#044 - Breaking News: Farm Bill Flux and Fragmentation of Hemp Regulation w/ Michelle Bodian of Vicente LLP

Speaker 1: 0:00

Hey everybody, welcome to High Spirits. I'm Ben Larson and with me, as always, is Anna Rae Grabstein. This is episode 44 and we're recording Thursday, may 23rd 2024. Oh, my goodness, we have a show for you today. I don't think we could have had more fortuitous timing on this one. We have Michelle Bodian on from Vicente and we're going to be talking about the farm bill and what's happening with the divided states of hemp, uh, and the continual fragmentation there. But man, oh man, uh, nra big farm bill news, uh, even just last 12 hours, for 24 hours, uh, my phone has been just ringing off the hook and off the hook. It's just insane. So I'm in new york, um, different location again, um, trying, I don't. I haven't even stepped foot in the in the canaccord conference that I actually am here for, but um, has spent a great time up until late last night, uh, really enjoying the company of a bunch of people excited about what was happening, especially in hemp beverage. But a little bit of wind out of the sails this morning.

Speaker 2: 1:13

Yeah, you know, when we scheduled, michelle, we had a hypothesis that our listenership was really interested to dive into the state by state patchwork of hemp regulations and laws and that we could have a really robust conversation about just that, and we were going to avoid talking about the Farm Bill unless something big happened. And something big happened and we got new language, and so that is what we're going to be talking about today. I guess some people might have thought this was coming. I think both you and I were pretty surprised and we're pretty dialed in, so I think that we're probably not alone in that.

Speaker 2: 1:55

And on top of that, I mean, come on, this has not just been a big week on Farm Bill and Hempside. Yesterday was the first oral arguments in the Boies-Shiller case in Massachusetts, which is seeking to end prohibition using the judiciary, which is wild. We've got New York through all kinds of wild moves out there last week when they announced that they're going to be overhauling their entire regulatory body, changing the leadership, and they're going to stop issuing loans from the social equity fund, I mean it has been a big week in cannabis and in hemp. So, yeah, if you're feeling the whiplash, you're not alone.

Speaker 1: 2:35

I remember back hosting marijuana today. We'd enter certain periods of like, oh, it's kind of a boring news week and we'd have to comb through marijuana moment and see what was in the news and it's like, oh, we could build an interesting narrative around that. This is not one of those times. It's coming at us like a fire hose and I'm excited to talk to Michelle. I think we should maximize the time with her and bring her on.

Speaker 2: 3:01

Yeah, let's do it. I'll cue it up and give the intro. Michelle Bodian serves as a partner in Vicente LLP's Boston and New York offices, where she's the co-chair of the firm's hemp and cannabinoids department, and she also serves as the general counsel to the Hemp Beverage Alliance. And before joining Vicente, she worked as a regulator and legal counsel in the Massachusetts Department of Agricultural Resources and before that worked in environmental and real estate law in Connecticut. So she has a really unique perspective as both a lawyer representing the industry, but also someone that's been on the other side working as a regulator, and I'm really excited to welcome Michelle today.

Speaker 1: 3:45

Hey, michelle, and she's also like one of the most treasured resources for the Hemp Beverage Alliance and the amount of updates that she gives the group every other week yeah, it really displays how much and how fast things are changing in the hemp space. So, michelle, really appreciate all that you do for for the community yeah, oh, do things change here?

Speaker 3: 4:11

I didn't know that, thought it was nice, uh nice, static, static laws. No updates, no changes news to me.

Speaker 2: 4:18

Well. So with that, michelle, would you give us an update on, uh, what has been happening with the farm bill over the last week and even more recently?

Speaker 3: 4:30

Yeah, everything, I guess, would be the short answer. The longer answer. You know, as everyone, I think, hopefully knows, every five years we get a new farm bill. We had our last one in 2018, signed December 20th 2018. It's pretty often for farm bills to not hit that five-year, 10-year. Over the past 20 years I think we've had two or three that were on time.

Speaker 3: 4:53

Everything else takes a little bit longer to get the federal government aligned so consistent with that. We didn't quite get the 2023 farm Bill we were expecting, so it's already kind of slipped. We've had continuing resolutions to make sure those key programs continue to be funded. You know SNAP and WIC and all of our commodities grain, corns, all of that. So you might not like where the funding is, but at least everything maintains that it's continuing to be funded.

