On a historic day of cannabis business, President Trump signed a bill making cannabis federal legal.
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President Donald Trump signed the cannabis law on Thursday, a change expected to unleash market seismic changes for the entire cannabis industry.
Trump's signature in the 2018 Cannabis Farm Bill – known as hemp less than 0.3% of the THC – is taken from the Controlled Substances Act.
The change also applies to extracts of cannabis, including the Convention on Biological Diversity.
The law applies immediately, meaning federal drug authorities must treat cannabis like any other agricultural commodity, such as wheat or potatoes.
Cannabis farmers will not face any of the trade and regulatory barriers that apply to the higher THC species, which are still known as marijuana and remain a drug from Table 1.
Related: Congressional rulers closer to legalization of cannabis
Here's what you need to know about the new law:
- Cannabis plants account for over 0.3% of the drugs listed in Table 1, although licensed cannabis producers can not be charged with a crime if cannabis exceeds the THC limit, making it marijuana.
- But the THC that comes from cannabis is no longer a controlled substance.
- The US Department of Agriculture (USDA) should develop national cannabis regulations "as quickly as practicable", an uncertain time frame. The national plan should include procedures for verifying the content of THC in cannabis plants and plans to destroy plants containing too much THC.
- The Food and Drug Administration (FDA) retains control over food, medicine and cosmetics. This means that, while the Convention on Biological Diversity becomes legal on 1 January, it does not mean that it is legal to add cannabis or the Convention on Biological Diversity to food products or supplements.
- Indian states, territories and tribes have no deadline for submission of cannabis management plans to the US Department of Agriculture. However, once they submit the proposal, the US Department of Agriculture has 60 days to approve or reject.
- If the state hemp control plan is rejected, the farmers will be "subject to a USDA plan to monitor and regulate this production."
- The US Department of Agriculture has one year to study the progress of the 42 states in cannabis plant with the plant and "determine the economic feasibility of domestic production and the sale of industrial cannabis", with the results due to Congress.
The cannabis industry has been pressing for legalization of contracts, but its long association with high-grade tachydrocannabinol compounds has made it trapped along with heroin and marijuana in Table 1, the most restrictive drug classification in the United States.
The Farm Bill does not give any direction on how law enforcement will determine whether THC has come from legal cannabis or illegal marijuana.
Marijuana entrepreneurs are cheering for change, because it may open a channel to access public markets and other financial instruments that are not available to companies that sell drugs listed in Table 1.
Vertical, a cannabis producer and retailer based in Agora Hills, California, operates operations in four states and plans to separate a separate cannabis company called Vertical Wellness, hoping to list them on Nasdaq.
Related: big cannabis opportunity coming? Mills for manufacturing industrial hemp.