Hemp and Hemp-Derived CBD 

Weekly Inside U.S. Hemp, Issue #2

From the Greenspoon Marder Washington D.C. Office

Greenspoon Marder has an expanded Washington D.C. presence and experience in the hemp and hemp-derived products space. We will be reporting weekly on federal regulatory and Hill developments for hemp and hemp-derived CBD.

In Washington D.C., Jessica Wasserman of Greenspoon Marder and Saphira Galoob of The Liaison Group – a wholly-owned subsidiary of the firm – are speaking daily with the officials at the federal agencies (and Members of Congress and Committee staff) seeking clarification of the issues and the timeline for implementing the hemp provisions of the 2018 Farm Bill.

In this regular blog, we will share our insights and analysis as eyes and ears in Washington.

Guidance from the federal agencies on the new hemp provisions has been slowed by the recent government shutdown and the federal regulatory approaches are only now emerging.

Below is some of the information we have gathered this week.

The key implementing agency for hemp as set out in the 2018 Farm Bill statute is the US Department of Agriculture. This week we learned the following:

  • USDA has been working intensely on clarifying internally how the agency will implement the provisions of the 2018 Farm Bill. At the staff level FAQs to assist the industry have been drafted and await clearance with an expectation that the FAQs will be issued sometime this week.
  • USDA announced that it will hold a listening session for input from stakeholders broadly on the 2018 Farm Bill, which is a more than 600- page document covering programs from price supports to trade promotion to conservation and more. We advised USDA that as a new program, hemp should have a separate listening session and we were informed that USDA will soon announce a stakeholder listening session for only the hemp provisions of the new farm bill, as we requested. This session will allow stakeholders to submit comment to the record before a panel of the USDA officials implementing the hemp program.
  • We reported last week that hemp is now an agricultural commodity but not a “program crop.” This means it is not eligible for price support programs, such as the farm loan program, commodity loans, etc. available to program crops such as wheat, corn and soy. This week we learned that USDA is considering allowing hemp to be eligible for the Noninsured Crop Disaster Assistance Program. NAP provides financial assistance to producers of crops where insurance is not available (even once crop insurance is in place, some counties will likely not be eligible) for the purpose of protecting against natural disasters such as weather, plant disease or insect infection. There are limitations on eligibility based on gross income and caps on annual coverage.

For hemp food products, dietary supplements, cosmetics, and medical devices, Food and Drug Administration regulatory pathways will be critical for the growth of the emerging hemp derived products industry, including the CBD industry.

  • There was a lot of attention this week on an announcement by Commissioner Gottlieb that the FDA will be reviewing broadly the regulation of the dietary supplement industry with an intent to reform the current regulatory approach and how to modernize the underlying statute, DSHEA. The commissioner expressed in his statement the concern that the immense growth of the dietary supplement market since the passage of the primary law governing supplements, 25 years ago may have outpaced the evolution of FDA’s policies and hindered the agency’s capacity to manage emerging risks from bad actors. This reform effort will likely indirectly impact how the CBD industry evolves, but the FDA focus on CBD for now remains on a separate track.
  • FDA has not officially announced but continues to promise stakeholder “hearing” in the near future. FDA will issue a federal register notice prior to the meeting giving 30 days advance notice. The hearing is not a formal hearing and does not mean that FDA will issue a regulation on CBD. In fact, FDA has informally said that they will not be issuing a new regulation in the near term. It is common practice for FDA to hold stakeholder meetings without issuing a subsequent regulation or even a guidance.
  • State policies in Maine, Ohio and New York City that are stricter or differ in some instances from FDA policy on CBD have recently gone into place. FDA has not commented on these policies and the emergence of this patchwork points on the intensifying need for FDA to develop a national regulatory pathway for hemp derived CBD products, which are as of January 1, 2019 no longer prohibited substances by DEA.

The enforcement of the rules for import and export of hemp and hemp derived products is administered by the Department of Homeland Security, Customs and Border Protection (CBP)

  • We received a number of questions this week about whether or not hemp and hemp derived products can be imported into the United States, prompting us to speak with the CBP officials working on implementing the process for importation of hemp now that it is no longer a DEA controlled substance. Legally, as of January 1, 2019, hemp must be allowed as in import in to the United States and a DEA license should no longer be required. We understand that CBP is working on a deadline of this Wednesday to issue its implementation schedule.
  • Whenever there is a change of instructions that comes form CBP headquarter to the field at the various ports of entry, it takes a number of months and longer before the policy is fully communicated to the officials clearing shipments at the ports. We predict that for a period of time, some port official will stop hemp shipments based on the outdated policy. If your shipment is held at customs, we urge you to contact us to assist you to have it released. We have a record of successfully working with CBP to quickly release shipments.