Speaker 3: 5:23

I always like to get on my agricultural soapbox and remind people that the farm bill, agricultural omnibus bill, keeps America fed and growing, keeps all of our imports, exports and does a lot more than hemp, which is what's bringing everyone, I think, today to the conversation where we're going to focus. But a lot goes into this program and it does take a little bit longer to get done. So about two weeks ago now, although I will say I'm losing track of time we did get previews from both the House and the Senate of what their versions of the farm bill is going to look like. For a while we only had previews, so kind of explanatory headers and a couple of key details, of which we didn't really know a lot of details about hemp. On the Senate side, all we had was two sentences saying industrial hemp is going to be defined, and from that everyone tried to figure out what does that mean? You know, used to say 2014 Farm Bill said industrial hemp. 2018 Farm Bill said hemp.

Speaker 3: 6:20

What is going back to industrial hemp as a defined term mean left speculating what that's going to look like, and thankfully the House didn't keep us in suspense for too long. So we did get full language come out, sponsored by GT Thompson, and we do have the Farm, food and National Security Act of 2024. So what that does is give us finally the full language, the full draft on the House side of things, and that's the base text. So there's going to be amendments and we'll get to the amendment that. That happened yesterday kind of late, late in the game, but that did give us an overview of what it's going to look like kind of generally.

Speaker 3: 7:03

So in that base text we do have the same definition of hemp from the 2018 Farm Bill. That same definition carries over for right now in the base text. So hemp's going to remain the same, but we did get some new definitions. We had a first draft and then within 24 hours we already had an update to that base text. So happy to kind of walk through, kind of already, the two iterations we've seen in the amendments at and how long we might be looking at before we actually have something put in place, because I was talking to a number of people upstairs at this conference and it's like, what's this mean?

Speaker 1: 7:55

Is it over, like all this kind of stuff, and I'm like I'm pretty sure like this is just the beginning and we're going to have a whole series of rollercoaster events over the next several months. But let me ask the expert, michelle, and tune into High Spirits. Thank you.

Speaker 3: 8:10

Building suspense. All right, let's get to the punchline and the good stuff. So for those not familiar with the federal process I think almost everyone's familiar with the state process Basically the exact same thing Amendments get filed, you got to go through both branches of the House and the Senate, they got to reconcile everything. We might not even get a farm bill this year. So amendments are going to get filed, amendments are going to keep getting filed and we're probably months or even a year away from what final language is going to look like.

Speaker 2: 8:38

So if anyone doesn't like anything, that's in any portion of this and many people are upset.

Speaker 3: 8:43

use your legislative process, write to your congressperson, let them know what you don't like, but it's very likely the final version is going to look nothing like this of what's proposed right now.

Speaker 1: 8:53

Okay, that was a good punchline.

Speaker 2: 8:55

And so people are up in arms about an amendment that was filed in the House, and the House version is in committee right now. Is that right?

Speaker 3: 9:04

Yes, so right now, live, it's in committee. There's been over 50 amendments that have been filed, of which the Mary Miller Amendment is one. This is the only one that specifically addresses Hamill, but there's been 50 amendments to the base tax that have been filed on all of those other agricultural programs that are contained within the within the farm bill.

Speaker 2: 9:30

And I think the Mary Miller amendment is what what people are are up in arms about and that the industry is is really watching. Can you, can you tell us what the Mary Miller amendment says?

Speaker 3: 9:39

Sure. So you know it would be hyper-focused on what cannabinoids are permitted. It would be removing any non-natural cannabinoids from the definition of hemp. So any cannabinoids not found within the plant, any cannabinoids made synthetically, so what all that means. So you know, delta A, delta 10, hhc, thco, thcjd, so all of those cannabinoids would not be within the definition of hemp. And then the second thing that would not be considered within the definition of hemp is any quantifiable amount of THC. So we don't have a defined term there, we don't have a level. And then that level would be set, presumably, given where state legislation is going. Presumably it would be any 0.5 milligram or above, or anything like that. Any detectable amount of THC would not be considered hemp.

Speaker 2: 10:31

Got it and it sounds like this. Like you said, this is the only amendment focused on hemp that has been submitted. Yes, thus far in the House.

Speaker 3: 10:40

Yep and all amendments had to get in in this first phase by 11 am. They'll be, and this is the first one and only one so far, but through this process there'll likely be other amendments and even the original draft of the House text. It was already amended once by the drafter. So you know, within the span of 48 hours we've already seen two different versions of how the farm bill is going to be addressing hemp.

Speaker 2: 11:07

And if you want to have me back on a guest in four months.

Speaker 3: 11:10

I'm going to tell you there's going to be 26 other versions between now and then, or some number like that.

Speaker 1: 11:17

I do think that's helpful context kind of, because I don't know, if you're not familiar with the process and you see this news and you know the US hemp roundtable is pretty good at drawing people's attention to incendiary language like this. Yeah, it could cause a lot of panic and maybe panic is good. In this case it causes people to get involved and ask questions and write letters and do all that kind of stuff. But yeah, it's not like this is all going away overnight.

