In our recent post, Status of CBD products under Ohio law: Part one, we discussed the perplexing regulations in Ohio that made it effectively illegal to sell hemp and Cannabidiol (CBD) despite passage of the Agriculture Improvement Act of 2018, otherwise known as the 2018 Farm Bill. That landscape has now changed in Ohio with the passage of Senate Bill 57, signed into law by Governor DeWine on July 30, 2019.

The version of Senate Bill 57 that Governor DeWine signed into law has special emergency provisions making the legislation effective immediately upon signing the bill. This post will examine what Senate Bill 57 does to change Ohio’s legal landscape for hemp and CBD and provides an overview of what Ohioans can expect as the hemp program takes shape in Ohio.

What Senate Bill 57 Does

Senate Bill 57 (Hemp Bill), follows the Farm Bill’s lead by removing hemp from the definition of “marihuana” in Ohio’s criminal statutes. By doing so, hemp and hemp-derived CBD are no longer illegal under Ohio state criminal law so long as the hemp derived products contain no more than 0.3 percent THC.

Further, the Hemp Bill tasks the Ohio Department of Agriculture (ODA) with developing a cultivation and processing licensing program to regulate hemp in Ohio. This plan must comply with the minimum standards set forth in the Farm Bill and will ultimately require federal approval from the United States Department of Agriculture (USDA).

Rather than giving the ODA unfettered authority to create a brand new regulatory regime for hemp. the Hemp Bill requires that any licenses granted under the forthcoming ODA program must last for three years. Operators will be required to pay an application fee, an annual licensing fee, and any lab testing fees associated with annual inspections. Operators will also be required to maintain records related to the cultivation or processing of hemp and report that information to ODA or the USDA. The ODA may authorize certain operators, such as universities, to cultivate and process hemp without a license provided such activities are for research purposes only. ODA has six months to draft Ohio’s hemp regulatory rules and faces a steep timeline for getting the program up and running.

While no licenses are currently available to facilitate lawful hemp cultivation and processing in Ohio, selling hemp is now lawful under certain circumstances. Section 928.02(C) of the Hemp Bill allows any person to “possess, buy, or sell hemp or a hemp product” regardless of whether such individuals have a license. The Farm Bill authorized interstate transportation for lawfully cultivated hemp. Accordingly, if hemp is lawfully cultivated in another jurisdiction, it can be sold in Ohio now provided it is “properly inspected.” This latter caveat can be satisfied by contacting the ODA to have your hemp or CBD inspected prior to selling in Ohio.

The Hemp Bill also provides for a Hemp Marketing Program to facilitate hemp marketing similar to other commodity marketing programs authorized under state law; a Hemp Program Fund designed to fund administration and enforcement of Ohio’s hemp program; and specifically authorizes hemp farming to be valued according to its current agricultural use value (CAUV).

What Senate Bill 57 Does Not Do

Notably, while selling hemp and CBD are legal under the parameters discussed above, individuals skirting these carefully defined restrictions can still end up in hot water. Ohio’s Hemp Bill provides for criminal penalties that may be used to enforce the goals of Ohio’s hemp program. Operators that unintentionally violate the licensing requirements will be required to implement a corrective action plan and may have their license revoked. The ODA is required to report more culpable violations to the Ohio Attorney General’s Office, the United States Attorney General’s Office, and the local county prosecutor’s office. And, remember, if the hemp or CBD product has more than 0.3 percent THC, then it remains “marihuana” under state and federal law—a controlled substance for which there are severe criminal penalties in place.

Also, those operating with cultivation and/or processing licenses in Ohio’s medical marijuana control program are expressly precluded from participating in hemp cultivation and processing. Licensed dispensaries may, however, sell hemp and CBD products, though they are no longer the only way to get CBD legally in Ohio.

What’s Next for Ohio’s Hemp and CBD Market?

The ODA quickly posted on its website that “Hemp is Now Legal”. Over the next six months, the ODA will work to promulgate regulations governing Ohio’s hemp licensing program. The ODA’s goal is to have the hemp program up and running for cultivators and processors in Ohio by spring of 2020. However, Ohio must first get approval from the USDA which has yet to promulgate federal regulations outlining the state hemp plan submission process. The USDA has stated that such rules should be available late this year and will be prepared in time for the 2020 growing season.

In the meantime, Columbus, Ohio headquartered Green Growth Brands announced the same day the Hemp Bill was signed that it would begin selling CBD products in mall kiosks. And, as tension over trade policies continues to rise with countries that have historically been major consumers of American agriculture, Ohio farmers may begin looking to hemp as a more stable investment. The bottom line, expect to see CBD products for sale at store near you!