Tag Archives: farm bill

U.S. Hemp Authority Names FoodChain ID Official Certification Body

By Aaron G. Biros
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According to a press release published last week, the U.S. Hemp Authority (USHA) announced that FoodChain ID, a global leader in food safety, testing and sustainability, is now the exclusive certifying body for the USHA certification seal.

FoodChain ID’s claim to fame is their widely-recognized Non-GMO Project Verification labeling standard, but they also offer services in the food, beverage and ingredient industries, including the entire food supply chain, as well as being a leader in USDA Organic certifications.

The effort to provide quality standards and guidance for best practices in the hemp and CBD markets is led by a coalition of organizations with the same goal: to legitimize the industry and gain consumer trust. The effort is funded by the U.S. Hemp Roundtable and joined by the Hemp Industries Association, the U.S. Hemp Authority, testing laboratories, agronomists, quality assessors and other industry-leading firms.

In order for a hemp company to get the certified seal, they must prove that they can meet strict standards, pass an independent third-party audit as well as enter a licensing agreement. The certification seal is an attempt to provide some legitimacy to the ever-changing hemp and CBD markets in the United States.

Marielle Weintraub, president of the U.S. Hemp Authority, says that through the program’s independent, third-party lab testing, the certification seal provides consumers with truth in labeling and transparency. “The U.S. Hemp Authority Certification Program is our industry’s initiative to provide high standards, best practices, and self-regulation, giving consumers an easy way to identify hemp-derived products that can be trusted,” says Weintraub. “We are striving for ingredient transparency and truth in labeling.”

Just some of the many CBD products on the market today.

According to Weintraub, the standards and best practices for the program are routinely updated and improved. There will be a public session where they discuss those standards and update industry stakeholders on their progress at the Natural Products Expo West on March 2nd.

Mark Dabroski, senior vice president, commercial services at FoodChain ID, says that hemp products are becoming increasingly common in the food, beverage and health and wellness markets. “Hemp seed oil and protein markets have been increasing exponentially over the last decade,” says Dabroski. “With the category’s expected growth at a 46% CAGR to reach $2.8B by 2023, the need for self-regulation and transparency are critical.”

“As consumers increasingly demand to know what is in the foods and products they buy, our suite of testing and verification services helps meet this demand,” says Dabroski.

The Ultimate Guide to Intellectual Property Protection for Cannabis Businesses

By Roger Bora
2 Comments

As of this writing, one cannot register trademarks with the U.S. Patent and Trademark Office (USPTO) for cannabis products and services that “touch” the cannabis plant (i.e., cultivate, manufacture or dispense cannabis products), with the recent exception for certain hemp-based products and services, because use of trademarks must be lawful under federal law for federal trademark registration eligibility. Brand owners may, however, secure federal trademark registration protection for their brand names for certain cannabis-related products and services that are currently legal under federal law in advance of what could be the full legalization of cannabis at the state and federal levels.

Federal trademark registration provides brand owners with valuable benefits beyond common law (unregistered) and state registered trademark rights, including the preservation of national expansion rights and presumption of trademark ownership and validity. For those reasons, securing federal trademark registration protection for trademarks is a prudent business strategy.

This article summarizes certain laws and regulations for securing federal trademark registration protection for cannabis products (including cannabidiol (CBD) products) and services. It also identifies other forms of intellectual property protection for  cannabis businesses.

What Are Cannabis, Marijuana, Hemp and CBD?

  • Cannabis is a plant of the Cannabaceae family and contains many biologically active chemical compounds, including the well-known delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD) compounds.
  • Parts of the Cannabis sativa plant are controlled under the Controlled Substances Act (CSA) under the drug class “marijuana.” The CSA is a federal law that regulates drug policy for the manufacture, importation, possession, use and distribution of certain substances. Marijuana is currently listed as an illegal Schedule I drug under the CSA, along with cocaine and heroin, due to its high potential for abuse, which is attributable mainly to the psychoactive effects of THC and the absence of a currently accepted medical use in the United States.
  • Marijuana, a term the CSA uses, is the dried leaves of the cannabis plant. It is derived from the cannabis sativa and cannabis indica species and is used primarily as a psychoactive drug.
  • Hemp is derived only from the cannabis sativa species and has historically been grown primarily for its strong fibers used for industrial purposes, including for making fabrics, clothing and rope.
  • There is a significant difference between marijuana and hemp with respect to their concentration of THC, which gives the plant its psychoactive effect. While marijuana can reach THC levels of 30%, THC levels in hemp are typically 0.3% or less.
  • The low level of THC in hemp is a reason why federal authorities recently removed it from the legal definition of marijuana, which means that cannabis plants and derivatives such as CBD derived from hemp that contain 0.3% or less of THC on a dry-weight basis are no longer considered controlled substances under the CSA.
  • Cannabidiol (CBD) is an active ingredient in the cannabis plant and is derived primarily from the hemp plant. CBD has been touted for its many health benefits, including for the treatment of insomnia, pain and anxiety, and it has become a widely used ingredient in many types of products, including foods, cosmetics, building materials, industrial oils, plastics and textiles.

Relevant Laws and Regulations

Controlled Substances Act (CSA)

Under the CSA, the drug class marijuana is defined as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin” (subject to certain exceptions). 21 U.S.C. §802(16).

The CSA prohibits, among other things, manufacturing, distributing, dispensing or possessing cannabis that meets the definition of marijuana, including CBD derived from marijuana.

2018 Farm Bill Removes Hemp from the Definition of Marijuana

The 2018 Farm Bill signed into law on December 20, 2018, amended the Agricultural Marketing Act of 1946 and changed certain federal laws and regulations concerning the production and marketing of “hemp,” defined 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.”

  • Those changes included removing hemp from the CSA’s definition of marijuana, which means that hemp and its derivatives, such as CBD derived from hemp, that contain no more than 0.3% THC on a dry-weight basis, are no longer controlled substances under the CSA.
  • The recent change in the classification of hemp allows brand owners that legally manufacture and sell certain hemp-based products, including certain hemp-derived CBD products, to federally register their associated trademarks.
  • However, the 2018 Farm Bill explicitly preserved FDA’s authority to regulate certain products containing cannabis or cannabis-derived compounds, even if derived from hemp, including CBD derived from hemp. Thus, federal laws, including FDA regulations, must still be considered for product legality before introducing products into commerce.

