2019’s overproduction is under the bridge. The USDA has weighed in, largely—but not entirely—positively. The FDA’s slow walk stands in the way.
Peaks and valleys. Booms and busts. Hemp—and in particular its supplement darling cannabinoid called cannabidiol, or CBD—has been on a wild ride since the 2014 farm bill gave it an opening to the market.
After the next farm bill was signed in December 2018, the next year was going to be a boom year. Hemp acreage planted shot up from 77,000 acres to close to half a million. Maybe it had too much too fast, but that was far too much hemp to accommodate even the booming CBD market. Prices crashed and the industry experienced the great storage experiment.
Meanwhile, the Food and Drug Administration held a wildly attended public meeting in March 2019 to try to get a handle on the state of CBD. This was right around the time FDA commissioner Scott Gottlieb announced his retirement, but not before noting two things. One, that the cat was out of the bag with CBD. Two, that it would take the agency a good three to five years to come up with a rule to regulate the cannabis component.
The three to five year time horizon was met with widespread derision. However, two years later and the FDA is still on that selfsame path.
Meanwhile, the USDA has weighed in, amending its rule to accommodate the concerns of hemp farmers—by no means entirely, but a little.
In particular, while the 2018 farm bill specifically regulated the Drug Enforcement Agency (DEA) out of hemp, the USDA rule put the DEA right back into the middle of things.
“The DEA,” said Tim Gordon, chief science officer of the Functional Remedies hemp CBD brand, “should stand for, ‘Don’t Enter Agriculture.’”
Nevertheless, industry players and observers are looking at 2021 settling down. Between 2019’s overzealous overproduction, the revised USDA rules, and COVID times, a more clear-eyed look ahead reigns.
“I don’t see it taking a massive leap forward,” said Frank Robison, attorney at the Robison Law Group. “but I do see a more stable market.”
And in the frothy hemp and hemp CBD market, where there is stability there is a sense of recovery.
“We will see a recovery year,” said Garrett Graff, managing partner at the Hoban Law Group. “We’ll see more positive things.”
Graff in particular noted the capital access situation will improve. The regulatory progression with the Biden administration, Congress, the USDA and FDA. State legislatures that were shuttered during the 2019 pandemic should re-open.
“2019 was hard to push the ball forward,” said Graff. “This year will lead to better things.”
For those who are taking the long view, this is a time to breathe, regroup, and keep the proverbial ball moving.
“This will be a recovery year,” said Shawn Hauser, partner at the Vicente Sederberg law firm. “It will be a notable year for cannabis reform in general, and with hemp.”
She is patient with the FDA, acknowledging that the agency “has a long way to go” to gather the information it needs to settle in on safety and usage recommendations.
At the same time, she sees much of the CBD industry’s continued success relying on the FDA to regulate the market appropriately. That means allowing consumer access to CBD supplements, and not just harboring cannabinoids for pharma purposes.
“It takes time to come out of prohibition that’s been under prohibition for decades,” said Hauser. “To know how to regulate it effectively. It’s still early years of the industrial hemp industry.”
That long view is helpful, required even, even if at the same time advocates must remain diligent. Opportunities abound to push Congress to pass legislation to allow greater access to cannabinoid medicine, and to work on the state level to make sure access is maintained. The ups and downs are more or less par for the course for any fledgling industry.
“It’s part of the evolution,” said Gordon. “It’s because of people on the front lines, the legal teams, representing trade groups and companies. We will see the industry come into itself.”