A dark cloud looms over hemp businesses across the U.S. Whether 100-acre farms or micro wellness operations, Representative Miller’s proposed amendment to the Farm Bill gravely threatens the future of this young, high-growth industry.
It’s early days for the bill, and plenty of commentators point to ample time for the language to be softened. Yet, its initially drastic nature leaves no room for complacency.
This article offers an impact snapshot — a look at how the amendment’s current form would wreak havoc for American producers, consumers, and business owners.
The impact of the Miller amendment on CBD businesses
Savanh Wellness is an Asian-inspired hemp wellness brand. The company educates the AAPI community on plant medicine and provides alternative options for healing and wellness. Its product line contains various cannabinoids, CBD, CBN, CBG, and D9-THC, and is organic, vegan, and gluten-free.
Despite the company producing only natural products — no synthetics — the Miller amendment’s current wording would wipe out five of Savanh Wellness’ SKUs and prevent the business from selling its products in multiple states.
“My hemp-derived D9 products would be impacted. The brands that I provide formulations and white-label services for — their hemp-derived D9 products would also be prohibited. This would cause us to lose at least 70% of the revenue that we generate from this category,” explained Sysamone Phaphon, the brand’s founder.
For Cornbread Hemp, a Kentucky company, the amendment would wipe out all of its current, successful product lines. The company makes USDA organic full-spectrum CBD products containing small levels of THC at current legal limits. Over 50 people are employed across a vertically integrated operation, from farm management to extraction and production, marketing and sales, operations, and fulfillment.
“Every product made by Cornbread Hemp would be negatively affected by the Miller Amendment. It could potentially re-criminalize our entire product line,” said Jim Higdon, the company’s co-founder.
The impact on consumer choice and wellness
This reduction in product offerings will directly lead to worse outcomes for those using CBD for health and wellness purposes.
“If the amendment passes in its current form, then the only legal products would be CBD isolates. Unfortunately, they are just not that popular,” Jonathon Miller, General Counsel of the Hemp Round Table, explained.
“There is a market; there are some people who do like those products, but it’s a small minority. Most people get the best benefits of CBD when it is combined with THC, even at non-intoxicating levels.”
Full-spectrum products are CBD-rich. Yet, they also contain various levels of other cannabinoids (including non-intoxicating levels of THC), as well as naturally occurring terpenes and flavonoids. These products are consistently associated with the best outcomes for consumers, a result of the Ethan Russo-coined “Entourage Effect.”
This empirically informed hypothesis points to a key finding: that various components found in hemp are complementary and act synergistically when consumed together. Essentially, the benefits of CBD are multiplied when it’s combined with other cannabinoids. For optimal effects, THC is part of this package (in non-intoxicating quantities).
“(Miller would) force us to remove THC from products, which would make them less effective for our customers,” said Higden.
Broad-spectrum CBD is also considered more effective than isolates. This form of cannabidiol is also on Miller’s chopping block. It contains several complimentary plant compounds but is stripped of THC, with all but traces remaining. Consequently, the amendment’s current wording — which bans all ingestible hemp products containing any level of delta-9, including trace amounts — would recriminalize this entire product class.
“If more people engaged with their consumers in user feedback sessions, they would realize that many consumers need and require higher dosages to support their wellness and the ailments they consume it for,” explained Phaphon.
“I agree with regulating a legal market to stop bad operators from producing synthetically harmful products. However, Miller’s language in the amendment would also prevent the good operators who produce natural and organically hemp-derived THC products that are utilized for healing many adults.”
Impact on grain and fiber
It’s not just the CBD industry braced for impact. Uncertainty and apprehension are similarly pervasive in the agricultural hemp sector.
“The language at present is a challenge because it’s not clearly defined. It seems to be geared towards negatively impacting and stifling the cannabinoid space. Yet it also doesn’t call out the provisions that would guarantee protection for grain and fibre,” said Andrew Bish, COO of Bish Enterprises and founder of Hemp Harvest Works.
“Based on how things have been interpreted with this crop in the past, we would presume that the amendment would be detrimental to the growth of that sector.”
Many commentators point to the huge burden the amendment would place on farmers who have already collectively invested so much into innovation and seed development. For Bish, the reality is bleak.
“The idea that the agricultural industry would start working on genetics to reduce the content of THC or CBD to become compliant — I’m highly sceptical that anyone would have the appetite for that,” he explained.
“I think most companies would look at that and say we’re out, we’re done, there’s no more investment we’re going to put into this; it’s obvious that the government is trying to stifle this to the degree that it’s not worth running up this hill.
“I can’t think of a single company that could afford to go down that road and try to modify this plant to the degree that would be necessary to both have varieties that meet the marketplace’s expectations and simultaneously lack any of the cannabinoids that the plant is known for. To be honest, I’m skeptical that it is even possible.”
Impacts on interstate and international commerce
Already, the complexity associated with domestic trading creates a restrictive environment for brands and producers. Many states have individual hemp programs with differing market access, designs, and limitations. Should the amendment pass in its current form, domestic sales across state lines would be further curtailed.
“The Miller amendment also negatively impacts interstate commerce. The new definitions could potentially limit the sale or shipment of some products to certain states and force other operators in strict states to shut down their operations fully,” said Phaphon.
Of course, the implications for trade extend internationally, too. Many businesses embroiled in the arduous process of exporting hemp products are caught in a particularly frustrating limbo.
Consider companies that are planning to expand into the Latin American market. To export, all businesses must first send product samples to be registered in the relevant country. The entire process takes a significant amount of time, effort, and money. Both US and foreign counsel must be retained. Then, there are further registration processes and hurdles, all with associated fees.
If hemp-derived products are at risk of being outlawed, this entire process represents a waste of valuable resources. Businesses will not register products that risk becoming unviable or unlawful in the future.
Ultimately, regulatory uncertainty leads to paralysis. As the industry awaits clarity, progress eludes us. Why engage in efforts to advance your business if an entire product line is threatened with criminalization under the guise of consumer safety? To do so would constitute recklessness and improvidence. It is clear that rather than encouraging innovation, in the US in 2024, we are stripping entrepreneurs of agency and opportunity.
A lose/lose situation with global ramifications
The amendment’s rigid language forces businesses to either close shop or invest huge, potentially futile sums in reformulating entire product lines — to the detriment of themselves and consumers.
As a world leader in these industries, America must create better opportunities and outcomes for businesses and consumers.
When we instigate or propose a rule or regulation, other countries frequently follow suit, often at a far greater pace. Take when the U.S. attempted to outlaw vape pens, and several Latin American countries followed suit. Eventually, the proposal was defeated domestically, but the damage was done elsewhere.
We must lead by example and pave the way for progress, not pander to prohibitionists or their bedfellows, at home or abroad. The world is watching.
