2018 US Farm Bill A Boost For Hemp Farm Industry: CBD Is Now Legal Federally


hemp flower joint

The 2018 Farm Bill has been signed into law. As of Dec. 20, industrial hemp — defined as all parts of cannabis plants having less than 0.3 percent tetrahydrocannabinol (THC) — is federally legal. This includes “derivatives,” “extracts” and “cannabinoids.”

Kentucky, historically the nation’s top manufacturer of hemp, launched an innovative pilot program for farmers as part of the 2014 Farm Bill. This program was a basis for the hemp section of the law and should make Kentucky the epicenter of hemp in the United States.

The interest in hemp production as supported by the 2014 Farm Bill was then expanded on in the Agriculture Improvement Act of 2018. With a focus on correcting and clarifying regulations and guidance from the US Department of Agriculture (USDA), hemp farms in the US are finally getting a break.  It’s too early for hemp producers and processors to sound the “all clear,” however. 

The same day as the 2018 farm bill passed, the FDA issued a press release asserting its right to regulate cannabidiols (CBD) from hemp, the popular product accounting for most hemp sales and acreage nationally. The legality of CBD is clearly a "yes" federally, but still threatened by agencies who aren't done fighting yet. Importantly, at least the Drug Enforcement Administration (DEA) removed hemp as a schedule 1 drug from the Controlled Substances Act.

In late December, Facebook began shutting down pages of American farmers trying to market hemp, and Google continues to refuse online ads, calling these ads “trafficking controlled substances.” Uncertainties and risk persist, though it seems that hemp production is finally transitioning into a more stable business.

What is the end game? It’s hard to tell. Varying estimates of the size of the hemp CBD market turn up everywhere. A Rolling Stone story touted the Brightfield Group projecting the market for hemp to be worth $22 billion dollars by 2022, while the Hemp Business Journal estimates CBD will be a $2.1 billion market by 2021.

Dreamland Dae Hemp Grower


What Does This Mean for Hemp Farmers?

I can answer first for my own farm, and then for farmers we know. I started farming in 1982, and of necessity became a farm entrepreneur. I was one of the first to start and develop a beef brand, and so knew that business. When the opportunity to raise hemp presented itself, I started growing the crop and at the same time started two retail brands.

The venture thus became dependent on our ability to set up the supply chain and sell our hemp through Homestead Alternatives, for CBD, and hemp grain through culinary products such as Laura’s Hemp Chocolate. We assumed the market pricing risk, knew our costs, and could figure out what the product was worth. The passing of the Farm Bill 2018 gave a boost to the hemp industry.

The farmers in our neighborhood are not marketers, nor do they want to be. Their experiences have been quite different. The primary complaint is that they are not getting paid for their hemp by their contract processors, or that payment is significantly delayed and confusing. Trust in the market from farm to processor has become something of an issue and farmers are worrying about the size of the market and global competition.

The passage of the farm bill will fix this by creating some stability in the business. Robust markets will develop consequently, with stable buyers, clear prices and payment terms, all of which is a little bumpy right now. Also, none of us have been able to insure our crop, increasing the production risk.

Because hemp is legal, this is to be solved for the 2019 crop year, and I’m off to see several agents soon. The bottom line, though, is that we have a new market. Hemp flower is now the fastest growing segment of the much larger CBD industry.

Those who take premium hemp flower production seriously will benefit in the long run. It has been proven that craft hemp flower farms like Dreamland Organics will thrive, while industrial hemp farms deal with over saturation. It's better to be a big fish in a small pond, than a big fish in a huge ocean.

The truth is that there is less competition the higher up the craft hemp flower ladder you go. That means adhering to artisanal standards will pay dividends and allow for a longer run in the hemp business. A dime a dozen biomass and white label CBD flower brands are learning that the hard way. It's a good time to be the craft "Hemp Flower Kings!"

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