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As hemp production booms, Rep. Collin Peterson works to expand the CBD market

Peterson has a new bill that would allow the FDA to regulate CBD products as supplements, rather than drugs, opening the way for new products.

By 2019, Minnesota grew 8,000 acres of hemp and used 400,000 indoor square feet of growing space, 78 percent of which was used to produce CBD.
MinnPost photo by Corey Anderson

In Minnesota, hemp farming looks different these days. Joe Radinovich, the executive director of the Minnesota Hemp Association (MHA), has one word to describe it: an “explosion.”

In 2018, only 10 percent of the state’s 700 acres of hemp were used to produce CBD, according to the MHA. By 2019, the state grew 8,000 acres of hemp and used 400,000 indoor square feet of growing space, 78 percent of which was used to produce CBD.

“There’s been this explosion, obviously, in the extraction market,” said Radinovich, who previously ran to represent the Eighth District in Congress in 2018 and now leads the MHA.

But there’s a problem for hemp farmers and refiners: Hemp prices are falling as CBD demand isn’t matching production. At the same time, CBD products cannot be marketed as dietary supplements or health products, meaning they have very narrow opportunity to be sold.

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Rep. Collin Peterson wants to help. Peterson’s bill, H.R.5587, would change the way the Food and Drug Administration regulates CBD-products, allowing CBD to be marketed as a dietary supplement. Additionally, it would require the U.S. Department of Agriculture to study market barriers for hemp.

“I know folks in my district that are excited about the potential for hemp, and while I want them to recognize that there’s still a ways to go yet, I also want to help establish a roadmap to get there,” Peterson, the Chair of the House Agriculture Committee, told MinnPost.

“That’s what the bill is about – setting a path to viability for hemp and CBD that focuses on the people who produce it.”

The history

Peterson’s bill is a small chip at much larger barriers for the hemp market.

“One thing that’s kind of holding it back is still a sense that we don’t know where these regulations are going. And I think that Chairman Peterson’s bill is a good step,” said Radinovich.

Rep. Collin Peterson
MinnPost photo by Walker Orenstein
Rep. Collin Peterson
Hemp is a strain of cannabis specifically grown for industrial use. Unlike the commonly used drug form, hemp has low levels of THC, tetrahydrocannabinol, the primary psychoactive compound in the plant. Any plant with a THC content over 0.3 percent is classified as an illegal drug by the federal government. While extraction from cannabis varieties with higher THC content is illegal, CBD, or cannabidiol, can as of recently be extracted from hemp.

The history of hemp farming has been fraught with regulatory hurdles. Federal law passed in 1937, the Marihuana Tax Act, did not distinguish hemp from other cannabis, effectively making hemp production too expensive. There was a brief government effort to produce hemp during World War II, when the U.S. government released a documentary called Hemp for Victory, to encourage hemp production for the war. All forms of cannabis were banned under the Controlled Substances Act in 1970.

The growth of hemp on such a large scale is a recent development. Pilot programs were only recently authorized by the 2014 Farm Bill, which allowed allowed states to develop limited amounts of farm to grow and study the production of hemp in coordination with the U.S. Department of Agriculture. More recently, the 2018 Farm Bill, championed by Peterson, went further: allowing the transfer of hemp products across state lines and placing no restrictions on the sale or possession of hemp-derived products. It also created a legal pathway for creating products containing CBD.

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In 2016, the Minnesota pilot program allowed six participants to grow hemp, the first time hemp was grown in Minnesota since the 1950s. By 2018, there were 51 participants.

Relaxing of CBD regulations 

Peterson said that he recently visited a plant in western Kentucky, in an area that’s represented by Rep. James Comer, R-Kentucky, where they’re making flooring out of hemp. “There’s a lot that we can do, but not much clarity on how we’re going to do it,” he said. “Farmers deserve a straight answer to the question of what’s standing between them and developing this market.”

His new bill has support from both sides of the aisle, with three initial co-sponsors: Comer, Rep. Chellie Pingree, D-Maine, and Rep. Thomas Massie, Thomas, R-Kentucky.

MinnPost photo by Brian Halliday
Joe Radinovich
“I think I’m the only member of Congress that said in a committee hearing that I take CBD oil,” Comer told Bloomberg News. “After the meeting, members in Congress from both parties started coming up to me, whispering in my ear they take CBD oil, too.”

While the relaxing of regulation for CBD is new, so is the research into what exactly CBD can effectively treat. There is not a lot of scientific consensus on what CBD is effective for, nor conclusive suggestions on how much of a dose should be taken for therapeutic use.

Under the Trump administration, Radinovich described a double edged sword. He said that while the 2018 Farm Bill signed by the president has undoubtedly allowed hemp to go from a pilot program to a full-scale program, recent interim rules issued by the USDA for hemp could damage the industry.

The key issue in the new proposed rules: requiring fields to be tested within 15 days of harvest and tested in a lab registered by the Drug Enforcement Administration (DEA). Advocates for the industry, like the Minnesota Hemp Association, say that’s entirely untenable when compared to the current 30-day rule. Additionally, the new rules require that the crop cannot be harvested until the results are returned.

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The proposed rules are “extremely problematic for hemp farmers,” said Radinovich. “And in my opinion, represent a clear step backward from the pilot program rules that we were operating under here, at least in Minnesota.”

Peterson echoed Radinovich. “I appreciate USDA’s work getting the rule out, but folks I talk to says it misses the mark for a workable program. That‘s why pioneering states like Minnesota and Kentucky are choosing to operate under the authorities contained in the 2014 Farm Bill. I have concerns with guidance USDA issued on testing, sampling, and the involvement of the DEA,” he said.

“We need a program that will work for states and growers, and we aren’t there yet.”