Update: 5:45 p.m.
The measure, co-authored as well by Rep. Thomas Massie (R-Ky.) and Earl Blumenauer (D-Ore.), would permit colleges, universities and state agriculture agencies to grow and experiment on the crop with impunity in states that have legalized industrial hemp. The House passed the five-year, $500 billion farm bill with a vote of 251 to 166.
On Tuesday, the Senate voted 68 to 32 to pass the bill, with hefty support from Oregon Democrats Ron Wyden and Jeff Merkley and from Kentucky Republicans Rand Paul and Mitch McConnell. President Barack Obama is expected to sign it into law over the next few days.
"The farm bill, if passed, could prove to be one of the most exciting moves Congress makes this year, with big benefits for our economy, medical patients and businesses," said Alan Brochstein, founder of 420 Investor, a pot stock subscription service.
Consider this a particular boon for states where industrial hemp cultivation is legal: Colorado, Oregon, California, Kentucky, Vermont, Montana, West Virginia, North Dakota and Maine. Hemp cultivation is still federally illegal, but the farm bill would prevent feds from actively pursuing farmers and researchers growing it.
Colorado State University could become a hub for hemp development and advancement, Colorado Congressman Polis said, without having to fear being stripped of grant money. Northern Colorado on the whole could be a center of domestic industrial hemp production.
Industrial hemp, which only has a modest amount of the narcotic tetrahydrocannabinol (THC) found in marijuana, is used in products like rope, clothes and auto parts. Because of the legal strictures surrounding the plant, the hemp used in U.S. products comes from abroadnamely Canada and Turkey.
The ability to cultivate hemp in an uninhibited fashion would allow Colorado, for one, to develop innovative uses for the plant including use in hemp pharmaceuticals.
The farm bill would help the marijuana companies lower the cost of importing hemp, which can be used for medical marijuana, with high cannabidiol (CBD) and low THC.
"Lower input costs will be a boon for several private and publicly-traded companies, including Terra Tech (TRTC), which has a facility in New Jersey that is currently producing hydroponic produce, as well as some other companies that are looking to expand into the nutraceutical market with CBD-based supplements," said Brochstein of 420 Investor.
Sure enough, today Terra Tech, through its subsidiary GrowOp Technology, announced its strategic partnership with nutritional supplement developer Inergetics, Inc. (NRTI) to create a line of natural cannibidiol-based nutritional supplements.
"Currently hemp is defined by it's THC content, not by CBD, so it is possible that this bill could open the door to CBD research at colleges and universities, something we're confident would further speed up the progress of medical marijuana and legalization," Terra Tech CEO Derek Peterson told MainStreet.
At midday, Hemp Inc. (HEMP) shares were up 50% over Monday's close, and TRTC and GW Pharmaceuticals (GWPH) were up 3.75% and 4.48%, respectively.
"I think marijuana stocks will continue to react well to news that comes out of Congress, the President, and state and local leaders--the farm bill included," Peterson said. "Progress on marijuana legalization has been remarkable, with major news nearly every week, and investors are paying close attention."
Of course, caveat emptor: it's not a high point for everybody.
CannaVest (CANV) has been ahead of the curve in developing an extensive and elaborate mechanism for importing and reconstituting hemp paste for cannabidiol (CBD). That innovation may be superfluous if the legislation comes to fruition.
--Written by Ross Kenneth Urken for MainStreet