Food and Drug Administration (FDA)

Even with the removal of hemp from the CSA’s definition of marijuana, not all hemp-derived products are lawful following passage of the 2018 Farm Bill because certain products may still violate the Federal Food, Drug, and Cosmetic Act. For example, certain hemp-derived CBD products, including human foods, beverages, dietary supplements and animal foods, still violate FDA laws absent FDA approval.

The FDA monitors and investigates the sale of products that violate FDA laws, including CBD products promoted for therapeutic uses and treating diseases. When the FDA detects such violations, it may send warning letters to the violating parties as a first step in the enforcement process.

On December 20, 2018, the then FDA Commissioner Scott Gottlieb, M.D. made the following statement on that point:

“We’ll take enforcement action needed to protect public health against companies illegally selling cannabis and cannabis-derived products that can put consumers at risk and are being marketed in violation of the FDA’s authorities. The FDA has sent warning letters in the past to companies illegally selling CBD products that claimed to prevent, diagnose, treat, or cure serious diseases, such as cancer. Some of these products were in further violation of the FD&C Act because they were marketed as dietary supplements or because they involved the addition of CBD to food.”

Furthermore, in a recent letter to a company selling CBD products, the FTC sent a joint letter with the FDA, and that letter included the following statements and warnings:

  • “The FTC strongly urges you to review all claims for your products and ensure that those claims are supported by competent and reliable scientific evidence.  Violations of the FTC Act may result in legal action seeking a Federal District Court injunction or Administrative Cease and Desist Order.  An order also may require that you pay back money to consumers.

  • You should take prompt action to correct the violations cited in this letter. Failure to promptly correct violations may result in legal action without further notice, including, without limitation, seizure and/or injunction.”

What about using hulled hemp seed, hemp seed protein powder and hemp seed oil in human food?

  • In December 2018, the FDA generally recognized as safe (GRAS) hulled hemp seed, hemp seed protein powder and hemp seed oil. Accordingly, the FDA’s current position suggests that those products may legally be marketed in human foods for the uses described in the notices, provided they comply with all other requirements. To date, the FDA has not received any GRAS notices for the use of hemp-derived ingredients in animal food.
  • Hemp seeds are the seeds of the Cannabis sativa plant. They do not naturally contain THC or CBD. The hemp seed-derived ingredients that are the subjects of the GRAS notices contain only trace amounts of CBD and THC. The FDA has reported that “[c]onsumption of these hemp seed-derived ingredients is not capable of making consumers ‘high.’”
  • Those GRAS conclusions do not affect the FDA’s position on the addition of CBD and THC to food.

U.S. Trademark Registration Eligibility

Trademarks Must Be Used for Lawful Activities

A trademark’s use must be lawful under federal law for federal trademark registration eligibility. Whether activities associated with cannabis and/or cannabis-related goods or services are lawful under federal law requires review of various federal laws, including the Federal Food, Drug, and Cosmetic Act.

Federal law controls federal trademark registration eligibility, period.

If a trademark application is filed for goods or services that violate federal laws, including for marijuana products and/or services or certain products that feature CBD, such as foods and nutritional supplements, the USPTO Examiner should refuse the application. Furthermore, filing an “intent-to-use” trademark application cannot obviate that refusal.

What does that mean? It means that filing a trademark application based on an “intent to use” the trademark “in the future” in anticipation of federal law legalizing cannabis still violates current law (the law as of the application filing date), and thus the application should be rejected because the applicant does not and cannot have a “bona fide intent” to use the applied-for mark for a legal purpose.

The USPTO Examination Guide 1-19 for examining cannabis marks states that:

“[r]egistration of marks for foods, beverages, dietary supplements, or pet treats containing CBD will still be refused as unlawful under the FDCA, even if derived from hemp, as such goods may not be introduced lawfully into interstate commerce.”

The following is an excerpt from an issued Trademark Office action refusing registration of a mark on the basis the listed cannabis goods are unlawful:

“Registration is refused because applicant does not have a bona fide intent to lawfully use the applied-for mark in commerce.

To qualify for federal trademark/service mark registration, the use of a mark in commerce must be lawful. Gray v. Daffy Dan’s Bargaintown, 823 F.2d 522, 526, 3 USPQ2d 1306, 1308 (Fed. Cir. 1987) (stating that “[a] valid application cannot be filed at all for registration of a mark without ‘lawful use in commerce’”); TMEP §907; see In re Stellar Int’l, Inc., 159 USPQ 48, 50-51 (TTAB 1968); Coahoma Chemical Co., Inc. v. Smith, 113 USPQ 413 (Com’r Pat. & Trademarks 1957) (concluding that “use of a mark in connection with unlawful shipments in interstate commerce is not use of a mark in commerce which the [Office] may recognize.”). Thus, the goods and/or services to which the mark is applied must comply with all applicable federal laws. See In re Brown, 119 USPQ2d 1350, 1351 (TTAB 2016) (citing In re Midwest Tennis & Track Co., 29 USPQ2d 1386, 1386 n.2 (TTAB 1993) (noting that “[i]t is settled that the Trademark Act’s requirement of ‘use in commerce,’ means a ‘lawful use in commerce’”)); In re Pepcom Indus., Inc., 192 USPQ 400, 401 (TTAB 1976); TMEP §907.

Here, the items or activities to which the proposed mark will be applied are unlawful under the federal Controlled Substances Act (CSA), 21 U.S.C. §§801-971.”