Speaker 3: 11:44

So does no, and if those who were able to tune in this morning and watch the sausage get made, as it were I mean they bipartisan lines like people are not agreeing on anything here there's, you know, the knives are out on all various aspects.

Speaker 3: 11:58

So, yeah, we've got a ways to go. I do think staying engaged in the process is always great Knowing the language, watching the drafts, engaging with your congresspeople, to you know, lobby for the changes you want to see but this is not that different than what we went through in 2018 and 2014. This is just, you know, back to schoolhouse rock.

Speaker 1: 12:19

This is just how laws are made, and then the process is going to take a while I do think the social aspect in our cannabis and hemp community is an interesting kind of layer here, I think battle lines if they had not previously been drawn are really starting to be obvious and I think there's going to be some interesting opportunities here to either build alliances and unify approaches here. Interesting to see how it all rolls out. If anyone watching follows whether it's Chris Lindsay from Attach or Brett Worley from MC Nutraceuticals and the US Hemp Roundtable from mc nutraceuticals and the us hemp roundtable, um, and if you don't know either of those people very polarizing in the hemp and cannabis discussion, um, but yeah, it's. Uh, you know who's backing what part of these amendments and bills is is very telling about, um, how people see the future of of cannabis and cannabis legalization.

Speaker 2: 13:25

And the truth is is that the thing that has massively changed since the 2018 Farm Bill is both the cannabis and the hemp industries and the growth on both sides.

Speaker 2: 13:38

You know there's been an enormous amount of progress on cannabis legislation and with that there's been growth of cannabis companies, while in parallel there's been hemp companies growing side by side and they have not always played well and they don't always see the world the same way.

Speaker 2: 13:59

And you know we've talked a few times about different estimates for the size of the hemp cannabinoid market in the US, and certainly the biggest one comes from Beau Whitney and his analysis that says that the market is upwards of $25 to $30 billion a year, depending on if it's the low or high estimate. But that's a massive industry size and that is a lot of small businesses and a lot of independent workers working in the space and a lot of consumers that are trying these products, and so when people see this language like the Mary Miller Amendment, there is an inevitable kind of flipping of the stomach of oh my gosh, what does this mean? And so I'm sure that people that work in these businesses, own these businesses, are starting these businesses, investing in these businesses, are peeled to maybe this conversation, but also to all the news about what this could mean to their perspective on the next couple of years in their businesses.

Speaker 1: 15:06

Well, and an interesting part of the narrative right now is like the impact of farmers. Right, and I've seen some language out there that's saying that you know this, protecting what's going on right now or the trajectory of a freer flowing hemp market is not in favor of the farmers, and I immediately, like a big question mark appeared in my head. I was just like, well, all that material is coming from somewhere and if you outlaw a large portion of that you know 25 to $30 billion, I think it most certainly will, will impact farmers, and so I'm you. I can say that statement without saying pro or con. Like you know where I stand on on any level of the regulation of market, it's just factual that this will have a massive impact to farmers, I believe.

Speaker 2: 16:04

Yeah, and to go even further into that, michelle, as someone that has worked in agriculture as a regulator and now is working in cannabis and hemp, how likely is it that you think that you talked about how the sausage is made with the farm bill? And I'm wondering how likely you think it is that the that the final language gets so granular to gets even more granular, to start maybe prohibiting certain synthetic cannabinoids over others and allowing certain levels of of THC that are not just straight prohibitions. Is that something that we've seen in the past with the Farm Bill or do you think is likely to happen as part of this process?

Speaker 3: 16:53

Oh, what are my thoughts there? So I think the Farm Bill and I'm going to keep going back to this, I'm sorry, but as an omnibus agricultural bill it goes through certain committees. This isn't a finished product bill like a standalone bill. So this isn't going through health committees. This isn't really going where you would need to go if you were to pass federal legislation for finished products. So FDA's authority, who regulates finished products, has the role. They've got a couple sentences in here reminding everybody, regardless of what this says, fda has a role to play.

Speaker 3: 17:29

But if we were looking for a finished product type bill and legislation, I think that needs to be standalone legislation. I don't think it's going to come through this bill because of the committees. It goes through congressionally and I think at some point FDA is going to raise their hand and say, hey, you shouldn't be doing this here. This needs to be through a different vehicle. Stay in your lane and go through your ag committees. If you want to start regulating finished products, if you want to be putting really tight milligrams, that's fine. Maybe I don't know what they think about it but go through other channels, go through other lanes.

