Is CBD Oil Illegal?
According to Federal and state law, the use of cannabis and its legality has been a hot topic for many years. One of it’s most popular derivatives of hemp and marijuana, CBD oil, is a substance that keeps coming up in many discussions regarding the matter.
While the sale and use of industrial hemp have been made legal in many states, there are still laws that regulate its use.
If you’re wondering if using CBD is legal in your state, then keep reading.
In this article, we’ll be giving you all the answers you need. Including which states CBD is legal, the farm bill, the controlled substances act, and other regulations that guide CBD in the United States.
Table of Contents
What Is CBD Oil?
To properly understand why industrial hemp CBD oil should be legal or illegal, we need to have a proper understanding of what CBD is and its effects on those that use it.
CBD or Cannabidiol oil is one of several cannabinoids that can be found in cannabis Sativa. It does not exist in any other natural plant on Earth.
Unlike its fellow cannabinoid THC, products containing CBD do not give users the “high” effect, and it is not intoxicating in any way.
It is common knowledge that many people use cannabis Sativa for the sake of recreation. But if industrial hemp CBD oil is non-intoxicating, why are more and more people using it?
This question will be answered below.
Why Do People Use Industrial Hemp CBD Oil Regardless Of Its Legal Status?
Before the 2018 farm bill made hemp CBD oil legal, people used CBD oil to treat different medical conditions. Some of these medical conditions include chronic pain and cancer. It has also been included in many dietary supplements.
Here are a few reasons why people use CBD oil, regardless of its legal status.
• CBD for stress relief
• CBD for anxiety treatment
• CBD for the treatment of chronic pain
• CBD for skin treatment
• CBD for sleep improvement
Is CBD Oil Legal In All 50 States?
The 2018 Farm Bill effectively made industrial hemp CBD legal in all 50 states. The farm bill removed many prohibitions against CBD, but many are still confused about the true legality of CBD products, including CBD oil.
Tetrahydrocannabinol THC and CBD are both derivatives of Cannabis plants, and it is the unique effects it has on the user that have been used to enact federal and state laws.
Even though hemp extract CBD products are federally legal, the legality of CBD oil itself depends on your state laws, as well as the source of the CBD.
As we just mentioned, hemp is legal in all 50 states. This means hemp extract CBD oil and other products containing CBD are also legal in every state. Well, as long as it has less than 0 3 THC.
On the other hand, marijuana isn’t legal in all states. This means that marijuana-derived CBD products are not federally legal but may be legal in the states where marijuana itself is legal.
The main confusion among users is that hemp and marijuana CBD are very similar, being that they are both derived from cannabis plants.
According to the U.S government, marijuana is any cannabis that contains more than 0.3 THC. Simultaneously, it classifies hemp plants as any cannabis that contains less than 0.3 percent THC.
It has been proven that marijuana grade cannabis doesn’t produce as much CBD as hemp grade cannabis. This is why there are more hemp-derived CBD products than marijuana-derived CBD products.
Any marijuana-derived CBD oil you buy would most likely be illegal unless you are in a state where marijuana is legal. For the CBD to be fit for sale and consumption in non-legal marijuana states, the high concentration of THC has to be first extracted from the CBD to meet the legal CBD requirements.
The best cannabis for making CBD products is hemp. It is also FDA approved, thanks to its low THC concentration, which makes it legal in all states in the U.S.
To be clear, any cannabis-derived CBD oil with more than 0.3 percent THC is illegal. While cannabis that has less than 0.3 percent CBD is legal.
Basically, any CBD oil derived from hemp is legal in America.
What States Is CBD Legal In?
Hemp and CBD products in all forms used to be a controlled substance in America, and it still is to a certain degree. But the 2018 Farm Bill made CBD oil derived from hemp plants, which contain less than 0.3 THC, legal in every state in the United States. This means the sale of CBD in this form is legal in each of the 50 American states.
The Farm bill is new, so it may take some states time to acclimatize.