USPTO Guidelines for Marijuana and Hemp Products: Key Takeaways

  • Trademark registrations for marijuana and marijuana by-products, including CBD derived from marijuana, are still unavailable.
  • Trademark registrations for certain hemp products are available. If an applicant’s goods are derived from hemp, as defined in the 2018 Farm Bill, the identification of goods must specify that they are derived from hemp and that the products contain less than 0.3% THC. Thus, the scope of the resulting registration will be limited to goods compliant with federal law.
  • Trademark applications covering certain CBD infused products, including foods, beverages, dietary supplements and pet foods, are still refused, even if derived from hemp, because such goods may not be introduced lawfully into commerce without FDA approval.
  • The USPTO is currently approving trademarks for skin care preparations and cosmetics that feature hemp ingredients, including CBD derived from hemp, as long as the application complies with the 2018 Farm Bill and USPTO filing requirements.
  • If a pending application’s filing date is prior to December 20, 2018 (the effective date of the 2018 Farm Bill), the applicant must amend the filing date to a date later than December 20, 2018 before the application may proceed. Once the date has been amended, a new search is conducted for any prior pending confusingly similar marks.
  • Trademark applications for hemp cultivation and production, if allowed, will require proof of authorization and licensure in accordance with a plan approved by the U.S. Department of Agriculture.

Federal Trademark Registration Considerations and Options

Although marijuana products and services (i.e., products and services that “touch the plant”) and certain hemp-based products are currently illegal under federal law, making their associated marks ineligible for federal trademark registration protection, there are still certain cannabis-related activities that are legal and thus eligible for federal trademark registration.

Examples of legal activities include:

  • Providing informational services related to cannabis or marijuana-related goods and services.
  • Clothing, including t-shirts and hats, featuring a cannabis-related trademark.
  • Educational programs in the fields of cannabis and CBD, including for health benefits and therapeutic uses of medical cannabis and CBD.
  • Providing an internet news portal featuring links to current events, information, commentary, non-downloadable publications in the nature of brochures, articles, and non-downloadable multimedia files containing video, audio or text in the fields of cannabis or cannabis news.
  • Online journals, namely blogs featuring information about cannabis.
  • Entertainment services, namely, providing podcasts featuring medical and industry experts in the field of cannabis and medical marijuana.

If a brand owner secures federal trademark registration protection for marks for legal activities, including those listed above, those trademark registrations and rights may arguably preserve future product and service expansion under the same registered mark for “related” goods and/or services that are unlawful as of the trademark application filing date, but later become lawful, including CBD infused foods and nutritional supplements and marijuana itself.

Why? Because trademark law protects consumers from “source confusion.”

  • For example, if a brand owner adopts the trademark N-DuraRun for running shoes, another party may not adopt the same or confusingly similar mark for running pants because consumers would likely be confused as to the source of running shoes and running pants if offered under the same trademark by different parties.
    • It is not confusion as to what a consumer is buying (“I thought I was buying running shoes… instead I mistakenly purchased running pants…”). Rather, it is confusion as to the source of the products (“I purchased EnDuraRun brand running pants because I thought they were made by the same company that makes N-DuraRun brand running shoes!”).
    • A question to ask is “Would the average consumer reasonably believe that the parties’ respective goods are of the type that would originate from the same source?”
      • If the answer is “yes” and if the parties’ respective marks are confusingly similar, there may be a likelihood of consumer confusion as to the source of the parties’ respective goods.

For example, if a company provides informational services in the field of cannabis and cannabis derivatives, including CBD infused foods, and/or provides foods and nutritional supplements featuring hemp seed protein powder and hemp seed oil, and it secures federal trademark registration protection for its trademark for those goods and/or services, that existing federal trademark registration and rights may arguably preserve the brand owner’s right to use and register the same mark for “related” goods and services, which could include CBD-infused foods and nutritional supplements if/when those goods become legal. That is so because the average consumer would arguably believe that informational services about CBD infused foods and CBD infused foods themselves would originate from the same source and also believe that foods and nutritional supplements featuring hemp seed protein powder and hemp seed oil and foods and nutritional supplements featuring hemp-derived CBD would originate from the same source.

Source confusion is the crux of trademark law.

Therefore, securing federal trademark registration protection now for goods and services that are lawful can preserve future trademark rights for cannabis-related products and services that are currently unlawful and may avoid losing valuable trademark rights to third parties.

As companies prepare for the potential federal legalization of all forms of cannabis, securing federal trademark registration now for brand names for goods and services that are currently legal is vital for protecting valuable company assets, current and future business opportunities, and future growth, and it is possible as long as brand owners understand the current status of the regulatory landscape and the intricacies of trademark law.

Other Forms of Intellectual Property Protection

In addition to trademark and federal trademark registration protection, there are other intellectual property protections available for marijuana, hemp and cannabis businesses, including:

  • State trademark filings. In states that have legalized cannabis, state trademark registrations may be available.
  • Common law trademark rights. In states that have legalized cannabis, common law trademark rights may be available.
  • Patent protection. Patent protection may be secured for various inventions, including plants, such as new strains of the cannabis plant, and methods of cannabis hydration and lighting.
  • Trade secrets. Trade secrets can protect certain aspects of a business, including formulas, processes or methods, that are not generally known or reasonably ascertainable by others and that can help a business obtain an economic advantage over competitors or customers. To be eligible as trade secrets, however, a business owner must take the necessary steps to legally protect them or they will be lost.
  • Copyrights. Copyright protection may be secured for certain company creative works, including trademark logos (artwork), written materials, photographs and software.

As the laws governing the cannabis industry continue to evolve, including trademark, FDA and banking laws and regulations, all interested parties, including cannabis business owners, law firms and investors, must stay abreast of the rapidly changing legal landscape to maximize business growth opportunities, ensure proper legal and regulatory compliance, and avoid having their businesses go up in smoke.


Notice: This article is for educational purposes only, is not legal advice and should not be substituted for retaining an attorney.

Banking Rights in the Hemp Industry

By Jonathan Miller
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The hemp industry has experienced and continues to see a surge of growth and awareness nationwide. Following the passage of the 2018 Farm Bill, permanently legalizing the crop and removing hemp from its classification as a controlled substance, consumer demand for hemp and hemp products like CBD have skyrocketed.