Speaker 1: 18:08

We're getting some pretty good engagement from the audience today, so I wanted to kind of go through some of the questions that have popped up and just make sure that we're addressing people really quick. Joey Cannata, the Mary Miller language has not passed yet. It's in markup with committee right now, even if it does pass through committee at this point in time. Michelle, correct me if I'm wrong, but there's a long, long path ahead still A lot of ups and downs, a lot of amendments still to come, and then we have the whole other half of the conversation to happen after that. Steve Cottrell was asking with regards to HHC, THCP and THCO, do you see a heavier regulation handprint coming down on those to slow down these areas? This is causing many states to ban hemp delta-9. And what are your thoughts?

Speaker 3: 18:54

I think with the Mary Miller amendment, certainly there's an effort to redefine hemp and hemp cannabinoids what's natural, what's controlled.

Speaker 3: 19:02

We didn't talk about it yet, but with rescheduling of marijuana from schedule one 1 to Schedule 3, there also is language in there that talks about you know what is marijuana and talks about naturally derived Delta 9. And there's language in that rescheduling federal regulation that's open for public comment Comments are due July 27th that says non-naturally occurring hemp cannabinoids are controlled substances. So just want to remind people there are two different things going on right now federally that could impact the cannabinoids specifically mentioned there. So, yes, I think this Mary Miller amendment, or other future amendments that are likely to come, probably will be looking to address those cannabinoids, and then DEA, through their rescheduling process, is also looking to remind the public about what they view as a synthetic cannabinoid versus a natural cannabinoid. And then we're waiting for a whole other set of regulations from DEA that they never finished from the 2018 Farm Bill that may further impact this. So short answer yes, I see some of that will be impacted in one of these three lanes.

Speaker 1: 20:10

Yeah, it's when this all came out last week it's only been a week, folks that it was like three years.

Speaker 3: 20:19

I disagree. It feels very long.

Speaker 1: 20:21

It's like very interesting timing. The DEA puts out theirs with a ton of references to the Farm Bill, and then the next next day the Farm Bill draft drops. So a lot of moving pieces and I really appreciate you tying those together.

Speaker 2: 20:34

Yeah, michelle, you work really closely with the Hemp Beverage Alliance and I'm sure that you have individual businesses as clients as well, and I'm wondering how, if you have advice for businesses about how they should be navigating and thinking about this right now, if they're already in market and they're already selling within the compliance system that they've identified exists today, but they're looking at 12 months from now. How do you plan in an environment like this?

Speaker 3: 21:09

Sure, I mean. The advice I give is just to stay one step ahead of things. None of this is gonna change your life overnight. You know the farm bill we might get one in 2024. I'm hearing we're not gonna get one to 2025. So knowing that runway and that planning ahead, I think, is what helps. You know, even we haven't even touched on states, since it's still federal, but most states have delayed effective dates. You know could be weeks, could be months, of when things are going to stay in effect. But if you watch, if you watch this process throughout, you won't get surprised. You might not like the end result, but at least you've been following along and know that it was a possibility.

Speaker 2: 21:48

Well, so you said 2025., and so that means that whatever we're talking about here, even though this was supposed to be in 2023, we don't really know when this farm bill is going to get finished, and that none of the changes that we're talking about would take effect until the final farm bill is signed and complete, and that most likely won't even happen this year anyway.

Speaker 3: 22:10

Yeah, that's right. So it'll be, you know, effective. When the president signs, is it going to be the current president? The future president? You know a lot needs to go in. And then that sets the federal definition of hemp. And then what we saw play out in 2014, 2018, states then need to go back and amend their definitions if they choose to to meet or match the federal definition. States might stick with their current definitions and then we get a difference between federal and state law. Cough, cough marijuana. So don't know where this is all going to land, but, yeah, likely not going to feel the impact, whatever it says, for quite a few more months here.

Speaker 1: 22:50

I think my blood pressure just dropped 20 points. That's good, thank you.

Speaker 2: 22:58

It's the perfect segue to talking about state.

Speaker 1: 23:01

Where things happen a lot faster.

Speaker 2: 23:04

That the cannabis industry is used to and not the hemp industry quite as much but having having a substance that's federally illegal, that then is legal at the state level, and there are states that have put hemp laws on the books and regulations to implement those laws. And my question, if, if you can answer it and if we were to look at a place like Minnesota that has no-transcript?

Speaker 3: 23:53

I hate to be a lawyer and say it depends, but it depends. So I could see a scenario where if the federal definition of hemp is more restrictive than Minnesota's definition, minnesota might stick with their definition. That has implications there's going to be some interstate commerce issues so the products might not be able to be shipped in and out of Minnesota, but that's a possibility. But I don't think we're there yet of gaming that out Because, like I said, amendments are going to be flying. The first version of the house-based text of the Farm Bill basically kept everything status quo for finished goods and just made it easier to grow and process industrial hemp. Do we flip back to that first version? It's a possibility. Does some version of the Mary Miller amendment or future amendments your browser's got one, you know come out maybe, but I think we're far away from what that looks like. Plus, who knows where rescheduling is going to land and the definitions?

