Congress Advances Cannabis and Hemp Proposals
Highlights
- The U.S. Congress is moving forward with legislation that will change the regulation of hemp-derived products.
- The hemp-derived cannabinoid market, conservatively valued at nearly $30 billion, could see changes as early as this fall, although it's more likely to be in the first quarter of 2025.
Recent congressional activity highlights the changing environment for cannabis regulation. Specifically, U.S. Congress is moving forward with legislation that will change the regulation of hemp-derived products. The industry could see changes as early as this fall, although it's more likely to be in the first quarter of 2025.
The Farm Bill Reauthorization
The Agriculture Improvement Act of 2018 (the 2018 Farm Bill) amended the Controlled Substances Act (CSA) to exclude certain products from the definition of marijuana. Specifically, the Act defines hemp as "the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent on a dry weight basis."
This definition in the 2018 Farm Bill removed hemp with 0.3 percent or less of THC from the CSA, which in practice means that cannabidiol (CBD) that meets the definition of hemp is not considered a controlled substance. Although Congress' intent is generally understood to have been the legalization of hemp production (for textiles and nonintoxicating supplements) for the first time in more than a century, the 2018 Farm Bill language admittedly did not foresee the creation of the hemp-derived cannabinoid market, now conservatively valued at $28.4 billion.1
The Farm Bill is now up for reauthorization, which happens approximately every five years. The U.S. House of Representatives' version of the 2024 Farm Bill contains language that modifies these provisions. Specifically, it now contains provisions that clarify the types of hemp cannabinoid products that would be considered lawful. The bill would redefine the existing statutory definition of hemp by replacing language basing the legal limits for hemp on its delta-9 tetrahydrocannabinol (delta-9 THC) concentration and instead basing the definition on hemp's "total tetrahydrocannabinol (including tetrahydrocannabinol acid (THCA]) [Total THC] concentration." Other statutory language regarding hemp "derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not" would remain unchanged.
In addition, at the House Committee on Agriculture's late-May markup of the Farm Bill reauthorization language, an amendment was passed that changed the definition of hemp in federal law to only include naturally occurring, naturally derived and nonintoxicating cannabinoids. (See Holland & Knight's previous alert, "House Agriculture Committee Completes Markup of 2024 Farm Bill," May 28, 2024.) The bill as amended does not define "intoxicating," however, it would prohibit hemp cannabinoid products with "quantifiable amounts" of Total THC (including THCA) or any other cannabinoids that have (or are marketed to have) "similar effects on humans or animals" as THC, as determined by the U.S. Department of Agriculture (USDA).
Although the U.S. Senate version of the 2024 Farm Bill has not yet been released, it is clear Congress is looking to resolve, in some fashion, issues related to THC production resulting from the 2018 Farm Bill.
Fiscal Year 2025 Appropriations Bills
The Agriculture-FDA Appropriations legislation for fiscal year 2025 also contains language addressing hemp. The House bill contains language similar to the 2024 Farm Bill proposals that further refines the federal definition of hemp to only include naturally occurring, naturally derived and nonintoxicating cannabinoids and excludes those with "quantifiable amounts" of Total THC.
The recently released Senate version of the Agriculture-FDA funding bill contains no provisions related to hemp and cannabinoids. The full Senate will vote on the bill in the coming weeks. Provisions could be added when the bill is debated by the full Senate, but the most likely outcome is that House and Senate negotiators will work toward finding a solution before final passage this year.
Congressional action on the Farm Bill and the appropriations process are significant because they become effective upon enactment – which could be as early as this fall. Thus, they will become legally binding before the U.S. Drug Enforcement Agency (DEA) publishes its final regulation on the rescheduling of marijuana.
Holland & Knight will continue to closely monitor these developments. Please contact the authors for more information.
Notes
1 2023 U.S. National Cannabinoid Report, Whitney Economics
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.