Forefront Communications

Wall Street Journal: Hemp Suppliers at Odds With Hazy Regulations

Forefront Communications

Forefront Communications

RJ Hoop, a director at client PanXchange, comments on the regulatory state of the hemp industry.

Farmers cheered when hemp was legalized nationally for the first time in decades. But more than a year later, differing state regulations and law enforcement’s unfamiliarity with the plant are complicating efforts to capitalize on the crop.

Cultivation of the plant—used to make industrial fiber and the alternative health remedy and food additive cannabidiol, or CBD—has expanded in recent years and was permitted across the U.S. as part of the 2018 Farm Bill. The U.S. Department of Agriculture in October then set out rules for the licensing and monitoring of hemp.

However, while those changes expanded farmers’ access to a potentially lucrative cash crop, they didn’t address how to move hemp in states that still treat the plant as an illegal variant of cannabis. That is proving an obstacle for businesses attempting to embrace hemp’s newfound legality to expand nationwide.

The uncertainty is the latest example of hazy regulations around the fast-growing market. Food makers have recently slowed development of new products containing CBD after the Food and Drug Administration signaled there wasn’t enough evidence to ensure it was safe to consume.

“There’s a bunch of kinks that need to be worked out,” said RJ Hoop, a director at PanXchange, a platform for trading hemp and other commodities.

Denis Palamarchuk was driving a truck loaded with 6,700 pounds of hemp from Oregon to Colorado last year when he was stopped for a routine inspection outside of Boise, according to Idaho State Police. Despite paperwork verifying the load was hemp, Mr. Palamarchuk was charged with trafficking marijuana, a crime that carries a prison sentence of up to five years.

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