The pros and cons for CBD business owners in regard to state vs. federal regulations
Are you a business owner?
If you’re not, imagine for a moment that you’re opening your doors for the first time.
Before you do, however, you have a few bureaucratic hoops to jump through. Every business owner is aware of this.
However, what if you’re starting your own CBD business?
Expect those hoops to close while you’re mid-jump, possibly open up again, and then disappear altogether. Yes, owning a CBD business in this day and age can be a bit confusing.
On December 20, 2018, the 2018 farm bill was signed into law. In effect, this move changed the federal government’s stance on hemp. Most importantly, the bill removed hemp and its derivatives from the CSA, according to the FDA.
But is that the full story?
According to a 2019 paper, the answer is no .
Most importantly, the CSA doesn’t define hemp, it defines “marihuana.”
To fully deschedule CBD, there is an administrative process in which:
- The FDA conducts an “eight-factor analysis”
- The DEA listens to their assessment and further analyzes abuse potential
- The DEA issues a proposal in the Federal Register which accepts comments from the public
- The DEA responds and issues their Final Rule which can be delayed by up to two years through a hearing request
However, as the farm bill was written, the word “hemp” was differentiated from “marihuana” as it’s written in the CSA. While CBD remains a Schedule I drug because it’s a constituent of cannabis, hemp-derived CBD has been legalized.
While the farm bill establishes that hemp production and processing must be licensed, it allows interstate commerce up to the states. So long as production and trade are licensed, the federal government has little interest in interfering with state-level activities such as their hemp industries.
The way the regulations are set up now makes it both beneficial and problematic for CBD business owners.
Pros of the current regulations:
- Improved commerce
- Expanded hemp industry
- State- and national-level competition between brands
- More research into the benefits of CBD
- More manufacturers will be encouraged to develop new CBD products
Cons of the current regulations:
- Varying regulations between the states
- Poor quality control standards across the industry
- The federal government could issue new regulations at any time
It’s not easy owning a CBD business; what other pros and cons do you see in the current system?
- Mead, Alice. “Legal and Regulatory Issues Governing Cannabis and Cannabis-Derived Products in the United States.” Frontiers in plant science vol. 10 697. 14 Jun. 2019. [Times cited = N/A; Journal Impact Factor = 4.298]