Having Headaches with Hemp?

I am sure you have all heard by now that on December 12, 2018, Congress passed the Farm Bill. With the passage of the Bill, hemp production will become legal once the final regulations are written and enacted. Some estimate hemp production will grow into a $20 billion industry by 2022.

But what exactly does the passage of the Farm Bill mean for your institution? To answer that question, we must look at some of the particulars of the Farm Bill.

  • Hemp is no longer listed on Schedule I of the Controlled Substance Act, and is 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 concentration of not more than 0.3 percent on a dry weight basis.” That means, any hemp plant with not more than 0.3% THC (the part that makes you high) – p. 419 of the Farm Bill
  • The Farm Bill does not prohibit interstate commerce of hemp – p.425 of the Farm Bill

A 12/24/18 JDSupra article gives great insights on the Farm Bill.

  • USDA (U.S. Department of Agriculture) is required to develop federal hemp regulations, but there is no timetable given, so it could take some time. Also, the states must be able to show to the USDA that they can properly monitor cultivation and production.
  • FDA (U.S. Food and Drug Administration) made it clear that they still have the authority to regulate products containing cannabis or cannabis-derived compounds per the Federal Food, Drug, and Cosmetic Act. The most important part is that the FDA sees no difference between hemp-derived CBD (legal under the Farm Bill) and marijuana-derived CBD (Schedule I of the Controlled Substance Act).

“It is unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.”

“Concurrently with the issuance of its response to the signing of the Farm Bill, FDA announced that it had completed its evaluation of three Generally Recognized as Safe (GRAS) notices related to hulled hemp seeds, hemp seed protein, and hemp seed oil, and that the Agency had no questions regarding the sponsor’s conclusion that the use of such products as described in the notices is safe.  As a result, these products can now be legally marketed in human foods for these uses without food additive approval, provided they comply with all other requirements and do not make disease treatment claims.  In the same breath, FDA was quick to point out in its update on the GRAS notices that the review decisions do not affect the Agency’s position on the addition of CBD or THC has been added”

“On January 3rd, according to the owner of a smoke shop in Yuma, Arizona, officials from the Food and Drug Administration (FDA) seized a variety of CBD products from the store’s shelves. The officials took fewer than fifty items and told the owner to anticipate follow-up paperwork within seven to ten business days.”

“According to the owner’s account, FDA officials had stopped by the shop a few days earlier and asked what products were edible and intended for humans. When those officials returned, they informed the owner that CBD cannot be sold for human consumption.”

With all of that, what exactly does the Farm Bill mean for your institution?

  • Nothing is clear at this point with hemp.
  • Each state has different laws on marijuana and hemp.
  • Your institution should have policies and procedures on both marijuana and hemp businesses.
  • Many institutions are considering the same due diligence for both marijuana and hemp.
  • If you plan to bank either marijuana or hemp businesses, be clear in your policies and procedures as to:
    • Definitions of both marijuana and hemp businesses
    • What types of businesses you will or will not service?
    • What to do if you find you are already banking a business you don’t want to bank?
    • Customer due diligence and enhanced due diligence for both

Both hemp and marijuana have been the hottest topics in our Compliance Anchor Veterans’ Venues. Those events provide the latest news and information on a host of topics and give focused training on one topic each month. The information above is just a glimpse of what we cover in those sessions. At the end of our Veterans’ Venues, we have a time for polls to see what other institutions are doing in a variety of areas and have on-line discussions. With eleven states covered, and over 100 peer institutions in our Compliance Anchor family, wouldn’t you like to join us?

If you need help with your policies and procedures or any other in-bank services, please contact Kevin Martin at This email address is being protected from spambots. You need JavaScript enabled to view it.