In response to the Coronavirus pandemic, advisors to President Donald Trump are advising him to invoke the Defense Production Act of 1950. That’s a big deal for lots of reasons, but one not to overlook: the DPA clearly lists “hemp” as a “food resource” vital to national security in a time of national emergency.
Last week, the Department of Homeland Security issued a memo defining “essential critical infrastructure” in our current national emergency. Because the DPA understands hemp to be a food resource, the complete CBD supply chain should be covered under this essential critical infrastructure designation.
What does that mean?
For years now, the hemp industry has been begging the FDA to issue regulations on hemp that would allow the marketing of hemp-derived CBD products in a responsible way. But the FDA has not been in a hurry to issue those regulations. On its website, the FDA makes its opposition to CBD as a food additive clear: “Is it legal, in interstate commerce, to sell a food (including any animal food or feed) to which THC or CBD has been added? No.”
However, it appears that the authority of the Defense Production Act would overrule the authority of the FDA. Therefore, hemp in all its forms would be considered a “food resource” necessary for national security during a national emergency.
Hemp for victory
When a president invokes the Defense Production Act, it puts the nation on a war footing so that all the nation’s resources are directed to support the nation in a time of crisis.
Current US law ( 7 CFR § 789.1) “provides guidance and procedures for use by the Defense Production Act priorities and locations authority by the United States Department of Agriculture (USDA) with respect to food resources…” which includes “hemp” in the plain language of the law.
Loan guarantees for hemp companies?
Before I co-founded Cornbread Hemp, I worked as a journalist covering cannabis for major news outlets like POLITICO Magazine. When covering cannabis news during this time period, I asked the White House repeatedly (and never got a good answer) why “hemp” was included in this executive order on national defense resource preparedness, signed by President Obama exactly eight years ago in March 2012.
What’s clear is this: this executive order and the Defense Production Act appear to give the Secretary of Agriculture the authority to guarantee loans by private banks for “food resources,” defined in part as “hemp.”
We need Agriculture Secretary Sonny Perdue to clarify this for us right away. When the DPA is invoked, will he have the power to guarantee loans for companies deemed vital to preserving the food supply chain as we battle COVID-19? And if so, will hemp and CBD companies be included in that loan guarantee program? Hemp companies need to know.
Hemp is “essential critical infrastructure”
Last week, the Department of Homeland Security issued a memo detailing “essential critical infrastructure” in a time of crisis. Understanding that “hemp” meets the definition of a “food resource” according to the Defense Production Act of 1950, then all these “food” destinations in this DHS memo also apply to hemp. It’s the entire CBD supply chain:
- Workers supporting groceries, pharmacies and other retail that sells food and beverage products
- Food manufacturer employees and their supplier employees—to include those employed in food processing (packers, meat processing, cheese plants, milk plants, produce, etc.) facilities…
- Farm workers to include those employed in animal food, feed, and ingredient production, packaging, and distribution…
- Farm workers and support service workers to include those who field crops; commodity inspection… and other agricultural inputs
- Employees and firms supporting food, feed, and beverage distribution…
- Workers in food testing labs in private industries and in institutions of higher education
- Employees engaged in the manufacture and maintenance of equipment and other infrastructure necessary to agricultural production and distribution
Hemp needs federal protection now
The hemp and CBD industries are clamoring for support from the federal government in this time of crisis. We are asking our Congressional leaders, including Senate Majority Leader Mitch McConnell, to include hemp in the next stimulus bill.
The hemp industry doesn’t need a cash bailout like the airline industry. We just need a regulatory bailout to cut the red tape that still exists between hemp companies and their customers.
A short list for regulatory changes that hemp companies need includes:
- The FDA allowing CBD as a supplement
- The FDA allowing CBD as a food additive
- The IRS allowing CBD to be purchased with funds from Health Savings Accounts
- The SAFE Banking Act passing through Congress to increase access to banking
- Assurances that CBD companies will be eligible for SBA loans and other disaster funds
What should be done?
Congress should grant hemp and CBD the regulatory bailout we are requesting. However, they might not need to because if the Defense Production Act is invoked, then the Congress of 1950 did the work for them because the DPA clearly includes “hemp” as a “food resource” vital to national security in a time of national emergency.
USDA Secretary Sonny Perdue needs to tell us what his office is prepared to do if the DPA is invoked.
This post mistakenly claimed that President Trump had already invoked the Defense Production Act of 1950. As of this update, he has not yet done so. This post has been edited to reflect that.
President Trump invoked the Defense Production Act narrowly to require General Motors to manufacture ventilators. He is already being called upon to expand his usage of the DPA to more than just ventilators.