Thursday, December 20th will go down in history as a landmark day for the hemp industry. Five decades of hemp prohibition ended when the 2018 Farm Bill was signed into law by President Trump. The new law officially removes hemp and its extracts from the federal list of controlled substances and legalizes hemp production in all 50 states.
This is obviously a huge win for hemp farmers, hemp businesses and the U.S. cannabis industry as a whole. It’s expected to drive a sharp increase in today’s $800 million U.S. hemp market up to as much as $20 billion by 2022 according to some estimates. And it’s viewed by many as being a stepping stone on the path to the federal legalization of marijuana.
But what does the legalization of hemp mean for users of CBD oil products? In many ways, it changes everything…and it’s all good news for consumers.
1. Legal Clarity
Hemp-derived CBD oil products have been available for purchase online and in some local stores for a few years. But there was always a cloud of legal uncertainty hanging over the industry. Some consumers worried about possible arrest for possession of CBD products. And some people who wanted to try CBD oil didn’t take the leap because of the lack of legal clarity.
The lifting of the federal ban on hemp will allow states to regulate hemp-based CBD oil products similar to alcohol. It’s expected that the states previously restricting CBD sales will fall in line with the new federal law, as Alabama did last Wednesday. There should soon be no doubt that hemp-derived CBD oil products are legal in all 50 states.
2. Lower Prices
Domestic hemp production will increase substantially. With legality no longer in question, more companies will enter the business of growing and making CBD oil products. Over time, the increase in supply and competition will result in lower prices for consumers. This is certainly good news for all consumers and especially those who have struggled to afford these products in the past.
Current users should not expect prices of their favorite CBD brands to drop overnight. It will likely take several months for the new landscape to take shape. But ultimately, the basic principles of economics dictate that the prices of CBD oil products will decline.
3. Better Local Availability
Historically, finding CBD oil products locally has often been a challenge for users. Although the majority of consumers will likely continue to purchase their CBD oil products online, many would appreciate the opportunity to purchase them in local stores. Legalization opens the door for major retailers such as Walmart, Target and Walgreens to start carrying CBD oil products.
4. Easier Online Buying
The online buying experience will improve. Most CBD companies selling online have had to use foreign payment processors because U.S. banks didn’t allow CBD transactions. As a result, consumers routinely had to deal with credit card denials and foreign transaction fees. Legalization will allow CBD companies to get domestic payment processing solutions that will eliminate those pain points for consumers.
5. Product Innovation
It was reported in September that Coca-Cola was “considering its options for producing drinks infused with CBD.” This is likely just the tip of the iceberg. Get ready for a wave of new CBD-infused products in the food, beverage and skin care industries just to name a few.
6. More Research Studies
The uncertain legal status of hemp in the past made it difficult for researchers to get funding for studies of CBD and its potential health benefits. Legalization should drive an increase in research studies that can more definitively determine its efficacy for health and wellness.
Summary of the Impact of CBD Hemp Legalization on CBD Users
Passage of the 2018 Farm Bill removes hemp from the federal controlled substances list and is great news for users of hemp-derived CBD oil products. Users will have easier accessibility to CBD oil products and prices should decline over time. Consumer interest in CBD products should continue to grow exponentially as new companies enter the market offering innovative products. And new research into CBD should also drive product innovation and give more legitimacy to the potential benefits of CBD oil products.
Hemp legalization has officially arrived…it will certainly be an interesting ride from here.