Speaker 1: 24:55

there as well. I think the moral of all this is that Michelle and Vicente are going to be very busy for a long time to come.

Speaker 3: 25:02

A little too busy. Actually it's summer.

Speaker 1: 25:05

Yeah, I imagine. So this is mind-numbing, trying to navigate all this and stay on top of it all. But in an attempt to do so, let's dive into some of the states and kind of talk about what is happening at a little bit of a faster pace. I know there's been a lot of movement Again if anyone's in the Hemp Average Alliance and following the Slack channel and what's happening in every state it's basically the conversation we just had on the farm bill, but at a hyper pace in every state, and so one that's standing out right now and I received a text asking about Illinois and wondering if the most recent bill if you could kind of describe it, and if it actually went through or not, or if it got killed.

Speaker 3: 25:46

I mean the four bills, because I think that's what we're up to right now in Illinois. Yeah, so Illinois and a handful of other states kind of post-2018 Farm Bill really hyper-focused their program on cultivation and processing for hemp and didn't set up as robust regulatory framework for retail products. Other states did. Every state wants to do things a little differently. So Illinois, one of those states that didn't have express regulatory rules around retail sales. So two bills were introduced to expressly regulate the retail sales, adding testing, packaging, labeling, cannabinoid limits they say age gating for sale of the product.

Speaker 3: 26:35

So those bills were introduced and then you know equal and opposite reaction. Then bills were introduced to counter that which wanted to bring these products more under the marijuana scheme in Illinois. So that would be setting a very low dose milligram cap of 0.5 percent per serving or two milligrams per container in order to to make and sell hemp products in Illinois. So I don't, I will say I've been in federal land for the past two hours. I don't, I will say I've been in federal land for the past two hours. So, unless something changed recently, none of these had yet advanced where they need to be for that to be settled. Yet I think there's two, two more weeks of session in Illinois, so this will all wrap up very shortly, but I don't think either have progressed to the point where we can call a winner.

Speaker 1: 27:24

Yeah, the whole interplay of the legislative session where we can call a winner. Yeah, the whole interplay of the legislative session. I know California's assembly ends tomorrow and that was driving a lot of the conversation here in California around AB 2223. And that's another critical state. So, like in California, we've AB 2223 is basically trying to go back and correct some missteps that the legislator uh, accidentally, um allowed for intoxicating hemp products into the market.

Speaker 1: 27:57

Yeah, it's, it's crazy, it's uh, just in the last two weeks, um, I think the the the assembly bill was going to be on the docket for discussion and committee. The date was announced six days before the meeting happened and then it was put into suspension and so it wasn't even discussed in that date. It was taken out of suspension three days later and then passed overnight with a 57 to 0 vote. So it's just really interesting to see again how the sausage is made 57 to 0 vote. So it's just really interesting to see again how the sausage is made. And then we're in a period of time now where it's like okay, onto the Senate and then eventually the governor's desk and you know this again is trying to put the genie back in the bottle. So there's just a lot of activity, whether it's from the hemp side, the cannabis side. Bev Alk is getting involved in all these conversations now. So, yeah, a lot of activity in California too.

Speaker 2: 28:53

What about Texas? I hear there's some action in Texas.

Speaker 3: 28:58

Yeah, in Texas it's interesting their legislative process. They meet essentially every two years, and in the off years they do studies and committees, and, you know, still do some work, but not not as much work as typically is done in other cycles. And the lieutenant governor had come out and said one thing he wants to be studied is Delta A, delta 9 and other intoxicating hemp products. So Texas is one of those states who had passed House Bill 1325 after 2018 Farm Bill, so they do have testing, labeling, registration and a very robust retail market. One thing they didn't have, though, is milligram limits, and they didn't address all cannabinoids, so it's the federal definition of hemp.

Speaker 3: 29:44

So, lieutenant Governor, calling on the legislature to, you know, essentially examine and study what to do about these cannabinoids, and there's a hearing that's scheduled for next Wednesday. There is going to be an opportunity for live testimony and an opportunity for written testimony, as long as you submit 20 copies of your written testimony. You know it's just kind of an open-ended what do we want to do about these products? But it's obviously the opening opportunity for the state to start addressing so likely legislation is going to be filed in that state, looking to regulate it, and then you know, with all of these states and federally.