The legality of CBD by the state is grouped into 4. These are –
• CBD friendliest states
• CBD friendly states
• a CBD gray area states
• CBD states with concern
The “friendliest states” include –
• Oklahoma
• Indiana
• Kentucky
• Illinois
• Maryland
• Alaska
• Colorado
• New York
• Missouri
• North Carolina
• Oregon
• South Carolina
• Rhode Island
• Wisconsin
• Vermont
• Texas
• Utah
• Tennessee
As for the CBD friendly states, any hemp grown in a Farm Bill-compliant department of agriculture pilot program is not classified as Marijuana.
Members of the “friendly states” include –
• North Dakota
• New Mexico
• District Of Columbia
• Kansas
• Hawaii
• Montana
In the gray area states where CBD is legal, there are no prohibitions against the selling of industrial hemp cannabidiol CBD products
The “gray area states” include –
• Delaware
Florida
• Arkansas
• Connecticut
• Georgia
• Maine
• Louisiana
• Iowa
• Massachusetts
• Nebraska
• Idaho
• Mississippi
• Minnesota
• New Hampshire
• New Jersey
• Virginia
• Pennsylvania
• Washington
In the “states with concern,” there are no explicit prohibitions against retail selling on industrial hemp-derived Cannabidiol CBD products.
These states include –
• California
• Alabama
• Arizona
• Wyoming
• West Virginia
• South Dakota
• Ohio
• Nevada
• Michigan
Is CBD Legal in 2020?
As of 2020, hemp derived CBD products are legal in all 50 states in America. However, marijuana-derived CBD products are only legal in states where marijuana itself is legal. Other than that, it remains a controlled substance.
The controlled substances act classifies hemp as any cannabis plant that doesn’t have more than 0.3% THC. As for marijuana, the government classifies it as any cannabis plant with more than 0.3% THC.
The severity of the laws vary by state, so you need to be sure what the laws are regarding hemp or marijuana-derived CBD products in your state to be sure how much of a controlled substance it is.
As for the production and sale of hemp derived CBD products, the laws and regulations surrounding them are very clear.
The same way many municipalities in America still prohibit alcohol almost a century after alcohol was made legal, local laws prohibit the sale of hemp-derived products regardless of its legality by federal law.
There are still a few states that see marijuana-derived CBD products as marijuana itself, especially when they contain more than 0.3% THC.
Here’s what you need to know about the legality of CBD in 2020.
• As of November 2020, marijuana use has been legalized in some form in the District Of Columbia and 35 other states in the United States
• Marijuana has been classified under U.S federal law as a Schedule 1 drug by the controlled substances act (This is because of its high abuse potential without any accepted medical use)
• According to the controlled substances act, marijuana products that contain more than 03 percent THC is technically illegal in the U.S
• It is illegal to market CBD by adding it to foods and labeling it as a dietary supplement
• It is illegal to market CBD products with unproven health benefits
• It is illegal to market CBD products that do not state the THC percentage on the packaging
The FDA will continue to update the public as it learns more about CBD.
That being said, hemp-derived CBD products remain legal in all states in America as of 2020. The Food and Drug Administration (FDA) is responsible for keeping the public updated as more is learned about CBD.
Is CBD Oil A Drug?
To fully understand if CBD oil is a drug or not, we have to be certain of what a drug actually is.
The dictionary defines a drug as a substance that has physiological effects on a living thing when ingested or introduced into the body.
CBD oil is not intoxicating, meaning it doesn’t get the user “high” if ingested. However, it does have some other healing effects on the body, so medical marijuana use has become prevalent.
This means it is indeed, a drug.
Like all drugs, CBD can be beneficial to people but can also have side effects. If you are already on a particular medication, CBD may disrupt the effectiveness of the drugs you are using.
The risk of sedation, drowsiness, and further brain injury can also be increased if CBD is used with alcohol or any other drug that can slow down the brain’s activity. Such drugs include anxiety drugs, panic drugs, and sleeping pills.
Some studies have shown that male reproductive toxicity and fertility damage can occur in animals that have been exposed to CBD.
The many side effects of using CBD can be reduced or eliminated if CBD is reduced or stopped. Some of the most common side effects of using CBD are listed below.
