the simple standard, it was assumed that the threshold would limit more intoxicating THC products from hitting the market since the concentration of THC in hemp was so low. But, as producers continued to innovate with hemp—by purifying cannabinoids from hemp and chemically converting high concentration cannabinoids, such as CBD, into other cannabinoids (“isomers,” and “derivatives”) —intoxicating hemp derived cannabinoids started hitting store shelves across the country.
In 2020, that meant Delta-8 THC proliferated. Delta-8 THC, or “Delta-8” for short, is milder than its Delta-9 THC cousin-cannabinoid, but is only present in cannabis or hemp plants in minute amounts. But Delta-8 can be and is synthesized from CBD. As the intoxicating hemp market grew, a number of high-inducing cannabinoids became available online and in mostly non-cannabis states. These are either synthesized from hemp cannabinoids, like CBD, or produced with precursors not derived from hemp at all.
Fast forward to 2024, and consumers across the country are purchasing intoxicating hemp products in “hemp shops” and other common retail locations like gas stations and convenience stores. This outcome is not quite what legislators had in mind when they passed the 2018 Farm Bill ostensibly intending to support the production of agricultural hemp and manufactured hemp products that were not intended to be intoxicating.
With the 2024 Farm Bill coming up in the very near future, we can expect this particular topic to be front and center with legislators.
The Latest Developments in Hemp and the 2024 Farm Bill
As the expiration date for the 2018 Farm Bill gets closer the battle over hemp-derived products is currently playing out in states across America - most notably in states where adult use and medical marijuana is illegal. Here are just a few of the most recent highlights.
Anti-intoxicating hemp amendments proposed for the 2024 Farm Bill
President Biden extended the 2018 Farm Bill, which was set to expire in 2022, through the end of 2024. As part of a package by the House Agriculture Committee, an amendment was proposed that would change the definition of hemp “to only include naturally occurring naturally derived, and non intoxicating” hemp-derived cannabinoids. This would jeopardize the existing business structure of likely hundreds, if not thousands of current producers.
While most of what’s happening now are committee rumblings that may not make the chamber-wide bill that gets voted on, it’s causing brands and advocacy organizations to speak up in order to protect their existing business models.
THC-A businesses in Tennessee are ready to sue
In the Volunteer State, legislators passed legislation on July 1, 2024 around the manufacturing, sale, and distribution of hemp-derived cannabinoids. The Tennessee Department of Agriculture is still preparing those final rules.
Existing Tennessee retailers with hemp-derived products on their shelves are now wondering what will happen to their businesses when the final rules are released. Many businesses are threatening to sue should these changes come into play. Enforcement of the new regulations would start in 2025.
New Jersey updates regulations around intoxicating hemp products
In New Jersey, state legislators are attempting to have hemp-derived cannabinoid products regulated by the state’s Cannabis Regulatory Commission. Although this commission was originally created to oversee the adult-use and medical cannabis industry in the state, they are proposing its mandate be extended to hemp.
The proposed legislation would essentially ban hemp-derived cannabinoids from being sold until the state regulatory commission updated the regulations. Given the slow speed at which the state commission originally approved the adult-use industry, this has caused concern for existing hemp producers and retailers in the state.
South Dakota law bars production of intoxicating hemp products
The 2018 Farm Bill didn’t ban individual states from regulating hemp and hemp-derived products, which is why South Dakota Governor Kristi Noem has implemented a state-wide ban with House Bill 1125.
As the bill made its way through South Dakota’s state legislature, it waffled on whether to include products made with hemp. The bill went from targeting hemp-derived products, to not targeting hemp-derived products.
Governor Noem signed the bill in March with the original language, and regulations went into effect July 1. Now, businesses throughout South Dakota that are producing and selling these hemp-derived products are seeking an injunction because the law could cause irreparable harm to their businesses.
What’s Next for Intoxicating Hemp?
The 2018 Farm Bill was an expansive statute that was light on specifics, which has created an environment with both non-intoxicating and intoxicating hemp-derived products widely available.
What does all this mean for the future of hemp? Federally, it’s unclear what standards will be put in place. As states like South Dakota and Tennessee try to regulate these products at the state level, operators in the flourishing hemp cannabinoid sector hope for the development of reasonable federal standards that will not suffocate current producers out of the existing market.
On the other side of the discussion are the stakeholders in adult-use cannabis marketplaces, including those states with regulated adult-use systems,who continue to lobby for all “intoxicating” hemp products to be regulated within regulated adult-use systems. It’s cannabis vs. cannabis and the outcome is currently undetermined.