Hemp Legalization in Indian Country


Hemp Legalization in Indian Country

January 7, 2019

Recently, Congress passed the Farm Bill, which contained a provision fully legalizing industrial hemp production for tribes and states, undoing an 80-year-old prohibition. Hemp legalization opens up economic opportunities for tribes and tribal entrepreneurs across Indian Country looking to invest in or produce industrial hemp, which can be used for a wide variety of everyday products like medicine, clothing, food, office supplies, and even automobiles.

What This Means for Tribes

In legalizing industrial hemp production, the Farm Bill explicitly recognized tribal authority to regulate industrial hemp on their lands on par with states. Under the new law, tribes can develop their own hemp cultivation plans and programs regardless of state action, which is a significant departure from previous hemp policy. Under previous law, tribes could only grow industrial hemp if the state in which they are located had opted to participate in a hemp research pilot program authorized by the 2014 Farm Bill.

In support of interstate commerce, the new law also contains a provision ensuring that states that do not adopt a hemp program cannot interfere with the transportation or shipment of industrial hemp from states or tribes that have regulated its use.

Federal Oversight

Once a tribal government has submitted a plan, the U.S. Department of Agriculture has 60 days to approve or disapprove the plan. Additionally, the law authorizes the USDA to provide Technical Assistance to support tribes as they develop their hemp plans. Any industrial hemp producer that fails to comply with an approved tribal plan may be prohibited from producing hemp for a period of time or even face criminal penalties.

The Farm Bill also states that the Food and Drug Administration (FDA) has the authority to regulate industrial hemp and industrial hemp products, meaning that hemp-based products are subject to the same regulatory requirements as other substances regulated by the FDA.

Separating Hemp and Marijuana

Although hemp and marijuana are both considered cannabis, hemp is much different from marijuana in its function, cultivation and application. Most notably, hemp lacks the high concentration of tetrahydrocannabinol, or THC, that is responsible for the "high" that one feels from marijuana. The bill recognizes this by removing hemp from the definition of marijuana under the Controlled Substances Act (CSA), meaning that the CSA will clearly acknowledge two different types of cannabis: hemp and marijuana. 

For practical purposes, industrial hemp is defined as the part of a cannabis plant containing less than 0.3% THC and will now be considered an agricultural commodity just like any other. The part of the cannabis plant with more than 0.3% THC, on the other hand, will still be considered “marijuana” and remain a Schedule I substance under the CSA. 

The new law also broadens the definition of industrial hemp to include “all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers” of hemp. That definition opens the door for participation in the fast-growing cannabidiol (CBD) industry used by consumers to treat seizures, pain, anxiety, and other ailments.

Addressing Banking Challenges and More

Industrial hemp legalization addresses the challenges that many businesses in the cannabis industry currently experience, including lack of access to banking, bankruptcy, and federal intellectual property protections. With legalization, banks can start providing accounts and financial services to hemp businesses with greater confidence since they will not be subject to criminal penalties. It is important to note that until the federal prohibition on marijuana is lifted, medicinal and adult use marijuana businesses will continue to face these problems. 

If you have any questions or concerns, please contact Ryan Ward at Ryan@nafoa.org or (202) 594-6593.


H.R.2 - Agriculture Improvement Act of 2018