Speaker 3: 30:23

Getting involved early and often with the legislative process gives you that opportunity to kind of make it a help and work for your business. So, yeah, the Senate Committee on State Affairs. The hearing is going to be at 9 am Central Wednesday, May 29th. No exact language. Banning Delta 8 and Delta 9. Examine of the sale of intoxicating hemp products in Texas. Make recommendations to further regulate the sale of these products and suggest legislation to stop retailers who market these products to children. So that was a public notice. I posted it on my LinkedIn with the links to all the things of where you can testify and how to testify. But, yeah, that's going to be a state to watch play out. It's got a huge hemp product market. Yeah, definitely shout out to your LinkedIn profile If you're not following Michelle on LinkedIn.

Speaker 1: 31:06

Go connect with her because it's got you know a huge hemp product market. Yeah, definitely shout out to your linkedin profile. If you're not following michelle on linkedin, go connect with her because it's a wealth of steady stream knowledge of coming what's happening. Let's go over to another critical state, florida. A hemp bill and a cannabis bill. That's kind of being tossed back and around a little bit of inside baseball earlier this week, uh, hearing that you know a certain governor was trying to pin the hemp industry against the cannabis industry and trying to get some counter lobbying going on, which we don't need to stoke the fires of a civil war anymore. Michelle, what's happening in Florida from your perspective?

Speaker 3: 31:43

A waiting game. A waiting game, so you know, legislation passed which would limit the hemp cannabinoids that are going to be available in the market, kind of slightly tweaking the labeling requirements and then setting a milligram for naturally occurring hemp Delta 9. Milligrams per serving and up to 50 milligrams per container. That bill hasn't yet been sent to the governor for signature. Once it's actually on his deck, then the ticking clock starts signature or veto.

Speaker 3: 32:15

I learned a fun Florida fact that there's no deadline by which the legislature needs to send a bill. If it gets sent, it would be signed. And if it gets signed it would be signed. If it gets signed, it would be effective October 1st, but the legislature can send the bill October 30th if they chose. So for right now, kind of waiting to see if the bill gets sent and then, if it gets sent, what the governor is going to do with it. And there is, you know, a huge letter writing hand letter, not email writing campaign in you know, requesting the governor veto that bill. But we're kind of just waiting and seeing where it's ultimately going to land.

Speaker 1: 32:55

Which of the states right now are you, you kind of most excited? Well, I guess, I guess excited is a loaded word because that forces you to take a position.

Speaker 1: 33:07

Okay, let me rephrase it I know, I know I'm sorry, I'm sorry, I'm not going to put you up to that. I will put myself up to that. I heard someone say the other day that Kentucky was going to be like Minnesota on steroids. Is there any legitimacy to that statement? Because we all love Minnesota and everything that they've done. Uh, it is weird to imagine that kentucky would be the next one that everyone starts looking at as as a model. Uh hemp market well out myself.

Speaker 3: 33:35

I think I actually said that. Um. So yeah, I will say, in surprising maybe not excited, but surprising trends, the south seems to be embracing and expressly allowing and regulating hemp products in a way that they hadn't been doing previously. So that's a very carefully worded sentence. So, you know, states that hadn't set up programs to allow CBD, hemp, cbd in products have now set up programs to allow hemp Delta 8 and hemp Delta 9 and hemp HHC, which is to me surprising, given that they had since 2018 to set up these programs and they're only now setting them up. You know, just embracing the products and setting up. You know regulatory frameworks with testing, labeling, taxing, age restrictions. You know, similar to Minnesota and kind of following that framework.

Speaker 2: 34:37

So one thing that we're bringing to light and talking about all of these different states is that the rules are starting to become more mature on a state by state level.

Speaker 3: 34:48

Sorry, I gotta refocus. I was chuckling at the comment.

Speaker 2: 34:52

And, uh, okay, so, state by state, all these different rules, and one of the things that has been really wild to see over the past couple of years is hemp brands getting to um participate in interstate commerce and doing so in a very national brand style way of being able to have centralized distribution, sending products that are all the same into different states where they've decided that they want to commercialize them. And, as this is happening, even when states are creating ways to allow hemp products, they are creating differentiation with packaging requirements, age restrictions, state-level warnings that might be required, and I think it's worth talking about how the landscape is starting to shift for brands who aspire to be a national brand and how groups are going to start managing the needs of different markets they want to participate in from a compliance perspective if you're new and you're starting up, it's not feasible to be printing individual labels for individual markets.

Speaker 3: 36:12

You know it might not be feasible to have resealable tops, depending on your product type. You know if you're a beverage, that's challenging. So a lot of businesses, you know, are starting small or facing decisions and you know weighing risk, reward of. Do you want to go into a market knowing your product doesn't comply with 100% but you get yourself 80% of the way there on the label. You just don't have the magic language that's going to be required in an Iowa or in a Connecticut. Please give us those magic language soon, please. So businesses are making those strategic decisions and as they grow, I'm sorry. So you know centralized operators are then running off individual. You know labels to satisfy. You know Tennessee's language about saying these products may, you know, may have a toxic effect, but there's reasons why you might not want that on your product in all 50 states if you don't know that that's normal in Tennessee but it's not normal in the rest of the state.