• Reduced alertness (sleepiness or drowsiness)
• Gastrointestinal distress or a reduction in appetite
• Mood swings
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What Percentage Of CBD Oil Is Legal?
CBD oils are derived from the cannabis plant. According to recent federal laws, a CBD product is legal as long as it doesn’t contain more than 0 3 percent THC and comes from hemp.
Any CBD product that has more than this is not legal.
Legality Of Marijuana Businesses and Banking
The federal government is responsible for regulating the activities of cannabis dispensaries. These dispensaries sell CBD products but are required to do so legally.
Licensed dispensaries can sell CBD derived from marijuana, even in states where the substance is illegal. Most especially in states where medical marijuana is legalized.
It is costly to obtain a dispensary license in any of the 50 states. Abiding by all Marijuana laws in your state, or any state for that matter, is also complicated. This is because the laws are updated regularly.
So, if you plan to set up a dispensary, you should do some research regarding the marijuana laws in your state where you reside.
Your responsibilities would be to check the most recent laws, find compliant rental properties, and maybe even grow the plants yourself.
One of the most complicated aspects of the marijuana business is that there aren’t many financing options.
Thanks to federal laws and the potential risks involved in the cannabis business as a whole, many banks weren’t willing to put up the needed funds at first.
Any federally-insured credit union or bank that decides to work with marijuana companies understand the risks involved, even if the substance is legal in their state.
It is possible for financial transactions that involve earnings from marijuana sales to lead to prosecutions under unlicensed money transmitter statutes, bank secrecy act (BSA), or money laundering statutes.
Nonetheless, the cannabis business has proven to be a profitable one, and that is why, as of today, more than 700 banks and credit unions are working with Marijuana businesses.
In 2014, Numerica offered its services to the marijuana industry. It was one of the first financial institutions to do so. Other credit unions have followed suit since then.
Financial institutions consider 5 major costs before they do business with cannabis companies.
1. Compliance Costs
As the regulatory policies keep changing, credit unions and banks are forced to spend a lot of money and time to make sure their partners are operating in line with the most current laws.
2. Legal Costs
It’s true banks could have some financial liabilities to deal with if their partners are on the wrong side of the drug enforcement administration laws, but that’s not the only potential cost they are responsible for.
These financial institutions will also have to hire legal counsels for advice and handle any lawsuits thrown at them if there are any infringements on a state or federal level.
3. Educational Costs
Since this is a new sector, it would cost money educating employees on THC and CBD laws and the implications of breaking them.
However, spending a little at the beginning on education beats spending a lot down the line if any marijuana laws are broken.
4. Logistical Costs
Being that the cannabis business is cash-intensive, huge logistical costs can be expected.
These costs can range from storage facilities to security personnel needed to guard the product and transportation of the cannabis products across states.
5. Reputational Costs
Financial institutions have other partners, and not all of them would approve of the cannabis business, even if it is legal on both the federal and state level.
The fact that the substance is intoxicating and can be used strictly for recreational purposes may be a turn-off for their partners, who may later decide to sever business ties.
In September 2019, things began looking better for financial institutions that support the cannabis business. Thanks to the Secure and Fair Enforcement (S.A.F.E) banking act.
The bill was passed to protect banks who are interested in financing legitimate cannabis businesses.
The bill got the required 2/3rds majority vote needed to pass the House.
Conclusion
As long as CBD oil is derived from industrial hemp, then it is legal in all 50 states in America. According to the farm bill, of course.
To be fit for sale, it must contain not more than 0.3 percent THC.
Marijuana-derived CBD oil is illegal in states where marijuana itself isn’t legal; this is because it may contain traces of more than 0 3 percent of THC.
If you’re interested in manufacturing industrial hemp CBD products and running interstate commerce with it, be sure to check the most current regulations surrounding CBD oil and its sale in your state or on a federal level.
Doing this will ensure you are operating within the confines of both federal and state law.
Hopefully, this article has answered your question –“is CBD oil legal?”
Thanks for reading.
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