Member Article

Legislation Aligns State and Federal Laws

On July 17, 2019, Ohio lawmakers passed Senate Bill (S.B.) No. 57, which decriminalizes hemp and creates licensure programs for those wanting to cultivate or process hemp and hemp byproducts.  Ohio was one of the few states that did not update its statutes to align with federal regulations following the passage of the 2018 Farm Bill, which removed hemp as a controlled substance at the federal level.  Until the passage of this bill, hemp and marijuana were still classified together under Ohio law, and hemp was considered a controlled substance.[i]  S.B. No. 57 excludes hemp and hemp products from the definition of marijuana used to enforce laws governing controlled substances.

Hemp and marijuana both come from the cannabis plant, but hemp has a lower concentration of delta-9 tetrahydrocannabinol (THC), the psychoactive part of cannabis.  Hemp and hemp products can be used for textiles, paper, animal feed, biofuel, and other industrial applications.  Per the new legislation, hemp is defined as:

“The plant Cannabis sativa l. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomer, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis.”[ii]

Overall, the bill was widely supported, particularly by those already in the hemp industry, the agriculture industry, and academic institutions seeking to cultivate and study hemp.  Now that Ohio law and federal law align, the hemp industry will become much more accessible to Ohioans and open the door to cannabidiol (CBD) products made from hemp.[iii]

The new legislation will prevent the State of Ohio Board of Pharmacy from listing hemp as a controlled substance, establish a Hemp Marketing Program to improve and expand the market for hemp products, and outline license requirements.  Specifically, the bill establishes a program to monitor and regulate the hemp industry, which includes issuing hemp cultivation licenses and hemp processing licenses.  The program will be run by the director of the Ohio Department of Agriculture (ODA).  With limited exceptions, anyone wanting to cultivate or process hemp must receive a license from the director of ODA.  The licenses will be valid for three years unless suspended or revoked.  Applicants must comply with criminal background check requirements as a prerequisite for obtaining a license, and the director must deny licensure for failure to complete the background check requirements.

Cultivating or processing hemp without the required license can result in a criminal penalty.  The penalty is dependent on the culpability of the offender.  Licenses will not be issued to any individual who has plead guilty or been convicted of a felony related to controlled substances in the 10 years prior to the submission of an application. 

The director of ODA will also be required to set reasonable application fees and other necessary annual fees for license holders.  The director will also create a process for inspection of hemp facilities and testing of products for compliance with the relevant statutes.  Additional regulations will be promulgated explaining the proper disposal process for products violating program requirement and limiting the transport of hemp and hemp products.  There will also be a “setback distance” requirement that hemp cultivation license holders locate their hemp plants a certain distance from locations where medical marijuana is cultivated.

While license holders will be regulated, the bill allows ODA and universities to cultivate and process hemp without a license for research purposes.  No license is required to possess, buy, or sell hemp products.  Hemp and hemp products seized prior to the bill’s effective date will be released as long as the person can demonstrate the product complies with federal law or will pay for testing to prove the THC concentration is less than 0.3%.

ODA, with assistance from the Ohio attorney general and the governor, will have 180 days from the passage of the bill to create and submit a regulation plan to the secretary of the United States Department of Agriculture for approval.  Given the desire to achieve conformity with federal regulations and to promote and advance the hemp industry, the bill will go into immediate effect once signed by Gov. DeWine.  For more information on hemp compliance, please contact you Dinsmore health care attorney.

[i] Ohio Legislative Service Commission, Bill Analysis, https://www.legislature.ohio.gov/download?key=11496&format=pdf.

[ii] Id. at 3-4.

[iii] Jeremy Nobile, SB 57 may clear the air on selling CBD products, Crain’s Cleveland Business (June 8, 2019), https://www.crainscleveland.com/small-business/sb-57-may-clear-air-selling-cbd-products.