By Jeff Gallagher, founder of Made By Hemp. Helping people find real hemp since 2013. Last updated: October 2026.
Update, October 2026: Federal hemp law has changed since this post was first written. A new definition of hemp, Section 781, takes effect in two steps on November 12 and December 11, 2026. See “What changed in 2025 and 2026” below.
On December 20, 2018, President Trump signed the 2018 Farm Bill into law. Farm bills come around every few years, but this one mattered more than most for our industry. For decades, hemp and the CBD made from it were treated as a controlled substance, lumped in with marijuana. The 2018 Farm Bill moved hemp under the Department of Agriculture and made it an agricultural commodity.
Photo Source: Hemp Business Journal
That change reshaped the hemp industry, including CBD products, which had lived in a legal gray area for decades. The 2014 Farm Bill opened the door with state hemp pilot programs, but the rules were narrow and left a lot up to interpretation, which made it hard for CBD companies like us to know where we stood.
The 2018 law also let hemp farmers take part in USDA programs for the first time, including crop insurance and competitive grants.
The History of Hemp Prohibition
The roots of hemp prohibition go back to the early 1900s. A popular theory holds that newspaper publisher William Randolph Hearst, who had large timber holdings, used his papers to smear hemp as a competitor. Historians still argue over how much that mattered, but the anti-cannabis campaigns of that era helped blur the line between hemp and marijuana, which are not the same plant product.
Ultimately, the charge for hemp and cannabis prohibition was led by Harry Anslinger, a government official who served as the first commissioner of the U.S. Treasury Department’s Federal Bureau of Narcotics. He was a supporter of prohibition and the criminalization of drugs and played a pivotal role in cannabis prohibition.
The Marihuana Tax Act of 1937 was the first big federal step in the crackdown on cannabis, and hemp got swept up with it. In 1969, the Supreme Court struck down key parts of the Act in Leary v. United States.
A year later, Congress replaced it with the Controlled Substances Act of 1970, which treated hemp as marijuana. That is the law the 2018 Farm Bill finally changed, by taking hemp out of the definition of marijuana.
CBD Oil and the 2018 Farm Bill
By defining hemp to include its extracts, cannabinoids, and derivatives, the 2018 Farm Bill took hemp-derived CBD out of the Controlled Substances Act, as long as the hemp stayed under 0.3% delta-9 THC. That opened the door to research, investment, and the CBD products you see on shelves today.
It did not settle everything. The FDA kept its authority over products people eat or put on their skin, and its position is still that CBD cannot be sold as a food ingredient or dietary supplement. States kept the power to set their own rules too, which is why CBD laws still vary from state to state.
Highlights of the 2018 Farm Bill
If you want to read the whole thing, here is the full 807-page conference report. Here is what mattered most for hemp and CBD:
- Hemp came off the controlled substances list. The law took hemp, including its extracts, cannabinoids, and derivatives, out of the definition of marijuana, so hemp-derived CBD was no longer a federally controlled substance.
- Hemp became a regular crop. Farmers could get crop insurance and take part in USDA programs and grants.
- States and Tribes got a role. They could run their own hemp programs with USDA approval and add their own restrictions, but they could not block hemp from being shipped through their territory.
- The FDA kept its authority. Nothing in the law changed the FDA’s power over food, supplements, drugs, and cosmetics, which is why CBD in food and supplements is still unsettled.
Section by section
- Section 7129 (p. 313): Includes hemp in USDA’s supplemental and alternative crops programs. Section 7501 (p. 338): Includes hemp in USDA’s critical agricultural materials programs.
- Section 7605 (p. 347): Orders the USDA Secretary to prepare a report on the 2014 Farm Bill pilot program, and then repeals that program one year after the new permanent hemp program is created. Section 10113 (p. 429): The core of the new hemp program:
- Section 297A (p. 429) Defines hemp as all parts of the plant with no more than 0.3% delta-9 THC on a dry weight basis, including derivatives, extracts, and cannabinoids.
- Section 297B (p. 429) Empowers states and Tribes to submit plans to USDA to implement a permanent hemp growing program. Requires information gathering, testing, and inspection procedures. The USDA Secretary must sign off on, or reject, the plan within 60 days, and consult with the Attorney General. The Secretary can later audit state programs and work with the states to develop corrective action plans where there is noncompliance.
- Section 297B(e)(p. 431): Orders states and Tribes to develop procedures to address violations, including corrective action in the case of negligence.
- Section 297B(e)(3)(B) (p. 432): Individuals who commit drug felonies cannot participate in state or Tribal growth programs for 10 years following the date of their conviction. However, participants in the 2014 Farm Bill pilot programs are grandfathered in to participate in permanent programs despite any prior felony committed.
- Section 297C (p. 432): States and Tribes are required to maintain information on lands where hemp is grown and testing, enforcement and inspection procedures. The USDA Secretary must collect such information to be accessible in real time to local, state and federal law enforcement.
- Section 297D (p. 434): The USDA Secretary is required to submit an annual report to Congress on the program’s implementation.
- Section 297D(c)(p. 434): Nothing in the new law affects the FDA’s authority under the Food, Drug, and Cosmetic Act or the Public Health Service Act.
- Section 10114 (p. 435): Nothing in the act prohibits the interstate commerce of hemp, nor can States or Tribes prohibit the transportation of hemp or hemp products through their territory.
- Title XI (p. 439): Hemp farmers are made eligible for crop insurance, and marketability requirements for the crop insurance program can be waived.
- Section 12619 (p. 540): Hemp is removed from the definition of “marihuana,” and THC found in hemp is excluded from the definition of a controlled substance.
What changed in 2025 and 2026
The 2018 Farm Bill set the rules for seven years. In November 2025, Congress rewrote the federal definition of hemp in a law known as Section 781. It changes three things:
- The 0.3% limit now counts total THC, including THCA, instead of delta-9 THC alone.
- Finished products are capped at 0.4mg of total THC per container.
- Cannabinoids the plant cannot make on its own, and ones converted in a lab, no longer count as hemp.
The changes take effect in two steps, on November 12 and December 11, 2026. The 0.4mg cap reaches some full-spectrum CBD products, including some of ours. For the full breakdown, including the bills in Congress that could still change it, read what the federal hemp ban changes. For how the rules play out where you live, see our CBD legal status guide.
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