Texas Legalizes Hemp and CBD Production

legalized cannabinoid

Another U.S. state has legalized CBD and hemp production recently much to the enthusiasm of investors and analysts.

Governor of Texas Greg Abbott signed a new law late on Monday which legalized cannabinoid (CBD) production in the state while allowing local farmers to grow hemp as an agricultural crop at the same time.

Receiving bipartisan support from both parties in the state legislature, the new law was well received by both cannabis enthusiasts and farmers alike and is effective immediately. However, there is still likely to be a delay until farmers begin growing fields of hemp across the state mainly due to regulatory concerns.

While the U.S. Farm Act that went into effect earlier this year, removing hemp from the list of controlled substances, Texas was one of the only states that hadn’t already opted into industrial hemp production as opposed to 42 other states that already did.

“I am excited that we have taken one more step towards giving producers in Texas the opportunity to grow hemp,” Agriculture Commissioner Sid Miller said in a statement. “Texas will be a leader in hemp production, and we will be submitting our plan and writing rules to follow the 2018 Farm Bill and the law recently enacted in Texas. This will be another tool for farmers that are looking to diversify their farming operations.”

Before this piece of legislation, Texas treated both marijuana and hemp in the same manner, broadly outlawing them in the state. While both plants technically come from the same plant family, hemp stands out for containing only low levels of THC, the compound in marijuana that makes consumers high.

Instead, hemp farming has been seen by cannabis businesses as an alternative source of another vital compound, CBD, which is a crucial ingredient in various edibles and health products.

Although the U.S. Farm Act saw hemp production legalized on a federal level, the U.S. Department of Agriculture and the Food and Drug Administration haven’t issued their own guidelines for states growing hemp.

As such, it will still be some time before farmers begin growing fields of hemp in Texas, as the state will still need to issue their own guidelines since the federal government has none of its own to recommend.

Cannabis laws as a whole was a big issue during the state’s 2019 legislative session that concluded in May. Although a bill that would decriminalize possession of small quantities of weed failed to pass, lawmakers ended up approving an effort to increase access to medical cannabis and who can use it under the Compassionate Use Act.

Those bills are still waiting for the governor’s signature or veto, a decision that he has until June 16th to make.

Overall, the announcement was a major step forward for the cannabis industry as a whole, as Texas was seen as one of the main bastions of resistance against marijuana usage. Other states are expected to propose similar legalizations in the future as this trend continues to take shape.

Cannabis stocks overall didn’t react much to the news, however, with most major companies ending up falling in Tuesday’s trading session.