Forty-Five years after building his first car, Henry Ford remained an innovating pioneer by creating an automobile constructed partly of hemp and fueled by hemp derived gasoline.
Where would Michigan’s industrial hemp production be today if hemp hadn’t been clumped together with its plant cousin marihuana and labeled dangerous? Good question! Michigan is getting a reboot when it comes to hemp production with the passage of the 2018 Farm Bill. The plant is now classified like other crop commodities and Michigan has the opportunity to pick up where Ford left off and become an industry leader in the growth, processing, and distribution of industrial hemp.
Combined with the November 6th passage of Proposition 1, Michigan businesses are poised to play a significant role in the burgeoning local and national legal cannabis industry. Given our proximity to Canada, there also exists international business possibilities with our neighbors to the North. Canadian businesses have taken a shine to Michigan by partnering with and acquiring Michigan-based cannabis businesses.
For a state with an economic base that includes agriculture, Michigan farmers are standing on the precipice of the future. With a little guidance concerning the specifics of farming hemp crops combined with existing farming expertise, hemp might just be the ideal rotational crop to supplement or boost a farming business. Michigan farmers need only to take hold of the vision, courage, and foresight that propelled Henry Ford all those years ago.
For those interested in getting into the industrial hemp business here are a few tips to keep in mind, although before you commit financial or human resources, you should consult a legal expert familiar with the laws and regulations specific to the cannabis and hemp industries.
5 Key Provisions of the 2018 Farm Bill and Michigan Proposition 1
1. The definition of marihuana, under both laws, specifically excludes industrial hemp. The newly revised definition of industrial hemp, which distinguishes industrial hemp from marihuana, is a return to the honest and common-sense approach that was in place before the enactment of Marihuana Tax Act of 1937. For a Cannabis Sativa plant to be industrial hemp, the THC content (the compound which produces a psychoactive effect) can be no greater than 0.3 percent. Additionally, the crop must be farmed in accordance with state and federal regulations.
2. Hemp is now like other commodity crops. One significant benefit of this distinction is the availability of crop insurance under the Federal Crop Insurance Act. This will be meaningful for farmers who may want to venture into the cannabis farming market. Crop insurance will provide coverage for losses incurred during the ordinary course of agricultural production while still allowing farmers to expand their fields to include this rotational crop.
3. Treating hemp like other commodity crops means regulation by the United States Department of Agriculture (USDA). This is important because the passage of these laws does not create a free-for-all as some in the media have incorrectly portrayed the current state of the law. Businesses will still have to obtain a state or federal license to legally farm industrial hemp.
4. The Farm Bill allows for the legal transportation of industrial hemp and hemp products across state lines, as long as it was grown by following state and federal laws. This could be helpful and lucrative for farmers who may choose to cultivate hemp crops but who do not possess the means to process them. Currently, Oregon has the largest number of processing facilities. Farmers can engage in the interstate transport of their product without fear of running afoul of facing criminal charges. This, however, will only be necessary until the next Ford-inspired entrepreneur opens a processing facility within our borders. Maybe she or he could locate it near the site of Ford’s biomass conversion plant which produced hemp fuel in Iron Mountain, Michigan.
5. The Farm Bill removes hemp-derived products, namely CBD, from the Controlled Substances Act. This exemption applies only to CBD derived from hemp produced in a manner consistent with the federal and state regulations and by a licensed grower. All other CBD produced in any other manner is still considered a Schedule I substance under federal law and therefore illegal.
About the author:
Shoran R. Williams, Esq., is licensed to practice law in Michigan and Georgia and can be reached at the Cannalex Law offices by calling (616) 454-6611 ext. 114 or on her cell at (678) 637-9954.
If you are a farmer or processor with questions about Michigan’s industrial hemp regulations and law, Cannalex Law is here to help.