People often define the entire cannabis industry as a “gray area,” where wild-west cultivation and distribution is tempered with state and local regulation, even as the federal government looms with the heavy hammer of the Controlled Substances Act.

This is equally true for hemp and CBD

Federally speaking, hemp and CBD are still illegal under the Controlled Substances Act.  Hemp can be grown in states where a pilot research program has been formed, but the federal government still does not sanction any commercial, consumer market.  For all practical purposes, if you’re growing hemp as a business, you’re doing so without permission from the feds.

That said, new Oregon state regulations serve as insulation from the risk of federal intervention.  In other words, if you’re looking to get into the hemp industry, the OLCC’s guidelines should be seen as a warm blanket that could be the difference between the DEA closing down your “rogue” hemp farm, or the other rogue hemp farm in Indiana.

As of December 28, 2017, the OLCC has, for the first time, defined industrial hemp and industrial hemp products under Oregon Administrative Rules (OAR) concerning recreational marijuana under Division 25.

Industrial hemp “[m]eans all non-seed parts and varieties of the Cannabis plant, whether growing or not, that contain an average tetrahydrocannabinol concentration that does not exceed 0.3 percent on a dry weight basis.”

Cannabidiol, commonly known as “CBD”, is also defined as an “industrial hemp commodity or product,” and it falls under all guidelines for industrial hemp.

Under the new rules, industrial hemp growers and handlers certified by the Oregon Department of Agriculture (ODA) may sell their product to OLCC processors with industrial hemp endorsements.  Industrial hemp endorsements are new as well (the previous endorsements for OLCC processors specifically included only extracts, concentrates, edibles and topicals).

The Industrial hemp handler and grower permits from ODA are a piece of cake to obtain, as compared to OLCC licenses.  You need only pay a $1300 fee and complete a 3-page application. You also need local land-use approval, but unlike with marijuana, every EFU-zoned parcel in the state is eligible for a hemp farm. Hemp is considered a farm use and is allowed outright in Oregon (with proper zoning).

When crossing over to the OLCC system, there is a $500 annual fee for industrial hemp handlers and growers (on top of the ODA fee), and the industrial hemp or CBD cannot go straight to a dispensary; it must pass through a hemp-endorsed OLCC processor.  However, if a dispensary has hemp or CBD inventory received prior to December 28, 2017 from another source apart from an OLCC-licensed processor, it may be sold not later than April 1, 2018.

Finally, as of 2018, all industrial hemp products entering the OLCC system must be tracked through the Cannabis Tracking System. Don’t forget to record your THC potency test results in METRC, too.  While the ODA requires that all industrial hemp products test below 0.3% THC, the threshold for OLCC processors is, oddly, 5%:

“A processor with an industrial hemp endorsement may not receive, manufacture or distribute industrial hemp concentrates or extracts that exceed five percent THC.

While the $500 fee, testing requirements, METRC-tracking, and other regulations may seem to be drafted merely to make industrial hemp harder to move than it otherwise would have been, think of the new regulations as insurance;federal enforcement resources are limited, and chances are those hemp or CBD traffickers acting within the state’s legal framework will be the last on the federal chopping block.