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California hemp businesses cheered when the Agricultural Improvement Act of 2018 (“2018 Farm Bill”) approved federal expansion of legalized hemp and hemp-derived products – including CBD (cannabidiol). But when mapping supply chains that cross state borders, Los Angeles hemp business lawyers urge caution.
This may seem a bit confusing, given that section 10114(b) of the 2018 Farm Bill expressly states that no state or Indian Tribe has the authority to bar transportation or shipment of hemp or hemp-derived products across boarders, so long as the products meet the criteria of section 10113.
Why Interstate Hemp Shipping Requires Caution
The problem, as our Los Angeles hemp business attorneys can explain, is that the protection provided herein to hemp farmers and distributors has to do with the fact that last year’s Farm Bill section on hemp transportation is expressly contingent on the previous section. That provision requires federal oversight of hemp production by the USDA, responsible for rubber-stamping state and Native American Tribal regulatory systems that cover hemp production. Such plans must by law be submitted to the federal agency. If a state hasn’t already approved hemp farming, it is to use the framework drafted by the USDA.
Yet so far, the federal government hasn’t approved any state plan, nor has it crafted its own for states with no hemp law. That could change; the USDA hasn’t expressly refused to do this. However unless and until it does, it’s important to bear in mind that hemp and its CBD oil extract are still considered a Schedule I narcotic under the Controlled Substances Act – especially since the U.S. Drug Enforcement Administration issued a new rule expressly indicating hemp and its derivative products are also to be grouped with the THC-containing marijuana.
That doesn’t necessarily mean the government will crack down on hemp distributors sending products to other states, but it means there is still the potential. Consulting with an experienced Los Angeles hemp business attorney can help you determine what specific federal and state statutory provisions might impact your operation and what measures will help ensure a strong argument for a good faith effort to comply with the letter and spirit of the law.
Helpful Arguments for Interstate Hemp Sales
In December, an administrative law judge ruled products containing 2014 Farm Bill-Compliant industrial hemp are allowed to be distributed by mail.
Another point in California hemp farmers’ favor is that it appears to have been the intent of Congress to allow hemp and related products to be sold commercially. Not only did the 2018 Farm Bill expressly remove hemp from the definition of marijuana, it also made it a federal commodity eligible for federal crop insurance. That could be a point worth making if an operation that grows, manufacturers, distributes or markets hemp could make if they did end up before a judge.
Meanwhile, there in the case of Big Sky Scientific LLC v. Idaho State Police, a hemp manufacturer is suing for the return of 7,000 pounds of hemp seized from the company truck by state troopers. The driver was arrested and charged with a felony. Plaintiff asserts that the cannabis on that truck was in fact hemp (a nonpsychoactive cousin of marijuana) and that hemp is legal under the 2014 Farm Bill (with protections broadened under the 2018 Farm Bill). In addition to compensation for monetary losses, plaintiff wants the law enforcement agency to apologize.