How To Boost Hemp Farmers During The Pandemic Without A Taxpayer Bailout: Regulate CBD
By Jonathan Miller, General Counsel for the U.S. Hemp Roundtable
In passing the 2018 Farm Bill, Congress made clear its intent to support the production and sale of hemp and hemp derivatives such as CBD. Thousands of U.S. growers planted hemp in response, with farming for CBD representing the overwhelming majority of all hemp acreage.
An economic boom was predicted: one economic survey projected sales to grow from approximately $1.2 billion in 2019 to $10.3 billion by 2024. Another study estimated a $2.5 billion market by 2023 alone for foods and beverages featuring CBD (of an estimated $23.7 total CBD market).
Unfortunately, public statements by FDA officials arguing that it is illegal to sell ingestible hemp-derived CBD products have taken a toll on the industry. While the agency has primarily taken action against companies that have made improper disease claims, and while FDA officials have announced that they are investigating a regulatory pathway for CBD products, CBD commerce and investment have been chilled due to the absence of federal regulation, impairing economic opportunity for farmers and small businesses.
Worse yet, without a clear regulatory framework, bad actors are selling products without appropriate safeguards, and misleading consumers with false label claims.
The COVID-19 crisis also looms heavy on the hemp industry as the outbreak has had a drastic effect on farmers and businesses, and as a result, are in dire need of economic recovery. Recent research by Hemp Benchmarks has found that aggregate prices for hemp CBD biomass, crude oil and seeds have dropped between 19-46% during the height of the pandemic. Meanwhile, farmers producing hemp were deemed ineligible by the USDA for billions of dollars of Coronavirus Food Assistance Program funds.
Though online sales of CBD appear to have ticked upwards, total sales have declined due to the pandemic, and disruptions in labor and transportation are expected to exacerbate this trend. Hemp growers have registered over 39,000 acres of land for hemp production in anticipation of a robust market for their raw material. These crops could sit unpurchased if there is no manufacturing and retail industry to which their product can be sold.
There’s a simple solution: regulate CBD.
Once the FDA does so, the hemp industry can provide a needed financial jolt to a nation emerging through economic recovery. Regulatory relief for the hemp-derived CBD industry constitutes an economic stimulus package for the nation’s farmers and small businesses without requiring one dime from the American taxpayer. Wider availability through additional retail venues and product manufacturers would address consumer demand and help stabilize hemp prices, posing tremendous economic opportunity to U.S. farmers struggling through the pandemic. One economic study forecasted that hemp sown for CBD could potentially generate substantially more revenue per acre than corn.
In addition, unlike existing industries that will struggle to return workers to their jobs, the hemp industry would be able to offer brand new jobs immediately in agriculture, manufacturing, distribution, retail, testing and other fields that serve the hemp supply chain.
Hemp is poised to become a substantial industry that provides tremendous benefits to the farmers and small businesses. We are not looking for a handout – merely to be treated as any other agricultural commodity, with CBD regulated as any other ingestible and topical products. And if action is taken soon, hemp could provide the nation a needed economic boost during this unprecedented pandemic.
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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