Although states weren’t given a strict deadline for submission of their own plans, it was noted in USDA interim rules that previous federal statute governing cultivation of hemp (the 2014 Farm Bill) expires at the end of October. That means hemp industry insiders in states that don’t turn in their hemp cultivation and production plans prior to Oct. 31, 2020 may have issues if their practices are not consistent with federal law.

As a longtime Los Angeles CBD lawyer, I have been closely watching these developments in California. In 2019, state lawmakers passed SB-153, a measure that required the state’s attorney general and department of food and agriculture to team up and put forth a hemp production plan to the federal agriculture department by no later than May 2020. However, that did not happen. According to the USDA, the feds are still waiting on California’s plan.

The California Department of Food and Agriculture reports that the state is “in the process of developing a state plan.” The agency further asserts that for this reason,growers of hemp in California aren’t subject to federal hemp-growing rules. However, hemp growers in states that don’t have a regulatory plan that has been approved or is pending can apply for a hemp production license from the USADA. The state department says that while its regulatory plan for hemp growing and production was finished prior to the May deadline, the law necessitates it be submitted, reviewed and approved by both the state attorney general’s office and the governor’s office. That is what the agency’s waiting on right now, and the plan has (understandably) been dealing with much else in the midst of the pandemic.

That sort of leaves the state’s hemp industry in limbo. When the 2014 Farm Bill expires, hemp cultivators in California may need to apply for federal licensing. Consulting with an experienced Los Angeles hemp cultivation attorney is a smart idea to ensure you are ahead of the curve no matter how this unfolds. It should be noted that regardless of any federal requirements, all hemp growers in this state must comply with existing California laws and regulations, as well as any applicable local restrictions.

Currently, there are no state law restrictions specific to the importation of industrial hemp seeds and plants into the state, though imports may be subject to agricultural inspection. However, if you’re importing seeds internationally, that is restricted by the USDA’s list of requirements.

As far as transport of hemp, oil, seed, fiber, cake or any compound of hemp, registrants should have ready an original report of the lab testing. Drivers are also subject to local law enforcement and state DMV rules.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

California Industrial Hemp Program, FAQ, California Department of Food and Agriculture

The banking bill, also known as H.R. 1595, passed 321-103 in the House with wide bipartisan support, with 91 of those who voted for it being Republican. It’s unclear whether it will face much fierce opposition in the Senate or what the president’s position would be if it lands on his desk. There are Senate committee chair Republicans who are in support of cannabis banking reform measures, though none have specifically mentioned hemp.

If passed, the measure would direct U.S. banking regulators to draft guidelines to federally-backed financial institutions affirming the legality of both hemp and CBD products extracted from it – within 90 days of the law’s passage. The federal regulatory directive would outline best practices for banks on how to follow the law in offering financial services to any hemp-related business (which can include contractors, landlords, plumbers, etc.).

In the last year since hemp and CBD were legalized, farmers, businesses, processors, retailers and even labs have reported trouble obtaining banking services. Many have had to rely on cash-based transactions, which has proven difficult – and has even stunted their growth in terms of electronic sales.

Will SAFE Banking Law Resolve Pot Payment Problems?

Although many political analysts say the bill’s future is uncertain, one thing most agree on is that the law itself may not entirely resolve the cannabis industry’s payment and financial services woes. For one thing, it deals solely with non-psychoactive hemp and the cannabidiol oil that is often extracted from it, containing only trace amounts of THC.

Hemp and CBD oil can be ingested in various forms, but both are very versatile. Although CBD oil in particular has been touted for its health effects, neither will get a person high.

Marijuana, which is also derived from cannabis, does contain THC and is designated a Schedule I narcotic by the federal government, absurdly placing it in the most dangerous class of drugs with high addiction risk and no medicinal value. This is true no matter the marijuana law in the state you live. This more than anything is what has kept banks from entering the industry fray, as they would risk money laundering charges (by taking and “cleaning” the “dirty money”).

As Los Angeles marijuana banking lawyers can explain, the lack of clarity from the federal government, states where marijuana is legal have had to legislate their own protections for credit unions and banks, folding them into state banking law.

The SAFE Banking Act is a good step in the right direction – one that the 60 percent of U.S. voters who support marijuana legalization deserve to see. Innovations for cannabis payment would allow for better tax collection and economic benefits – locally for now and possibly far beyond if interstate sales are ever possible.

The ultimate goal is to lay the foundation of clear financial and banking standards in the industry so that consumers are protected and cannabis businesses can operate without hesitation in the bounds of state law.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Hemp banking protections pass US House as part of landmark cannabis bill, Sept. 25, 2019, By Jeff Smith, Hemp Industry Daily