Spending bill showdown threatens interstate hemp and CBD trade.

Congress and the Trump Administration appear to be at loggerheads over a spending bill that must be passed by April 28 in order to avert a government shutdown. The primary issue, for anyone who has been in a news-free bubble during the last few days, is Trump’s insistence that the bill include appropriations for his much-touted border wall. As of this writing, Trump has signalled that he will likely back down from his demand in order to avoid a shutdown. Although Trump’s presidency to date has been marked by uncertainty, it appears unlikely that we will see a stalemate on the new spending bill this week. I expect that something will get passed in order to keep the government funded.

One key issue that has been overlooked in the media with respect to the spending bill is the future of interstate trade in industrial hemp and its products, including cannabidiol (CBD). Currently, interstate trade in domestically cultivated industrial hemp (which I’ll refer to simply as “hemp” in this post) is premised on one simple clause in a large funding bill. Absent that clause, interstate hemp commerce would not exist. The clause is found in The Omnibus Appropriations Act of 2016 (P.L. 114-113) (“the Funding Act”), passed on December 18, 2015, and renewed through April 28, 2017. It contains a provision at section 763 that reads:

“None of the funds made available by this act or any other act may be used… to prohibit the transportation, processing, sale or use of industrial hemp that is grown or cultivated in accordance with section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated.”

I’ve written about this clause (“Section 763”) before and won’t delve into much detail about it now. You can read my comments on it here, here, here, and here.

Critically, if a new spending bill is passed that does not include this, or similar, language then interstate trade of domestically cultivated hemp cannot lawfully proceed. I reached out directly to Senators Paul and McConnell, co-sponsors of Section 763, last week and inquired about its status in the new spending bill. I’ve yet to receive a response. (If we do end up having a government shutdown then no Federal funds can be used to prohibit anything, including interstate hemp and CBD commerce. But, of course, a complete government shutdown would bring a host of other issues.)

If you’re concerned about interstate hemp and CBD commerce then I recommend contacting Senators Paul and McConnell and your Congressional Representatives today and let them know that the language of Section 763 should be included in any new spending bill. Also, since reliance on a single clause in a spending bill is a bad way to underpin trade in an entire industry, I recommend that you also demand a comprehensive Federal hemp law that explicitly authorizes interstate hemp trade. Given the current size of the hemp market and its massive growth potential, it’s not too much to ask of our Representatives to have some certainty when it comes to something as simple and necessary as interstate trade laws.

If you have any news or information to share regarding the status of the spending bill as it relates to hemp then please let me know.

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 4-25-2017.