Unfortunately, there remain many challenges. Confusion about hemp’s legal status – and the differences between hemp and its intoxicating cousin, marijuana – has too often stymied commerce in the industry, particularly with traditional banking products and merchant services being limited in their availability to those trying to grow their businesses.

This month, we witnessed a breakthrough development. Upon the bipartisan urging of Senate Majority Leader Mitch McConnell and Senator Ron Wyden, four federal banking regulatory agencies – Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, the Federal Reserve, Financial Crimes Enforcement Network – joined by the Conference of State Bank Supervisors – issued joint guidance confirming the legal status of hemp and the requirements for banks providing financial services to businesses.

Just some of the many CBD products on the market today.

The new guidance achieves many necessary benchmarks integrating hemp and banking, such as no longer requiring banks to file suspicious activity reports for customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. Further, the guidance clarifies the difference between hemp businesses and marijuana businesses – adding yet another point of relief to banks concerned with national and state legality.

The hope is that the joint guidance should alleviate any fear of audits or regulatory crackdowns that have slowed financial institution integration with the hemp industry. However, this does not require banks or financial entities to participate in business with hemp companies. Nor does this guidance directly address the legality of hemp-derived CBD commerce.

With all of this in mind, there is still work to be done. Priority #1 is passage of the SAFE Banking Act. This bipartisan legislation, initially focused on providing a green light to marijuana banking in states where pot is legal, was amended to ensure a separate safe harbor for hemp, with far fewer hoops since it is not a controlled substance. It also directs federal financial agencies to provide clear guidance to both banks and other financial institutions – such as credit card companies – that hemp and CBD commerce are legal. The bill was passed overwhelmingly by the House in September and we are hopeful to see full Senate consideration soon.

Banking is one of the key targets that the hemp industry is aiming to secure, as this will allow for an increase in legal hemp business growth and practices. The goal of the U.S. Hemp Roundtable is to provide consumers with safe and legal hemp products along with the knowledge that the companies are meeting the highest standards and complying with national and state law.

2020 Financial Trends for the Cannabis Industry

By Melissa Diaz
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The past year has been another strong year in cannabis. Investors continued to pour money into the burgeoning industry — surpassing 2018 investment totals in just 40 weeks — and new markets opened up for recreational and medical cannabis. And following the passage of the 2018 Farm Bill, CBD has proliferated and become one of the hottest health supplements in the country.

But as the year winds down, the industry appears to be poised for a more challenging shift in the new year, as once-heady expectations for some big companies don’t pan out and some states clamp down, rather than loosen up, certain regulatory hurdles.

Here are some financial trends to keep an eye on in cannabis over the next year:

Finding New Capital Investment Will Be Tougher

After an initial investment boom in recent years, cannabis investors are realizing not everything colored green turns to gold. With public cannabis companies not performing as well as hoped and restrictive tax laws still plaguing the industry, investors are growing more cautious when it comes to cannabis. Add in other macroeconomic trends that are pointing to a global economic slowdown, and 2020 is shaping up to be a tough year to find cannabis capital.

Image: Flickr

That’s not to say funding will completely dry up, but operators and business owners must be aware that investment deals that perhaps closed in a matter of days in previous years, likely will take weeks or months while investors dig deeper into books and perform higher levels of due diligence before inking a deal. This means cannabis businesses must carefully plan and watch their cashflow and pursue fresh capital or investment earlier rather than later.

Expect More M&A and Consolidation

With the green rush reaching a crest of sorts, reality is setting in for some smaller cannabis operators. Expect to see more consolidation with smaller dispensaries and cultivators being bought up and absorbed by the big kids. More limited capital and investment options coupled with continued regulatory and legal uncertainties mean unsustainable operating costs for independent and smaller operators, which means the only way to survive may be to sell to a larger player.

New Markets & Regulations

The new year brings new states opening up to recreational or medical cannabis sales, as well as newer or altered regulations in existing markets. Cannabis firms must keep an eye on these new markets and regulations to best determine whether they plan to expand or not.

How stringent or lenient regulations are written and executed will determine the size and viability of the market. One state may severely limit the number of licenses it issues, while others may not put any limit. For example, Oklahoma issues unlimited licenses to grow hemp at $1,500 a piece. While that sounds promising for smaller hemp producers, it also could potentially lead to an oversaturation in the market. On the flip side, a more restrictive (and costly) licensure structure could lead to a far more limited market where only the industry’s largest players will be able to compete.

Image: Cafecredit, Flickr

Cannabis businesses also should keep an eye out for new regulatory hurdles in existing cannabis markets. For instance, California is raising its excise tax on cannabis beginning Jan. 1. That will result in higher costs for both consumers and cannabis companies. High state and local taxes have been a challenge industrywide because they make legal operators less competitive with the illicit market. Also, a proposed rule in Missouri could ban medical cannabis operators from paying taxes in cash. Such a rule would prove problematic for an industry that has had to rely on cash because of federal banking regulations. 

Credit Card Payments

While cannabis businesses may face several new and recurring hurdles in 2020 on the financial front, at least one looming change should make business easier: credit card payment processing. Because of cannabis’ continued banking woes, dispensaries and other plant-touching operations have not been able to accept credit cards. Though federal banking limitations remain in place, in 2020 we will see payment processors introduce new, creative and less expensive ways to navigate current banking limitations that will allow cannabis sellers to take credit cards. Opening up payments in this way will not only make transactions and record keeping easier for customers and businesses alike, it also will attract consumers who don’t use cash.

While some of these trends may prove challenging, in many ways they are signs that the cannabis industry is shifting and maturing as we enter a new decade. Many hurdles remain, but the size and momentum of the industry will only continue to grow in 2020 and beyond.

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Hemp in the United States: An Opinion

By Dr. Anthony Macherone
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The Agriculture Improvement Act, also known as the Farm Bill, was signed into law in December 2018. A major provision in the law legalizes hemp as an industrial crop. In August of 2016, USDA, DEA, and FDA published a Statement of Principles in the Federal Register (FR 53365) that defined industrial hemp as any part or derivative (including seeds) of the plant Cannabis sativa L. with a dry weight concentration of tetrahydrocannabinols not greater than 0.3% (wt/wt).

