An entire industry has been in panic mode because the newly passed spending bill includes a ban on most hemp derived THC products. The ban, which takes effect in a year, would essentially end a $28 billion market and put more than 300,000 jobs at risk. The ban would overwhelmingly impact states without legal recreational cannabis, like Kentucky, Utah, and Texas. States without recreational markets have seen the hemp- derived THC market proliferate as demand for intoxicating products continues to increase after the passage of the 2018 Farm Bill (We’ll get to this in a moment.) There’s been a lot of confusion about the implications of the hemp ban tucked in the spending bill. Will dispensaries go away? Can patients still get their medicine? Can people no longer buy sketchy looking weed products at gas stations and head shops?Let’s clear some things up. The Hemp Loophole Trump signed the Farm Bill into law at the end of 2018. Tucked in between provisions for dairy producers, rural development, and other agricultural-related business was a section about hemp. Without boring you with all the little details, here’s what you need to know: the bill reclassified hemp from a controlled substance to an agricultural commodity. Any cannabis plant with less than 0.3% THC became legal to produce and sell under federal law. At first, the Farm Bill’s passage ushered in the next wave of the CBD product craze. Remember those days, when CBD was in everything from toothpaste to pillows? While much of the gimmicky side of CBD marketing has toned down in recent years, the non-intoxicating cannabinoid remains popular today. But within a few years of the Farm Bill’s passage, some people started getting crafty with hemp. Turns out, you can synthesize CBD into delta-8 THC. For context, the “regular” THC stoners have loved for ages is delta-9 THC. Delta-8 THC is chemically similar to delta-9 THC and occurs naturally in small amounts in cannabis. It can create a similar high to delta-9 THC, albeit a bit less potent. Thus began the delta-8 THC boom. Suddenly, intoxicating THC products could be sold commercially without any sort of cannabis license. Because technically, it’s not cannabis. It’s hemp. Wink wink. Similarly, THCa products have exploded in recent years. THCa (tetrahydrocannabinolic acid) is a naturally occurring chemical in the cannabis plant. It’s the precursor to THC. On its own, THCa can’t get you high. But when heated up, it converts to THC. Then bam, you can get high. Crafty producers began to sell hemp-derived THCa products with less than 0.3% THC, but much higher levels of THCa. Remember, when you heat up THCa (like with say, a lighter), it becomes THC. And that’s how intoxicating hemp products rapidly became federally legal across the country. It’s only fitting that the man who signed this bill into law, creating a multi billion dollar industry and hundreds of thousands of jobs, would now reverse it all seven years later. But that reversal doesn’t necessarily come as a shock to anyone who has been paying attention to this legal-ish market. “I think that most operators in the hemp space saw the 2018 Farm Bill loophole as more of an interim situation, with the understanding that it would inevitably come to an end, and when it did, it would have a significant and detrimental impact on the hemp sector,” Rob DiPisa, Chair of the Cannabis Law Group at Cole Schotz, told VICE. “Many smaller hemp operators did not commit to real estate, long-term contracts, or other fixed obligations for this very reason.”Recreational Weed Is Not AffectedCourtesy NickyPe from pixabayTrump inadvertently created a pathway for an entire market of unregulated, federally legal, intoxicating hemp products back in 2018. Now, he’s reversing course. But those in states with recreational weed need not fear. This isn’t about the products in your local dispensary, which are still federally illegal. Complicated, much?Cannabis Is Still Illegal on a Federal LevelAs a quick clarification, hemp and cannabis are the same species of plant. It’s just the THC content that legally separates the two. Hemp is an agricultural commodity, whereas cannabis is a Schedule 1 controlled substance. Let’s back it up a little. Back in 2012, voters in Colorado and Washington approved the first-ever measures to legalize recreational cannabis. This kicked off what is now a projected $45 billion industry, with nearly half of the country implementing recreational cannabis laws in the following decade. But these are state laws. Cannabis is still federally illegal. It’s why you can’t (well, probably shouldn’t) cross state lines with cannabis, even if you’re going from one legal state to the next. Federal Red Tape Courtesy Victorburnside from Getty ImagesIt’s also why the legal cannabis industry still doesn’t have interstate commerce. Many industry players had high hopes about both Biden and Trump teasing the idea of rescheduling cannabis from a Schedule I to a Schedule III drug, as this would ease some of the red tape. But that still would not have made it legal for the plant to travel across state lines. Instead, all states with legal cannabis must grow, process, and sell cannabis within their borders. This greatly limits the ability to scale and makes it difficult to attract investors, among a long list of other downsides, like banking. Although it’s slowly becoming easier for cannabis operators to find banking options, it’s still a major pain point for many. Banks are generally hesitant to work with cannabis businesses because the risk is so high. After all, to provide banking to a state-legal cannabis business is to provide banking to a federally illegal cannabis business. That’s a big risk. Legal cannabis operators are also barred from writing off business expenses for taxes. That’s because IRS Section 280E prohibits anyone conducting business with Schedule 1 controlled substances from writing off ordinary expenses. So cannabis businesses operating legally within their state’s frameworks can’t easily scale, nor can they easily attract investors because of the perceived high risk of dealing with a federally illegal substance. They also can’t easily secure banking or write off their business expenses during tax season. Yikes. It sounds fun to run a legal cannabis business. It’s no surprise that the 2018 Farm Bill eventually transformed into a pathway for people to start questionably legal hemp operations. After all, businesses producing hemp-derived intoxicating THC products aren’t subject to all of the red tape involved with state-regulated cannabis markets. They’re, wink wink, producing an agricultural commodity. This has created a lot of controversy and infighting among the hemp vs. cannabis crowd. “These states have imposed relentless costs and regulations on their state-licensed operators, holding them to the strictest of standards. Meanwhile, those in the hemp space were permitted to sidestep these regulatory hurdles under the 2018 Farm Bill and produce intoxicating hemp products that could both move freely across state lines and compete with the heavily regulated products being produced by licensed in-state operators,” said DiPisa. We still have a year before the impending hemp ban. We can expect plenty of pushback and controversy to ensue as the day gets closer. We’ll be keeping a close eye on the next developments. In the meantime, if you’re someone who relies on THCa and other hemp-derived products, it may be a good time to stock up.(opens in a new window)MoodOreoz THCa Flower(opens in a new window)Available at MoodBuy Now(opens in a new window)(opens in a new window)Secret NatureDisposable THCa Vape(opens in a new window)Available at Secret NatureBuy Now(opens in a new window)(opens in a new window)MoodWonder Bread THCa Prerolls(opens in a new window)Available at MoodBuy Now(opens in a new window)(opens in a new window)WynkWynk THC Seltzers(opens in a new window)Available at WynkBuy Now(opens in a new window)(opens in a new window)Tre HousePeach Pear Delta 9 THC Gummies(opens in a new window)Available at TRĒ HouseBuy Now(opens in a new window)The post How the Feds Kinda Made Weed Legal, But Still Complicated as Hell appeared first on VICE.