The Ohio General Assembly passed Senate Bill 57 (“SB 57”) last week, decriminalizing hemp and instituting a legal framework for hemp licensing and cultivation. SB 57 also allows retailers to sell hemp-derived products such as cannabidiol (“CBD”) and removes CBD from the state’s controlled substance list. SB 57 is currently pending before Governor Mike DeWine and will go into effect immediately upon signing.
Under the Bill, the Director of the Ohio Department of Agriculture is empowered to establish a program to monitor and regulate hemp cultivation and processing. Once the bill is signed into law, the Director is also instructed to issue regulations outlining licensing requirements. Farmers hoping to obtain a license for hemp cultivation or processing will be required to comply with these rules to proceed through the application process. Successful licensees will be permitted to produce hemp and CBD products defined as containing less than .3% THC, the compound most typically associated with the psychoactive effects of marijuana.
The Bill follows on the heels of the federal government’s 2018 Farm Bill, which opened the door to state regulation of hemp and CBD. After passage of the Farm Bill, hemp was removed from its Schedule 1 status under the Controlled Substances Act. The Farm Bill additionally provided states with the prerogative to develop regulatory systems for the production of hemp and CBD products as long as they are produced by licensed cultivators, pursuant to applicable state regulations, and in accordance with a plan approved by the federal government.
Once SB 57 is officially signed into law, potential licensees and prospective retailers hoping to offer CBD and hemp-derived products can expect a slew of new regulations outlining their obligations. Given the previously illegal status of these products, licensees and retailers are likely to face a high-level of regulatory scrutiny by the state, as well as potential enforcement actions for any infractions. Those seeking to cultivate, process, or sell CBD or hemp-derived products should consult with experienced counsel to ensure they are complying with applicable state and federal law.