USDA LogoGlobally, the hemp market was estimated at $3.9 billion in 2017 and the hemp seed segment is predicted to grow “at a CAGR of 17.1%” through 2025. Some of the markets affected by hemp production include nutraceuticals, food, textiles, construction materials, and personal care products. It is also anticipated that cannabidiol (a non-psychoactive cannabinoid extracted from hemp) production will grow to support the burgeoning recreational and medicinal cannabis markets in the U.S., Canada and other countries around the world.

In U.S. states and Canada where recreational or medicinal marijuana programs have been legalized, regulations have been defined to assure the safety and quality of the products sold to consumers. These regulations include analytical chemistry and biological assays to identify and quantify pesticides, mycotoxins, heavy metals, residual manufacturing solvents, terpenes, and microbial contaminates. With regards to hemp, the USDA recently released guidelines for testing of hemp. To date, the only required test from the Federal perspective is total ∆9-tetrahydrocannabinol (THC) content < 0.3% by weight. Total THC is essentially the sum of tetrahydrocannabinolic acid (THCA) and THC (Total THC = 0.877(THCA) + THC) but this may be eventually expanded to include all salts and isomers of cannabinols as noted above. Another complication: what constitutes “dry”? The CFR does not answer this.

Agilent Technologies has invested in the development and implementation of the analytical protocol, the services needed to support these assays, the required consumables, reagents, and supplies, and the training of sales and support personnel to comprehensively ensure compliance of hemp with USDA regulations.

Soapbox

Where Does the FDA Stand on CBD?

By Nathan Libbey
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CBD Intro

Cannabidiol, or CBD, is one of over 1000 cannabinoids found in the Cannabis plant. CBD was identified as an isolate from Minnesota Hemp in the 1930s (Gururajan, 2016). Unlike many other cannabinoids and compounds found in cannabis flower, CBD is not adversely psychoactive. CBD, upon its discovery entered the field of vision for US regulators. There are two routes of regulation for the FDA under the 1938 Food, Drug, and Cosmetic Act – as a drug and as a food (Oconnor, 2018). The FDA has jurisdiction over drugs in a broad sense from border to border, intra and interstate. Their jurisdiction over food, however, only extends to food that crosses interstate lines. CBD therefore, because of potential food uses and medicinal uses, darkens what is already a muddy regulatory landscape.

CBD as a drug

FDAUnder the FD&C Act, a drug is defined as “any product, including a cannabis product (hemp or otherwise), that is marketed with a claim of therapeutic benefit, or with any other disease claim (Mayol, 2019). In 1995, Cannabidiol was identified as a possible solution to help combat epilepsy. Since 1995, studies have been performed to evaluate the effectiveness of CBD to treat epilepsy and lessen the frequency and severity of seizures. In 2018, the FDA approved the first cannabidiol drug, brand named Epidiolex (White, 2019). Drug approvals under the FDA jurisdiction require specific approval before they can be launched into market. That is, while Epidiolex has a specific approval, this approval does not lead to implicit approval of similar CBD drugs that treat other illnesses.

Bottom line: CBD is a recognized drug for use to treat epilepsy. Future use as a drug needs to be approved by the FDA.

CBD as an ingredient

What is seemingly the easiest route to market for CBD derived products is increasingly complicated. For ingredients, the easiest road to allowance in food is to be identified as Generally Recognized as Safe (GRAS). GRAS status is granted to ingredients that have been studied and deemed safe for human consumption by FDA-recognized experts. CBD, to date, is not GRAS. Without GRAS status, the FDA has similar mandates to CBD as a drug above. Ingredients must gain premarket approval prior to being offered for sale in interstate commerce.

Bottom line: CBD is not a recognized ingredient in food – it is neither premarket approved by the FDA nor accepted as generally safe for human consumption.

FDA Action

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

CBD product offerings continue to rise, ranging from CBD infused pillows to suppositories. While products containing CBD have increased in popularity, the FDA has stood at a distance until recently. The result of this lack of enforced policy has led to a scenario where upwards of 70% of all CBD products available online are mislabeled (Caroon, 2018).

This lack of enforcement and flexing of authority seems to be a thing of the past, however. In late November, the FDA sent a warning letter to 15 facilities that had engaged in interstate commerce with a CBD product. These warnings stemmed largely from non-compliant claims of health benefits, CBD use as a dietary supplement, and CBD used in food products offered for sale across state lines.

Until CBD is either identified as GRAS or a specific product gets preapproval, the current issues with CBD in food will remain. In the meantime, manufacturers must be aware of their ingredients, their claims, and the ramifications these may have on the FDA jurisdiction over their products.


References

Cohen, P., & Sharfstein, J. (2019). The opportunity of CBD — reforming the law. The New England Journal of Medicine, 381(4), 297-299.

Corroon, J., & Kight, R. (2018). Regulatory status of cannabidiol in the united states: A perspective. Cannabis and Cannabinoid Research, 3(1), 190-194. doi:http://dx.doi.org.ezproxy.neu.edu/10.1089/can.2018.0030

Gururajan, A., & Malone, D. (2016). Does cannabidiol have a role in the treatment of schizophrenia? Schizophrenia Research, 176(2-3), 281-290.

O’Connor, S. and Lietzan, E. (2018). The surprising reach of FDA regulation of cannabis, even after descheduling. American University Law Review 68, 823.

Mayal, S. and Throckmorton, D. (2019).  FDA Role in Regulation of Cannabis Products.  Retrieved from https://www.fda.gov/media/128156/download

White, C. (2019). A Review of Human Studies Assessing Cannabidiol’s (CBD) Therapeutic Actions and Potential. Journal of Clinical Pharmacology, 59(7), 923-934.

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USDA Announces Hemp Regulations

By Aaron G. Biros
3 Comments
USDA Logo

This morning, U.S. Secretary of Agriculture Sonny Perdue announced the establishment of the U.S. Domestic Hemp Production Program. The program, as stipulated by Congress in the 2018 Farm Bill, will establish a regulatory framework for hemp production in the country.

