Cannabis Companies Get Ready for Interstate Commerce Thanks to 2018 Farm Bill

Updated on March 1, 2019
jfsigerson profile image

Business journalist and culture writer published in WIRED Innovation Insights, Investing, GuruFocus, CNN, Technology among others.

Where it began

In 2014, President Obama signed a bill that allowed research and limited use of industrial hemp. The United States Department of Agriculture, in conversation with the Drug Enforcement Agency and Food and Drug Administration, point-blank said industrial hemp includes cannabis sativa derivatives such as seeds, fiber or leaves which has tetrahydrocannabinol 0.3 percent or less in the dry weight stage.

The legislature invited individuals, states, and institutions to participate in industrial hemp research. It even gave funding with the National Institute of Food and Agriculture (NIFA). However, hemp did not get removed from the Controlled Substance List as an illegal drug, so the companies bore all the risk from crop failure, disease or law enforcement.

Leading up to the 2018 Farm Bill

By 2017, 38 states plus Puerto Rico had legislation or considered legislation for industrial hemp. Things morphed into licenses, certifications, registrations, record keeping, and documentation. At the same time, an array of entrepreneurs or established enterprises entered the field with technology, processes, and ideas developing for the time for mass distribution of cannabis to the public through a retailer rather than a medical dispensary.

When the time came for 2018 Farm Bill, it did not establish the industry per se but instead tweaked the 2014 Farm Bill. The most significant development was the removal of hemp from the Controlled Substance list. This gave farmers the ability to obtain insurance for hemp crops which means it can be grown widely even outside of universities and state-mandated programs and across state lines.

For companies like PotNetwork, it meant less risk to invest in seeds and growing practices for its growing hemp enterprises. Its Diamond CBD subsidiary concentrated on hemp-derived cannabidiol (CBD) with less worry.

The 2018 Farm Bill also expanded the ability of states to create their regulation structures while allowing access to federal farm program items without penalty.

Cannabis business on interstate commerce

For a cannabis company like PotNetwork Holdings, Inc. (OTCMKTS:POTN) which has been around since 2004, it's about combining compliance and innovation. It has seen legislation about cannabis full spectrum and knows well what can and cannot be done, unlike the many of the more recent startups. PotNetwork has consistently informed the cannabis industry and the public of trends, legislation and future prospects. In this decade, changes in the Farm Bill has allowed some wriggle room and possibilities for PotNetwork.

As a leading cannabis business, PotNetwork Holdings occupies several states and has interests in Scandinavia for its hemp enterprises. In December, it announced a significant shift to interstate commerce in anticipation of the 2018 Farm Bill 2018 implementation, which was previously difficult under the old legislation. Still, all hemp and hemp derived products must become labeled clearly and accurately.

The government has now narrowed the definitions for hemp, cannabis and marijuana. Crossing those definition lines in labeling or advertising will face court cases and law enforcement. As seen in February 2019, the FDA warned businesses in New York and banned CBD-infused edibles from established business due to non-compliance to the legal standards.

GRAS gives permission

Unsubstantiated health claims will get notices by the FDA, whether it's about hemp, marijuana or cannabis. That is why the purity and concentration of hemp substances matter.

As with anything, claims as a health product must become substantiated with studies or go through an FDA process. Cannabis companies will have to find the line where the government considers it information nutritional or a medical health claim. They may need to have a team of medical professionals such as nutritionists as part of the company certifying the products as healthy human food.

In line with this, FDA issued a GRAS (generally regarded as safe) Notice in December 2018 to Canadian company Fresh Hemp Foods Ltd. The notice states that hulled hemp seeds, hemp seed oil or hemp seed protein powder are not in violation of any law or regulation. It further explained once declared on the ingredient list, the hemp seed-derived ingredient can be added to protein, oil, carbohydrates and beverages.

Investors need to look carefully at how a company labels and advertises its products. Being socially responsible in the marijuana, cannabis or hemp industry will involve making those distinctions in advertising and labeling.

Questions & Answers

    Comments

      0 of 8192 characters used
      Post Comment

      No comments yet.

      working

      This website uses cookies

      As a user in the EEA, your approval is needed on a few things. To provide a better website experience, soapboxie.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

      For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://soapboxie.com/privacy-policy#gdpr

      Show Details
      Necessary
      HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
      LoginThis is necessary to sign in to the HubPages Service.
      Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
      AkismetThis is used to detect comment spam. (Privacy Policy)
      HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
      HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
      Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
      CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
      Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
      Features
      Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
      Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
      Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
      Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
      Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
      VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
      PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
      Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
      MavenThis supports the Maven widget and search functionality. (Privacy Policy)
      Marketing
      Google AdSenseThis is an ad network. (Privacy Policy)
      Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
      Index ExchangeThis is an ad network. (Privacy Policy)
      SovrnThis is an ad network. (Privacy Policy)
      Facebook AdsThis is an ad network. (Privacy Policy)
      Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
      AppNexusThis is an ad network. (Privacy Policy)
      OpenxThis is an ad network. (Privacy Policy)
      Rubicon ProjectThis is an ad network. (Privacy Policy)
      TripleLiftThis is an ad network. (Privacy Policy)
      Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
      Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
      Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
      Statistics
      Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
      ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
      Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)