Glossary of Hemp Terms and Laws
June 01, 2018 | Big Rock
When you’re knee, dare I say, brow, -deep in the cannabis culture, industry, and market, there are certain terms used and laws referenced internally that just don’t simply translate to those not here in the day to day. The regulations at all levels change so quickly even us in the industry struggle to keep up. At Big Rock HQ, a frequent topic of conversation is TRANSLATION. How do we translate this to consumers? How do we translate this to investors? How do we portray the industry in a transparent and objective way?
This is a problem with mainstream media coverage of the cannabis industry at the moment. Sensationalized stories, and pitch decks alike, illustrate cannabis as the next frontier, the green rush is coming. Yet tax revenues are coming in nearly 50% less than projected. Q1 and Q2 of 2018, California was expected to take in $136 million in cannabis excise tax revenue. Real numbers for Q1 came in at $34 million. So why aren’t we reporting on the real situation, where are we getting it wrong?
I often kid that we need the “NPR of weed” – but is this a joke? No, I really think we need it! Who is we? Everyone who lives in a state considering medical and recreational allowances for cannabis and hemp. If this is happening in your state, in your county, and *fingers crossed* eventually your country, you deserve a reasonably easy-to-understand-definition of the terms everyone is using.
Over the course of the next few weeks, I’ll be focusing on industrial hemp and its marriage to cannabis regulations. We will talk about the history of legalization, how it got to be part of the prohibition in the first place, where it is on the regulatory path now, and potential future implications for the market. Before we get into any of that, there are laws and terms that will continue to be referenced that may seem foreign that need definitions attached to them to really understand what is going on. So here is part one: Glossary of Hemp Terms and laws you need to know. I’ll refer back to this glossary and expand as needed as we move along.
CBD, or cannabidiol, is a non-psychoactive compound found in the cannabis plant.
Controlled Substances Act
The Controlled Substances act was passed by the 91st US Congress and signed into law by President Richard Nixon in 1970. Defined by the DEA The Controlled Substances Act (CSA) “places all substances which were in some manner regulated under existing federal law into one of five schedules. This placement is based upon the substance’s medical use, potential for abuse, and safety or dependence liability.”
Under the controlled substance act, cannabis is defined as follows:
The term “marihuana” means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.
2014 Farm Bill
The 2014 Farm Bill, also known as the Agricultural Act of 2014, was signed by President Obama and cracked open the door on industrial hemp cultivation under limited circumstances. The law allows universities and state departments of agriculture to grow or cultivate industrial hemp if the cultivation sites are certified and registered with the state and meet the following two qualifications:
“(1) the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and
(2) the growing or cultivating of industrial hemp is allowed under the laws of the state in which such institution of higher education or state department of agriculture is located and such research occurs.”
Industrial Hemp Farming Act
In 2015 the Industrial Hemp Farming Act was introduced by a group of U.S Senators. The Act expanded the permission to produce and cultivate hemp to farmers outside of universities and research purposes that the 2014 Farm Bill allowed. This bill was important in that it gave the power to individual states to create their own hemp regulatory structure as long as they were reasonable within federal guidelines and made the following 2 distinctions
(1)The term ‘marihuana’ does not include industrial hemp.
(2) The term ‘industrial hemp’ means the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.’’.
Marihuana Extract Rule – Establishment of a New Drug Code for Marihuana Extract
On December 14, 2016, the DEA implemented new rules regarding CBD when it defined “marihuana extracts” to include any extract “containing one or more cannabinoids that has been derived from any plant of the genus Cannabis.” At the time, this appeared to move CBD and other non-psychoactive compounds into the Schedule 1 category that also includes “heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote.”
Statement of Principles on Industrial Hemp
On August 12, 2016 the U.S. Department of Agriculture, DEA, and USDA came together and issued a statement on the Federal Register that clarified language in the 2014 Farm Bill regarding activities related to hemp. It gave further guidance to the states on creating their own regulations and also touched on areas such as import and export of hemp products.