Speaker 2: 37:13

Yeah, what you're bringing up is something that I talk about often with folks of that compliance is a spectrum and isn't always black and white and, like you talked about getting 80% there and that decision that a company needs to make and how they decide if they're comfortable being 80% there as opposed to 100% there. I think it is definitely very individual, but a big part that plays into that is enforcement and I'm wondering if you have any insight about enforcement from on state level hemp regulations. I know we've seen some letters that have come from the FDA of label claims like from the feds, but have we seen enforcement from the states anywhere?

Speaker 3: 37:55

FDA of label claims like from the feds. But have we seen enforcement from the states anywhere? Yeah, I mean plenty. Yeah, an FDA, you know, interestingly, hasn't issued any warning letters in 2024 against any hemp companies. They've been hyper focused on and they've been going hard weekly on flavored tobacco vape products, you know, hitting them with custom and borders, hitting them at the, you know, at the import part, getting e-commerce, individual retailers, so hyper-focused on that. But as compared to past years, like we're already mid-year, we don't have a single warning letter. Fda. If you're listening, I'm not encouraging you to catch up, I'm just stating a fact there. But yeah, that's federal and at the state level you are seeing enforcement and it's either.

Speaker 3: 38:42

You know, in Texas there's a lot of articles about sheriffs and law enforcement. You know some of it. Ultimately, you know we tend not to get the end of the story and the follow up, just the headline at the beginning. But confusion, particularly around flower based products Is this hemp? Is this marijuana? Do you have chain of custody to prove it? But even then, the non-flour products state AGs offices, connecticut has been issuing a number of lawsuits, a number of targeted enforcement under consumer protection laws, missouri governor coming out issuing lawsuits and going after some products. Florida, even pre this legislation passing there was legislation last July the Department of Agriculture has been doing a number of sweeps of all aspects of the supply chain and they've been targeting particularly labels that are not in compliance. So even getting down just not product categories before to hyper-focusing on label violations. So yeah, I'd say at the state level it is happening and obviously that's just what's publicized. And then there's all the private things happening that no one wants to talk about.

Speaker 1: 39:50

Michelle, I know we're kind of in uncharted territory here, but you've been doing this for some time now. I want to go back to the farm bill a little bit, because it's like the big umbrella that is kind of over everything right now.

Speaker 3: 40:04

Yeah, federal law, state law, yeah, yeah.

Speaker 1: 40:07

Do you have any thoughts of where you think this ends up, say a year from now? And I'm not going to hold, I'm not going to pull receipts on you, I'm going to acknowledge that none of us know. But like it's so hard to imagine, like there's a lot of commerce that has spun up over the last four or five years and it is like I mentioned at the top of the hour, like there's a lot of farmers involved, as anna ray said, there's a lot of small businesses involved and, frankly, a lot of people outside of and, frankly, a lot of people outside of the hemp and cannabis industry involved. Big Al is out there. I know they're doing work at the federal level and at the state level. Does this genie really go back in the bottle?

Speaker 3: 40:45

I mean short answer, no idea.

Speaker 3: 40:49

Longer answer.

Speaker 3: 40:53

Given what the National State Association Department of Ag's wish list for the Farm Bill has been and given where other, as you say, farmer trade associations they're all hyper-focused on having things on the cultivation and processing side be easier for industrial hemp, I think prediction some version of that base text is going to stay that does ease the burdens on growing and processing for textiles and grains and fibers.

Speaker 3: 41:23

And then I think, if this farm bill gets as contentious as it already has been and will continue to be, especially leading up to the election, I could see a scenario where everyone's too busy fighting over all these other things, that the definition of hemp stays where it was in 2018 and you know basically status quo, which was again the the base version of the house text that we got before they changed. It said all of that. So I could see a scenario where everything kind of stays the same for cannabinoid hemp and industrial hemp's burdens get easier. They're predicting this is going to be the most expensive farm bill, at $1.5 trillion over the next five years. So a lot of discussion is going to be focused on the other 999 pages and not the three pages of hemp.

Speaker 1: 42:13

Yeah, makes sense.

Speaker 2: 42:14

What's your prediction, Ben?

