Cannabis businesses are not immune to the harsh realities of any other business. In fact, they likely deal with even more difficult challenges than many other traditional businesses in a variety of respects. For example, most businesses—if not all—should have some form of insurance and, without insurance, a businesses’ only remedy may be to resort to and/or be subject to the court system. Unfortunately for cannabis businesses, federally subsidized crop insurance is simply unavailable at this time, even for industrial hemp.
Although the Agriculture Improvement Act of 2018, signed into law on December 20, 2018 (the “2018 Farm Bill”), declassified industrial hemp (and its derivatives containing less than 0.3% THC) as a Schedule 1 controlled substance under the federal Controlled Substances Act, the 2018 Farm Bill provided no mechanism for obtaining crop insurance for industrial hemp. To this day, hemp farmers are still unable to obtain federal crop insurance for their product. In light of this problem, Congress recently began the process to extend crop insurance protections through the recently signed 2019 Disaster Aid Bill. As part of that legislation, hemp cultivators should be able to obtain federal crop insurance beginning in 2020.
Hemp is seen as a new opportunity for farmers and business who are interested in diversifying their crops or seeking new or more profitable endeavors. The cultivation of hemp will create more jobs in the farming industry, and the production of hemp products, including products from hemp derivatives such as CBD, is anticipated to be in high demand. The entire hemp and CBD industry, however, hinges on the success of the hemp farmers.
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