Secretary Perdue made the announcement in a YouTube video titled “USDA’s Hemp Policy.” Later in the week, an interim final rule formalizing the program will be published in the Federal Register, according to the USDA’s website. “The rule includes provisions for the U.S. Department of Agriculture (USDA) to approve hemp production plans developed by states and Indian tribes including: requirements for maintaining information on the land where hemp is produced; testing the levels of delta-9 tetrahydrocannabinol; disposing of plants not meeting necessary requirements; and licensing requirements,” reads the press release. “It also establishes a federal plan for hemp producers in states or territories of Indian tribes that do not have their own approved hemp production plan.” The interim final rule will go into effect as soon as it is published in the Federal Register, which should be by the end of this week.

You can find a preview of the rule here. The agency has also developed guidelines for sampling and testing procedures, which you can find here. Those documents are meant to provide more information for hemp testing laboratories.

You can watch the YouTube video and read the announcement he made below:

Hello everyone, as I travel across this great country of ours, I hear a lot about a strong interest in a new economic opportunity for America’s farmers: the production of hemp. Which is why today I am pleased to announce the USDA has published the rule establishing the US domestic hemp production program. We said we’d get it done in time for producers to make planning decisions for 2020 and we followed through. We have had teams operating with all hands-on-deck to develop a regulatory framework that meets Congressional intent while seeking to provide a fair, consistent and science-based process for states, tribes, and individual producers who want to participate in this program. As mandated by Congress, our program requires all hemp growers to be licensed and includes testing protocols to ensure that hemp grown under this program is hemp and nothing else. The USDA has also worked to provide licensed growers access to loans and risk management products available for other crops. As the interim final rule, the rule becomes effective immediately upon publication in the federal register. But we still want to hear from you. Help us make sure the regulations meet your needs. That’s why the publication of the interim final rule also includes a public comment period continuing a full and transparent rulemaking process that started with a hemp listening session all the way back in March 2019. At USDA, we are always excited when there are new economic opportunities for our farmers and we hope the ability to grow hemp will pave the way for new products and markets. And I encourage all producers to take the time to fully educate themselves on the processes, requirements and risk that come with any market or product before entering this new frontier. The Agricultural Marketing Service will be providing additional information, resources and educational opportunities on the new program. And I encourage you to visit the USDA hemp website for more information. As always, we thank you for your patience and input during this process.

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Searching for the Good Stuff

By Cindy Rice
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Someone approached me the other day, wanting to know what was the real story about hemp and CBD.

He said he had “a guy” who gave him a CBD salve as part of a study, supposedly “the good stuff,” to help his knee. He couldn’t understand why he was the only one out of 20 people in the group that felt no relief. He happened to have this CBD salve with him, along with a second brand that he hadn’t yet tried. The “good stuff” had slick, colorful packaging, a beautiful logo and powerful marketing messages about the phytocannabinoids and essential oils in the jar. The other CBD product was in a dull grey tin, an ugly duckling, and not nearly so impressive on the outside- I’ll call it “Homer’s Brew.” My friend dismissed Homer’s Brew outright, as not even worth trying. I told him that not all CBD products are created equal, that you can’t always believe the claims on the package, including the cannabinoid potency displayed on the label.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

I told him to search for the Certificate of Analysis (COA) for each of the two products, specifically, lab test results validating the CBD dosage per serving, and also the breakdown of pesticides, heavy metals and microbials. He had to do a little digging and emailing, as it wasn’t readily available for either company, but the next day, results were in. The “good stuff” with the slick packaging and bold claims had mere trace amounts of CBD, with some hemp and essential oils- no tests for pesticides or contaminants of any kind. Hmmm, no wonder he was disappointed. Homer’s Brew’s COA came in with flying colors – a reputable lab had confirmed safe levels of pesticides, pathogens and heavy metals, and the CBD level was substantial, with a detailed cannabinoid breakdown in the lab report.

In spite of the varying legality of hemp-derived CBD products from one state to the next, consumers are gobbling up costly CBD salves, tinctures and edibles in markets, gyms and online. Like moths to a flame, they are pulled in by the CBD name and lofty promises, not always understanding what they are getting for their money. They trust that these products are safe, licensed, inspected and regulated by some agency, otherwise, “they wouldn’t be on the shelves, would they?”

FDAlogoIn spite of the 2018 Farm Bill, FDA still has not recognized the legality of products containing hemp-derived CBD, but some states have gone ahead and given them a green light anyway- check with your own jurisdiction to be sure. In the meantime, hemp-derived CBD products are slipping through the regulatory cracks, depending on the state. It is confusing, for sure, and buyer beware.

Separate yourself from the pack of snake-oil salesmen. Test your products for safety and accurate cannabinoid potency, and make a Certificate of Analysis readily available to your customers. Boldly portray your transparency and belief in the quality of your products through this COA.

Providing this information to consumers is the best path to success- safe, satisfied customers who will refer to their friends and family, and most likely come back for more of your “good stuff.”

The 2018 Farm Bill Legalized Industrial Hemp. Now What? Get Your Answers Here.

By Josh Smart
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The Agriculture Improvement Act of 2018 legalized the growth, sales and transportation of industrial hemp across state lines. Although it looks identical to other types of cannabis, this cannabis plant contains less than 0.3 percent THC, and can be used to make building insulation, beauty products, car dashboards and more. Most significantly for farmers, it can serve as an ideal rotational crop because of its ability to reduce soil toxicity.

Until this update to the Farm Bill, hemp was considered a controlled substance and few U.S. farmers were granted rights to plant and harvest it. Now, the agricultural commodity is expected to raise the crop’s already growing GDP to that of liquor and beer sales and some estimate it should reach $20 billion in as little as five years.

Agribusinessesand farmers alike will now be looking to secure processors and other commodity buyers ahead of planting industrial hemp and purchasing the necessary equipment for its harvest. Because hemp can be grown in any climate, it may be especially attractive to tobacco growers and dairy farmers who have been less profitable as of late. 

