banking is not possible for the cannabis industry. Yet conference delegates are already preparing for the day when the product becomes “commoditized” and is treated and listed like corn, wheat, or soybeans. The U.S. Wheat Associates recognizes six classes of wheat from Durham to Hard Red Winter. There are also six corn varieties and over 2,500 types of soybeans! In cannabis, cultivars are categorized as hemp, indica, or sativa. Each has its own unique cannabinoid complexities, terpenes (essential oils), and medicinal value. Questions about whether standardization of products can be agreed on, given the known number of cannabis strains, were answered with suggestions that point to a commodity contract with a defined amount of THC or a set THC:CBD ratio in the product. However – confirming what I’ve already seen happen on trading floors – the road to a traded cannabis product begins with... in 1933, the bill has been tweaked about every five years. Usually the modifications involve renewing agricultural subsidies, funding rural development, controlling energy costs, or promoting land conservation. The Farm Bill of 2018 was a seismic moment in the cannabis industry because the most interesting changes in the farm bill had to do with industrial hemp, aka cannabis. The pro-business, pro-farmer voices were heard loud and clear in Kentucky, with HEMP Ever since FDR signed the first farm bill back
Mitch McConnell lending his support. A not unexpected outcome was how much more attention cannabis gained as a discussion point considering it as a derivative or an asset class. But first, let’s start with a definition. Hemp is cannabis. Period. But what needs to be factored in is that industrial hemp must not contain more than 0.3% of THC. So try as you might, hemp will not get you high, let alone produce euphoria. And for years, law enforcement did not differentiate between the various “versions” of cannabis. Moreover, thanks to the 1970 Controlled Substances Act (“CSA”), cannabis of any kind was prohibited. The CSA Schedule 1 deems cannabis to have “no medical value.” Oddly enough, you will find fentanyl on the less strictly prohibited Schedule 2 of the CSA. Medicinal value? Yes... when tranquilizing elephants. So what does this newly reconfigured hemp policy look like, and what did it change specifically? According to the Brookings Institution, the 2018 Farm Bill “allows hemp cultivation broadly, not simply pilot programs for studying market interest in hemp-derived products. It explicitly allows the transfer of hemp-derived products across state lines for commercial or other purposes. It also puts no restrictions on the sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law.” What remains to be seen, however, is how the farm bill will allocate spending – if any – on hemp crop promotion. In 2014, the farm bill authorized spending of $489 billion, but less than 1% of that actually went to farmers.
The Farm Bill of
2018 was a seismic moment in the cannabis
industry because the most
interesting changes in the farm bill had to do with industrial hemp.
American Consequences 65
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