US Senators recently proposed a law called the Cannabis Administration and Opportunity Act (CAOA) to legalize cannabis at the federal level. But industry representatives say the wording of the new bill could also have a major influence on the hemp industry.
Last month, U.S. Senate Majority Leader Chuck Schumer, DN.Y., Senate Finance Committee Chairman Ron Wyden, D-Ore., And Senator Cory Booker, DN.J., spoke published a draft federal law on the legalization of cannabis.
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However, CAOA also makes multiple references to hemp and hemp-derived products and raises questions about them, said Rick Fox, co-chair of the National Industrial Hemp Council (NIHC) government relations committee and Vermont CEO and co-founder. . Meristem Farms.
For example, the proponents of the bill are encouraging separate federal agencies to regulate hemp and cannabis. They also support the designation of cannabidiol (CBD) as a supplement with recommended serving limits.
The Senate Sponsors’ Offices are seeking public comment by September 1. Soliciting comments is not required from the legislature, but from the executive agencies, Fox said, adding, “They really go above and beyond what is asked of them to try to wrap their heads around this.
Hemp THC Limits
Cannabis exceeding 0.3% delta-9 tetrahydrocannabinol (THC) would be removed from the Controlled Substances Act under CAOA. The question remains whether “hemp” needs to be redefined, said Fox, which produces CBD-dominant hemp flower products, or “resin hemp,” at Meristem Farms, which has branches in Vermont. , Michigan and California.
The Agriculture Improvement Act of 2018 (the Farm Bill 2018) defined hemp as Cannabis sativa not exceeding 0.3% delta-9 THC with no mention of limits on other intoxicating THC isomers such as delta-8 THC. The USDA Final Rule on Hemp further defines hemp by its “total THC” content, which also takes into account decarboxylated tetrahydrocannabinolic acid (THCA) which has been converted to delta-9 THC. In addition, the final rule states: “Delta-8 THC is not related to the 0.3% delta-9 THC limit or” post-decarboxylation delta-9 THC “which are defined and required in this rule. “
“Obviously, the industry is paying a lot of attention these days to other cannabinoids besides delta-9, like delta-8,” Fox said. “So should the federal definition of hemp be changed to better align with what is being done in this bill?” Should it include all tetrahydrocannabinols and set the threshold at 1%, for example, which is what the National Association of State Departments of Agriculture recommended, … by voting to endorse the recommendation in February? “
The NIHC also supports increasing the THC limit for hemp from 0.3% to 1%. “We’ve been pushing for this from the start because it’s better for the farmers,” Fox said. “Many varieties easily exceed 0.3 but not more than 1%. This benefits farmers financially as the CBD content in hemp is directly correlated with the total amount of THC in the plant. When you limit [THC] at 0.3 you are also essentially limiting CBD yields.
Fox points out that Dr. Ernest Small, Ph.D., a researcher whose cannabis work in the 1970s influenced the establishment of the US limit of 0.3% THC for hemp, recently said that a limit of 1% was more reasonable.
“The Committee is concerned that the level of allowable THC content in hemp may be arbitrary and constitute a burden on hemp growers that is not supported by scientific evidence. The committee directs the USDA to work with the Department of Health and Human Services and the Drug Enforcement Administration to study and report to Congress on whether there is a scientific basis for the current limit of [0.3] percentage of THC in hemp and suggest alternative levels if necessary. “
Taxes and permits
The CAOA would require wholesalers of cannabis products to obtain a license from the Office of Alcohol and Tobacco Tax and Commerce (TTB) of the US Department of the Treasury, while the USDA would retain regulatory control over the hemp production.
“I don’t know if TTB spends a lot of time on the farms or dealing with the farmers,” Fox said. “I think we should consider how the wine grapes, the grains to be distilled [alcohol] and the tobacco leaf is regulated, before and after the farm, and see if there could be a better approach here.
CAOA’s proposal also includes an excise tax on cannabis, dropping from 10% for the first calendar year of passage of the bill and the following year, to 15% in the third year of adoption, 20% the fourth year and 25% the fifth year. As it is currently drafted, this tax would not apply to hemp, which falls under a separate definition.
Fox said he believes hemp should not be taxed in the same way as cannabis. “We all want to make sure that… hemp resin can be made available in retail in a way that is not as limited as a high THC content,” he said.
CBD in foods and supplements
CAOA would also help create a legal path for inclusion of CBD in dietary supplements, removing “the ban on marketing CBD as a dietary supplement” and requiring “certain dietary supplements … to submit notifications of new ones. Food Ingredients (NDI) to the FDA, ”according to the CASLPA Discussion Draft.
However, Fox said CBD cannot be legally allowed in food in current CAOA language. “This proposal advances a House bill that would designate hemp-derived CBD as a supplement, but only as a supplement,” Fox said. “There is a Senate bill that would effectively allow all hemp products, including CBD, in supplements and foods, and there are many reasons why this approach would be better. We will definitely mention it to the sponsorship offices here. “
NIHCS spokesperson Larry Farnsworth said Hemp producer that not allowing CBD in food would cause disruption in the market, as many farmers produce CBD for food.
Citing statistics collected from NIHC economists, Farnsworth said: “In the United States, 45% of all hemp is grown for CBD; 45% is used for food, 40% for cosmetics and 15% for supplements.
The CAOA states that producers of CBD supplements would be required to manufacture supplements that meet daily serving limits to be determined.
Fox said he believes serving sizes for supplements should be clearly stated so consumers know how much they are consuming. However, the NIHC does not have a formal position on Maximum Daily Values, as more research on CBD dosages is needed.
Some herbal supplements have servings marked with an asterisk indicating that a maximum daily value has not been established because they can affect different consumers, Fox said.
“I think there are a lot of actors who would say that the same logic [could apply] CBD and hemp, if not cannabis at large, ”Fox said, offering his personal opinion. “But the political reality is that people have concerns, so if [having maximum daily values] helps them overcome their worries, so be it. “
Speaking more broadly about CAOA, Fox said NIHC was pleased with sponsors’ willingness to seek and respond to feedback from the hemp and cannabis industries, adding: manage awareness and solicit feedback.