Now that it’s been legalized, what’s the risk?

As more agribusinesses and farmers look to confirm viability of industrial hemp growth, potential liabilities will surface. The 2018 Farm Bill left many questions unanswered. Here are a just a few FAQs:

Question: Can I just add hemp to my crop rotation, or is additional insurance required?

Answer: The standard multi-peril crop insurance policy DOES NOT provide coverage for planting hemp, or endorsements for its storage and transportation- yet. Instead, industrial hemp must be insured on separate private policies for: harvest, extreme weather and crop storage and transportation. There’s a strong push to get industrial hemp into the federal crop insurance program as early as crop year 2020. As hemp planting, harvesting, storage and transportation become more understood and predictable, new policy options will likely become available. Inquire about new coverage options at your next annual renewal.

Q: How will the FDA regulate industrialized hemp?

A: The FDA will develop rules and regulations on industrial hemp throughout 2019, and will be ready for rollout during the 2020 crop year. Because it’s impossible to distinguish a cannabis plant with THC from an industrial hemp plant in the field, crop lifecycle testing and documentation will likely be required. The question remains if this testing and documentation will be incumbent on the farm/agribusiness, or FDA agents. Some states are further along in this process and have already hired testing and compliance officers.

Q: How can farmers ensure that the THC content of their plants does not exceed .3%?   

A: Farmers must have a contingency plan for monitoring their hemp’s THC content which should include employing a seasoned agronomist who can institute controls, keep plants properly hydrated and create a plan to maintain optimal THC levels. In the heat of the summer, THC levels typically remain low, but rise with cold and rain. Should there be a local cold spell, high rainfall, or if the hemp plant was seeded late in the season and the harvest runs into the fall, THC levels could rise quickly. When this happens, farmers will have to chop down the plant to control the level and harvest the plant’s flower before its next THC test.As with any emerging market, there is still a lot of doubt surrounding the growth and sales of industrial hemp, as many risks are unknown. 

Q: Can I transport hemp across state lines to a processor in another state?

A: On paper, industrial hemp is legal across all 50 states, and therefore can be transported across state lines and sold as any other commodity. In reality, though, hemp is undistinguishable from cannabis to the naked eye, and therefore, shipping an entire biomass directly from the field across state lines has a good chance of being confiscated.

When hemp is confiscated on the side of the road – even if it is eventually returned – there could be significant lag in delivery, storage is uncertain and quality control can’t be maintained. Alternatively, farmers are now shipping their hemp in smaller, unmarked loads, which is forcing them to hold onto product for longer than usual.

As with any emerging market, there is still a lot of doubt surrounding the growth and sales of industrial hemp, as many risks are unknown. On the flip side, industrial hemp offers small farmers and agribusinesses alike an unprecedented opportunity to get in at the ground floor of a new crop. If you do, make sure to work with your insurance broker to secure proper coverage immediately.

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Hemp: A Growing Market Ripe for Protection

By David Holt, Whitt Steineker
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With recent changes in federal and state law, and growing consumer awareness, the long-dormant hemp industry may finally be able to take heed of George Washington’s advice, “Make the most you can of [India Hemp] … The Hemp may be sown anywhere.”1

Hemp has a long and varied history in the United States. Throughout his lifetime, George Washington cultivated hemp at his Mount Vernon Estate, and, for a time, Washington even considered replacing tobacco with hemp as the Estate’s primary cash crop.2 Like Washington, Thomas Jefferson grew hemp at Monticello and his lesser-known Poplar Forest plantation.3 Both Founding Fathers primarily used the hemp cultivated on their property for making household items like clothing, rope, and fishing nets.

From the colonial era until 1970, hemp was routinely cultivated across the United States for industrial use. But, with the passage of the Controlled Substances Act (“CSA”) in 1970, U.S. hemp production ceased.4 The CSA banned cannabis of any kind, eliminating any distinction between hemp and other types of cannabis. As a result, hemp production became illegal in the United States.

A wide variety of hemp products can be found throughout the Untied States markets. Image courtesy of Direct Cannabis Network

More recently, the U.S. government finally began to ease restrictions on hemp cultivation and production. The 2014 Farm Bill introduced the USDA Hemp Production Program.5 Under the Program, universities and state departments of agriculture are allowed to cultivate hemp if:

  1. The industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and
  2. The growing or cultivating of industrial hemp is allowed under the laws of the state in which such institution of higher education or state department of agriculture is located and such research occurs.

The 2014 Farm Bill did not remove hemp from the auspices of the CSA, nor did it address the continuing application of federal drug control statutes to the growth, cultivation, manufacture, and distribution of hemp products.

The 2018 Farm Bill built upon the deregulation that began in 2014.6 Although both the 2014 and 2018 bills define hemp as the plant Cannabis sativa L. and any part of that plant that has a delta-9 THC concentration of 0.3% or less by dry weight,7 the 2018 Farm Bill took the additional step of removing hemp from the federal list of controlled substances and categorized it as an agricultural product. As a result, the production of hemp is now subject to USDA licensure and regulation. However, until the USDA completes its rulemaking process for implementing hemp regulation, hemp production remains illegal unless done in compliance with the terms of the earlier 2014 bill.8 For the time being, legal cultivation of hemp still must occur in a state that has authorized hemp research9 and the researcher must be either an institute of higher education or a state department of agriculture (or its designee).

With the increasingly favorable changes to federal and state law allowing for the expanded cultivation and production of hemp in the United States, the market is expected to grow significantly in the coming years. In 2014, the U.S. industrial hemp market was estimated at approximately $504 million.10 In only one year after the passage of the 2014 Farm Bill, the industrial hemp market was estimated to have increased by over $95 million to almost $600 million. By 2017, the worldwide market for industrial hemp was estimated to be $3.9 billion and growing at a compound annual growth rate (CAGR) of 14%.

