What the New Federal Farm Bill Could Mean for Your Cannabis Business


As a cannabis operator, you’re no stranger to fluctuating regulations, shifting trends and an evolving marketplace. This constantly changing landscape has been part and parcel of the industry’s relatively short-but-exciting history, and it’s one of the major reasons cannabis business professionals like you have sought out technology—like cannabis business software—to help manage growing and complex business needs.

Cannabis business software (specifically, cannabis Enterprise Resource Planning or ERP) integrates every department within a cannabis company, centralizing the company’s data into a single database. Utilizing one solution provides full visibility into finance, seed-to-sale, compliance, quality and traceability processes and allows team members to access information from a single, real-time source of truth. The result? Deep insights and immense flexibility, enabling cannabis companies to pivot operations in response to evolving market requirements and governmental regulations.

One example of evolving government regulations is the Federal Farm Bill. Today, we’ll look at the 2018 Farm Bill, how it may be revamped this year and what it means for your cannabis business.

What is the 2018 Farm Bill?

The farm bill is legislation that was first enacted in the 1930s in response to the Great Depression and the Dust Bowl. The original goals of the bill were to provide “fair” food prices for farmers and consumers, safeguard the food supply and protect natural resources. Every five years, the current bill expires, requiring Congress to review, debate and pass a new one that is then signed into law by the President.

President Donald Trump signed the 2018 Farm Bill into law December 20, 2018. According to Farmers.gov, the bill “provides support, certainty, and stability to our nation’s farmers, ranchers, and forest managers by enhancing farm support programs, improving crop insurance, maintaining disaster programs, and promoting and supporting voluntary conservation.”

For the cannabis industry, the bill was a significant piece of legislation. Hemp—a plant within the same species as cannabis and containing less than 0.3% of delta-9-tetrahydrocannabinol (THC)—was no longer considered a controlled substance but an agricultural commodity. It was a big deal for cannabis professionals, as noted by Kristen Nichols, Hemp Editor for MJBizDaily, in a hemp legalization article:

Marijuana entrepreneurs, for their part, are cheering the change because it offers legal business opportunities for MJ companies that want to diversify into a new plant. Also, the law could open a channel for MJ companies to access public markets and other financial tools unavailable to companies selling Schedule 1 drugs.

What’s Happening Now?

After the 2018 Farm Bill was enacted, CBD prices dropped, creating an unexpected development: the rise in popularity of delta-8 THC, a hemp byproduct.

MJBizDaily reporter Omar Sacirbey notes in an article about delta 8, “When Congress passed the Farm Bill, hemp cultivators and processors were sitting on loads of CBD oil that, until then, was hard to move in a marketplace limited by lack of federal clarity on CBD. The new regulations undammed that supply, with CBD distillate unleashed along with a new wave of entrepreneurs looking to enter the industry.”

Sacirbey points out that because the farm bill made any cannabinoid derived from hemp (which is cannabis containing less than 0.3% delta-9 THC) a legal product, delta-8 products came into play. And because delta 8 is considered an intoxicant, there is also a growing call for it to be regulated for consumer safety.

Jim Makoso, CEO of Washington state extraction company Flowe Technology, told Sacirbey in early 2022, “When it comes to consumer safety, at least some regulation should be required around the QC (quality control) standards. Pesticide testing, residual solvent testing, potency testing, mycotoxins. That would be a good place to start.”

Fast forward to today, and the 2018 Farm Bill is set to expire in September 2023, and Congress has already begun official hearings to pass a new Farm Bill.

What Does This Mean for Cannabis Cultivators and Processors?

For you and other cannabis cultivators and processors, the 2023 Farm Bill is legislation that could potentially bring key changes to the industry. Currently, there is support from the industry and from lawmakers for the Farm Bill to include the Safe and Fair Enforcement or SAFE Banking Act, for it to provide clearer regulation governing intoxicating hemp-derived products and allowable THC content and for it to offer clarity on what levels of hemp can be included in products in the marketplace.

Michael Bronstein, president of the American Trade Association for Cannabis and Hemp, told MJBizDaily’s Chris Roberts, “There was no thought at the time (in 2018) that intoxicating hemp-derived cannabinoids would be permissible in any way in the marketplace, and now an entire kind of gray-market product category has emerged. Every day now, I’m reading in a mainstream publication about delta-8 products being sold in gas stations or smoke shops. It’s created a lot of regulatory issues that need to be addressed in the upcoming Farm Bill.”

Additionally, the push to consider marijuana reform at the federal level continues to grow in Washington DC. Should legalization at the federal level ever become reality, cannabis companies must be prepared to:

  • Manage the layers of regulation that will be added to state and local rules for growing, packaging, testing and marketing of their cannabis products.
  • Streamline their quality, financial, compliance and traceability processes.
  • Ship products across state lines.

In reference to the last bullet point, multi-state operators (MSOs) currently are unable to ship across state lines, which means they must operate independent facilities in each state. And many are utilizing separate business management solutions, resulting in limited insights into how their business is operating as a whole.

But there’s good news.

A comprehensive cannabis ERP solution, like CannaBusiness ERP, can help you consolidate your finances and data, providing you and your team with a unified platform and accurate information for making better, more strategic decisions. Cannabis software also provides the features and capabilities you need in order to morph from a disconnected, rigid cannabis business into a cohesive, flexible one.

This agility is particularly important should cannabis federalization ever occur. You’ll be able to pivot quickly, flex with the changes and expand successfully.

To learn more about how CannaBusiness ERP— Cannabis business software built in Sage X3 and delivered by NexTec Group industry experts—can help you with the upcoming Farm Bill’s changing regulations, contact our experts today. We’d love to chat.

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