Speaker 1: 42:17

I'll just say ditto, I'm going to go with Michelle. Why would I follow with my own prediction after the smartest person on the call just gave theirs? That would just be social suicide. I hope you're right. My job as a business owner is to plan for the worst and hope for the best, or lobby for the best. Like I said, there's just too many forces from either side. It's such a polarizing discussion to imagine this to just go through in the direction that it currently is going. If money talks as it often does in the in the U S, I think there will be a significant headwinds to the current trajectory.

Speaker 2: 42:59

Well, we are getting close to our wrap time. Are there any other super hot topics we need to touch on before we, before we move to our last call?

Speaker 1: 43:08

What's? What states do we not talk about? I'm excited, I'm excited for going up to minnesota in a couple weeks. Uh, meet with all the regulators at the camera conference and see what their take is on all of this and try to get the buzz um in those conversations. I think it'll, and who knows how much will change in between now and then with all of this um. So, yeah, stay tuned. I I don't know. Michelle, you mentioned, have you on in four months? I think we absolutely should probably just schedule that, because it'll be very necessary.

Speaker 3: 43:42

Yeah, and I guess I don't know if it's comforting or not, but this has been happening every year since the 2018 Farm Bill. Like every year, states are evaluating hemp products, seeing what they want to do with them, not do with them. Last year, 27 states changed their hemp product laws. You know, so far this year, I think we're up to seven or eight, depending how we count it, so kind of, by comparison, it's not that much worse than last year. So this, this happens every year for those that are new to the fund, and I imagine it's going to keep happening. You know wherever the farm bill language ends up. You know every everyone thinks they've got a new way to improve, and then, you know, a new idea to help their business. So just stay engaged in the process and then, once the laws are written, someone has to implement them, and then we get regulations.

Speaker 2: 44:30

Regulations are subject to public comment, so lots of opportunities to kind of raise your hand and get involved and share your two cents and what you're bringing to the forefront is and this is a comment a stream that we talk about often, but just if, if you are an entrepreneur or a founder, an operator in the cannabis and hemp space, legal and regulatory navigation is the name of the game.

Speaker 2: 44:54

It's something that just has to be a part of the DNA of your strategy and the DNA of of your ability to metabolize change and pivot as an individual. So, whether it's yoga or meditation or whatever it is that you all need to do to to find that peace inside of you so that you can be strong enough to deal with the winds of change, like I'm here for all of it, and it's part of what makes this space not for everybody, but also fantastically challenging, dynamic and fun at the same time, and it keeps me waking up every morning to be excited about it, because you know it is not the same as it was the day before. With that, michelle, let's turn the mic over to you for your last call.

Speaker 3: 45:44

So I know I probably should be talking about something Vicente related, but I'm going to plug HBA's festival. So, first in the country, hemp Beverage Festival opening up up it's going to be june 8th, open to the public. Uh, tickets are on sale now. Come hang out in minneapolis and drink some hemp beverages. 30 of the brands are going to be exhibiting and you can try all the tasty things and then, if you want to go, make your own product, you get to join the fun of keeping up with all this regulatory chaos and anna ray and Ben will be there drinking hemp beverages.

Speaker 1: 46:16

We'll be there.

Speaker 2: 46:17

Yes, yeah, it's going to be a party. You can drink hemp beverages with us.

Speaker 1: 46:21

We'll try to bring as many of those regulators over from the CanRA conference to get high with us and see the way.

Speaker 3: 46:29

In a responsible manner.

Speaker 1: 46:31

In a very responsible manner. Michelle, thank you so much. Timing couldn't have been more impeccable. We appreciate you taking this time out of your day, especially when I know your phone is ringing off the hook and your emails are flowing in, so we're going to let you get back to that, but this has been an invaluable session. I can't wait to do it again. Thank you so much.

Speaker 3: 46:53

Thanks for having me.

Speaker 1: 46:54

All right, anna Rae, I do feel my shoulders are down a little bit more than they were this morning. The blood pressure is down, everyone watching. I hope you take a deep breath. We're going to get through this, it's going to be okay.

Speaker 2: 47:10

Jill is so chill and relaxed. I appreciate that. Okay, michelle is so chill and relaxed.

Speaker 1: 47:15

I appreciate that she might be used to it. I think she's like okay. She's like come on kids. Come on kids, it's okay. No, it's all right. We needed it Very timely, thank you. What about you folks? What'd you think? Let us know what you think in the comments. Share it, like it, like it, subscribe it, do all the things. We're immensely, immensely grateful to Michelle and Vicente and everyone doing the hard work. These are very live conversations and it's moving faster than ever. So get involved, do whatever you can, whatever side you're on. Honestly, just, we'll all get there eventually. Thank you to our teams at Vertosa and Wolfmeyer for keeping the mics and lights on. And yeah, I'm just going to wrap it up, let's get out of here. All right, folks, until next time, stay curious, stay informed and keep your spirits high. That's the show.