In addition to favorable changes in U.S. law, the hemp market is benefiting from growing consumer awareness and demand for hemp-based food products.11 High in omega-3 and omega-6, amino acids and protein, hemp is growing in popularity as a cooking oil, dairy substitute, flour source and bakery ingredient. Among other things, hemp is considered by some to provide positive health effects for those seeking help with insulin balance, cardiac function, mood stability, and skin and joint health.

Although hemp cultivation is now allowed in the U.S.—at least for research purposes—and the market is forecasted to rise steadily under growing demand for hemp-based products, broad access to viable, legal seeds continues to present a challenge for researchers and commercial growers. In order to legally implement authorized cultivation programs and take economic advantage of a swiftly growing market, farmers must have access to seeds that can be guaranteed to consistently produce plants that fall under the legal definition of hemp. In an attempt to alleviate the problem, several states, including California, Indiana, Maine and Oregon, have implemented programs to license or certify compliant seed distributors and producers.

The importance of hemp seed availability and development has also been recognized on the federal level. On April 24, 2019, the USDA Agricultural Marketing Service published a Notice to Trade announcing that the USDA’s Plant Variety Protection Office (“PVPO”) is now accepting applications of seed-propagated hemp for protection under the Plant Variety Protection Act (“PVPA”). Among other things, the PVPA provides intellectual property protection to breeders who have developed new varieties of seed-propagated plants. Under the new guidance, breeders of new hemp varieties can now secure protection pursuant to the PVPA. Those holding a certificate of protection from the PVPO can exclude others from marketing or selling a registered hemp variety and manage how other breeders and growers use their protected variety.

The process for requesting protection under the PVPA is fairly straightforward. Breeders, or their attorneys, must complete all application forms, pay the required fees,12 submit a distinct plant variety name, and provide a deposit of at least 3,000 viable and untreated seeds of the variety (or 3,000 seeds of each parent variety for a hybrid). One required form for a completed PVPA application is the Objective Description of Variety form.13 This form provides a series of questions that identify the distinct aspects of the variety in question, including, among other things, plant and leaf characteristics, seed properties and anticipated uses. Upon receipt of the completed application and fees, the PVPO examines the application to determine whether the listed plant variety is new, distinct, uniform, and stable. If the PVPO determines that the requirements are satisfied, it will issue a certificate of protection granting the owner exclusive rights to the registered variety for a period of 20 years.Now is the time for farmers, researchers, and hobbyists alike to take advantage of the expanded opportunities available for protecting intellectual property for proprietary hemp varieties.

Although hemp has traditionally been used in the textile and fiber industries, the estimated 17.1% CAGR in the hemp seed segment is being driven by the increase in demand for hemp oil, seedcakes, and other food and nutraceutical products. These products are primarily derived from the hemp seed as opposed to its fibers. Presently, hemp seeds contain approximately 30-35% oil, of which approximately 80% is essential fatty acids, and 25% crude protein.14 Under the new PVPA guidelines, if a breeder is able to cultivate a sustainable plant that increases the plant’s production of the desirable compounds, he or she could achieve a significant position in the growing market.

The protection provided by the newly expanded PVPA builds upon other avenues of intellectual property protection now available to hemp breeders and growers. In addition to the PVPA, plants meeting certain criteria may also be protectable under a plant patent or a utility patent, both of which are administered by the U.S. Patent and Trademark office. Generally speaking, PVPA protection may be available for seeds and tubers, plant patent protection applies to asexually propagated plants, and utility patent protection may be available for genes, traits, methods, plant parts and varieties.15

With a market that is expected to grow substantially in the near future, and with the passing of increasingly friendly federal and state legislation, the hemp industry is on the cusp of significant expansion. Now is the time for farmers, researchers, and hobbyists alike to take advantage of the expanded opportunities available for protecting intellectual property for proprietary hemp varieties.


  1. George Washington to William Pearce, 24 February 1794.
  2. George Washington and Agriculture, https://www.mountvernon.org/library/digitalhistory/digital-encyclopedia/article/george-washington-and-agriculture, last visited May 14, 2019.
  3. Hemp, Thomas Jefferson Encyclopedia, https://www.monticello.org/site/research-and-collections/hemp, last visited May 14, 2019.
  4. Controlled Substances Act, Pub.L. 91-513, 84 Stat. 1236.
  5. Agricultural Act of 2014, Pub.L. 113-79.
  6. Agriculture Improvement Act of 2018, Pub.L. 115-334.
  7. Any plant having a THC content in excess of 0.3% is considered marijuana and remains illegal as a controlled substance under the CSA.
  8. See, e.g., https://www.ams.usda.gov/rules-regulations/farmbill-hemp.
  9. To date, at least 41 states have passed legislation authorizing hemp cultivation and production programs consistent with federal law. As of the date of this article, those states that have not enacted legislation allowing the cultivation of hemp for commercial, research, or pilot purposes include: Connecticut, Georgia, Idaho, Iowa, Louisiana, Mississippi, Ohio, South Dakota, Texas, and the District of Columbia.
  10. Industrial Hemp Market – Market Estimates and Forecasts to 2025, Grand View Research, https://www.grandviewresearch.com/industry-analysis/industrial-hemp-market, last visited May 14, 2019.
  11. Currently, the Food and Drug Administration prohibits hemp-based CBD in food and beverages. However, the FDA has set a public hearing to discussing the legalization of CBD in food and beverages for May 31, 2019.
  12. The PVPA application fee is currently $4,382 with an additional fee of $768 due upon issuance of a certificate of registration.
  13. The Objective Description of Variety form for Hemp (Cannabis sativa L.) can be found at https://www.ams.usda.gov/sites/default/files/media/113HempST470.pdf.
  14. Hemp Seed (Cannabis sativa L.) Proteins: Composition, Structure, Enzymatic Modification, and Functional or Bioactive Properties,Sustainable Protein Sources (Ch. 7), R.E. Aluko (2017).
  15. Regulations are currently under consideration that could expand or otherwise modify the scope of protection available under each of the enumerated intellectual property protection schemes. Consult a licensed attorney for questions regarding the specific program that may apply to a particular set of circumstances.