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U.S. Senators recently proposed a law called the Cannabis Administration and Opportunity Act (CAOA) to legalize cannabis at the federal level. However, industry officials say the language in the new bill could also have a big impact on the hemp industry.

Last month, Senate Majority Leader Chuck Schumer, DN.Y., Chairman of the Senate Finance Committee, Ron Wyden, D-Ore., And Senator Cory Booker, DN.J., released preliminary draft law Legalization of cannabis at the federal level.

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However, the CAOA also makes multiple references to hemp and hemp-derived products – and raises questions about it, said Rick Fox, co-chair of the Government Relations Committee of the National Industrial Hemp Council (NIHC) and CEO and co-founder of Vermont. based on meristem farms.

For example, the proposed lawmakers encourage separate federal agencies to regulate hemp and cannabis. They also support the labeling of cannabidiol (CBD) as a supplement with recommended dosage limits.

The offices of the sponsors of the Senate are asking for a public statement by September 1st. Getting feedback is not required from the legislature, but from the executive agencies, Fox said, adding, “They really go beyond what is asked of them to try.”

THC limits for hemp

Cannabis that exceeds 0.3% delta-9-tetrahydrocannabinol (THC) would be removed from the Controlled Substances Act under the CAOA. The question that remains is whether “hemp” should be redefined, said Fox, who makes CBD-dominant hemp flower products or “resin hemp” at Meristem Farms, which has locations in Vermont, Michigan and California.

The Agriculture Improvement Act of 2018 (the 2018 Farm Bill) defines hemp as a cannabis sativa that does not exceed 0.3% Delta-9 THC without mentioning limits for other intoxicating THC isomers such as Delta-8 THC. The USDA’s final hemp rule further defines hemp by its “total THC” content, which also takes into account the decarboxylated tetrahydrocannabinolic acid (THCA) that has been converted to delta-9 THC. In addition, the last rule states: “Delta-8-THC is unrelated to the 0.3 percent Delta-9-THC limit or the ‘Post-Decarboxylation-Delta-9-THC’ that is used in of this rule are defined and required. “

“Obviously, other cannabinoids like Delta-8 are getting a lot of attention in the industry these days, in addition to Delta-9,” said Fox. “So should the federal definition of hemp be changed to better match what is being done in this bill? Should it include all tetrahydrocannabinols and set the threshold at, for example, 1% – what the National Association of State Departments of Agriculture recommended … to vote in favor of the recommendation in February? “

NIHC also supports increasing the THC limit for hemp from 0.3% to 1%. “We pushed for it from the start because it’s better for farmers,” said Fox. “Many of the varieties are slightly above 0.3, but not above 1%. It benefits farmers financially as the CBD content of hemp is directly correlated to the total amount of THC in the plant. When you limit [THC] you essentially also limit the CBD yield to 0.3. “

Fox points out that Dr. Ernest Small, Ph.D., a researcher whose work with cannabis in the 1970s influenced the US setting the 0.3% hemp-THC limit, more recently said a 1% limit was more reasonable.

Last week there were several separate congresses on this topic. The US Senate Grants Committee voted on Aug. 4 to increase funding for the US Department of Agriculture (USDA) and the US Food and Drug Administration (FDA) and stated in an accompanying report: “The committee is concerned That the level of allowable THC levels in hemp can be arbitrary and place a burden on hemp producers that is not supported by scientific evidence. The committee instructs the USDA to work with the Department of Health and Human Services and the Drug Enforcement Administration to investigate and report to Congress whether there is a scientific basis for the current limit of [0.3] Percent THC in hemp and suggest alternative values ​​if necessary. “

Taxes and permits

The CAOA would require wholesalers of cannabis products to obtain approval from the US Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB), while the USDA would retain regulatory control over hemp production.

“I don’t know TTB spends a lot of time on farms or even deals with farmers,” said Fox. “I think we should look at how grapes, grains for distillation [alcohol] and tobacco leaves are regulated before and after the farm and see if there could be a better approach here. “

The CAOA proposal also provides for an excise tax on cannabis, which is staggered from 10% for the first calendar year of the draft law and the following year to 15% in the third year of entry into force, 20% in the fourth year and 25% in the fifth year . As currently written, this tax would not apply to hemp, which falls under a separate definition.

Fox said he believed that hemp shouldn’t be taxed like cannabis. “We all want to make sure … resin hemp is available through retail stores in ways that aren’t as limited as high THC levels,” he said.

CBD in foods and supplements

The CAOA would also help create a legal avenue for the inclusion of CBD in dietary supplements, lifting the “ban on marketing CBD as a dietary supplement” and requiring that “certain dietary supplements … CAOA draft discussion.

However, Fox said that according to current CAOA language, CBD might not be legally allowed in food. “This proposal actually puts forward a House bill that would call hemp-derived CBD a supplement, but only a supplement,” Fox said. “There is a Senate bill that would effectively allow all hemp products, including CBD, in supplements and foods, and there are many reasons why this approach would be better. We will certainly address that to the sponsor offices here. “

NIHCS spokesman Larry Farnsworth told cannabis growers that banning CBD in food would cause market disruption as many farmers produce CBD for food.

Citing statistics from NIHC economists, Farnsworth said, “In the US, 45% of all hemp is grown for CBD; 45% of that is used for food, 40% for cosmetics and 15% for dietary supplements.”

The CAOA states that manufacturers of CBD supplements would be obliged to produce dietary supplements that adhere to daily consumption limits that have yet to be set.

Fox said he believes that nutritional supplement serving sizes should be clearly labeled so consumers know how much they are consuming. However, NIHC does not have a formal stance on Maximum Daily Values ​​as more research is needed on CBD dosages.

Some herbal supplements have serving sizes with an asterisk, which means that a maximum daily value has not been set because they can affect different consumers differently, Fox said.

“I think there are a lot of stakeholders who would say the same logic [could apply] CBD and hemp, if not cannabis, ”said Fox and gave his personal opinion. “But the political reality is that people have concerns, so if [having maximum daily values] helps them overcome concerns, then so be it. “

Regarding CAOA in a broader sense, Fox said that NIHC is pleased with the willingness of sponsors to seek and respond to feedback from the hemp and cannabis industry, adding, “We’re all excited – not the suggestion, but rather the one How the sponsorship bureaus are handling contacting and soliciting input. “