Congress Continues to Bolster Hemp in New Appropriations Act

As anyone involved in the industrial hemp (hemp) and hemp derived cannabidiol (CBD) industry knows, Congressional restrictions on the use of federal funds to interfere with hemp have proven extremely helpful. Not only have the restrictions kept the overzealous Drug Enforcement Administration (DEA) at bay, but they have also provided a clear window into Congressional intent with respect to the hemp provisions of the 2014 Farm Act. (When was the last time you heard someone assert that interstate hemp commerce is illegal? I hope that you responded by referencing the consecutive appropriations act provisions that explicitly prohibit federal funds from being used to interfere with the “transportation, processing, sale, or use” of hemp.)

Congress has struggled to pass comprehensive budgets. This has placed the provisions protecting hemp in jeopardy. Fortunately, and despite any number of non-hemp related problems with it, the $1.3 trillion spending package called FY18 Agriculture, Food and Drug Administration, Rural Development, and Related Agencies Appropriations Act (Budget Act) protects hemp through September. The Budget Act even adds a provision not found in prior spending acts which encourages grant funding for hemp research. This continues the trend of expanding protections for hemp as each new budget is rolled out. The Budget Act contains the following hemp provisions:

SEC. 537. None of the funds made available by this Act may be used in contravention of section 7606 (‘‘Legitimacy of Industrial Hemp Research’’) of the Agricultural Act of 2014 (Public Law 113–79) by the Department of Justice or the Drug Enforcement Administration. [Page 239]

SEC. 729. None of the funds made available by this Act or any other Act may be used—
(1) in contravention of section 7606 of the Agricultural Act of 2014 (7 U.S.C. 5940); or
(2) to prohibit the transportation, processing, sale, or use of industrial hemp, or seeds of such plant, that is grown or cultivated in accordance with subsection section 7606 of the Agricultural Act of 6 2014, within or outside the State in which the industrial hemp is grown or cultivated. [Page 98]

SEC. 730. Funds provided by this or any prior Appropriations Act for the Agriculture and Food Research Initiative under 7 U.S.C. 450i(b) shall be made available without regard to section 7128 of the Agricultural Act of 2014 (7 U.S.C. 3371 note), under the matching requirements in laws in effect on the date before the date of enactment of such section: Provided, That the requirements of 7 U.S.C. 450i(b)(9) shall continue to apply. [Page 99] 

The “in contravention” language is used in both section 537 and 729. Additionally, section 537 calls out the Justice Department and its sub-agency, the DEA, by name. Neither needed to be addressed since their entire budgets consist solely of federal funds. Moreover, the DEA didn’t need to be mentioned at all since it is wholly encompassed by the DOJ. This amounts to redundancy piled upon redundancy. For all of its flaws, Congress is rarely this redundant in the statutory language it uses. Clearly, this redundancy was employed because Congress believed it was necessary in order to underscore the fact that the DEA is to keep away from hemp. Congress has been particularly vocal about the DEA’s interference, as can be seen in the amicus brief filed in the pending 9th Circuit Hemp Industries Association v. DEA case by a group of 28 bipartisan members. Among other things, the brief states that the DEA is “unreasonable” and that it “did not intend to follow the direction of Congress” with respect to hemp.

I should also note an often overlooked point: to the extent state actors, such as local law enforcement agencies, receive federal funds they are also bound by these provisions.

This is a solid and continued victory for hemp.

Postscript: As I’ve stated before, the hemp provisions are often confused with section 538 of the Budget Act [page 240], usually called the “Rohrabacher–Blumenauer amendment” (Amendment) which deals with medical marijuana. Although similar in that all of these provisions restrict Federal funds from being used to interfere with cannabis (medical marijuana programs- section 538, and hemp programs- sections 537 and 729), they are wholly different and apply to two completely separate things. We are indebted to the Representatives who have sponsored and pushed through the Amendment, often against strong opposition, since 2014. But, don’t confuse their work regarding medical marijuana with the spending provisions regarding hemp.

Rod Kight is a lawyer based in Asheville, NC. He is licensed in North Carolina and Oregon and represents legal cannabis businesses. You can contact him directly here.

Posted: 3-26-2018