Cannabis
President Donald Trump has legalized hemp, a form of cannabis, in the farm bill 2018. In Picture: A bud is seen on a mature marijuana plant that is displayed at The International Cannabis and Hemp Expo April 18, 2010 at the Cow Palace in Daly City, California. Getty Images/Justin Sullivan

President Donald Trump has legalized hemp, a form of cannabis, in the Farm Bill 2018. This step opens the door for companies that are keen to invest in this sector, which has a huge potential in the future. The agricultural sector that has been struggling should also benefit from this move.

Why is hemp so important? According to Market Watch, this form of cannabis does not produce the “psychoactive component” of marijuana. Cannabidiol, or CBD, is a “non-psychoactive compound” that is already being used in multiple products like beverages, snacks and health products.

The Farm Bill 2018 stipulates that industrial hemp will be under the purview of the Agriculture Department, and it will no longer be under the list of products under the Controlled Substances Act. Industrial hemp is a cannabis plant that has less than 0.3 percent tetrahydrocannabinol, or THC. The new law also makes it clear that the Food and Drugs Administration (FDA) will not be allowed to regulate cannabis products or products that contain cannabis-derived compounds.

Some of the hemp ingredients that FDA has approved for use, and which don’t need additional approval, are hemp seeds, hemp seed oil and hemp seed protein. The problem at the moment for companies is that the FDA still considers cannabidiol to be a drug, so they will need to seek the agency’s approval before adding it to food or health products.

Cannabis is a hugely debated topic. It is still illegal in the U.S., but some of the states have approved it’s use for either medical or recreational purposes.

While it is unclear how the new law and the regulation Agriculture Department will impact the cannabis market, companies are already keen on this multi-billion dollar industry. According to a report by New Cannabis Adventures, a Chicago-based private funds company is already working to help raise funds for American cannabis companies.

Granite Hall Partners is developing alternative investment products. As a part of this approach, Granite Hall has already invested in five cannabis companies. The company is taking advantage of cannabis being illegal at the moment, which means that many of the companies in this space are undervalued. The investors are expected to reap huge returns when the substance is legalized.

The legalization debate is not restricted to the U.S. According to a report by the Daily Hampshire Gazette, the Constitutional Court of South Africa has upheld the decision to allow the private cultivation and use of cannabis. It is now up to the parliament to frame guidelines on the issue, and the hope is that the new law will also legalize local trade of pot.