The cannabis industry can be hazy for financial professionals. Add the legislative issues facing the U.S. federal and state governments, and it can become highly overwhelming. Let us start with a background recap to roll up the facts, so they are more easily digestible.
The terms cannabis, marijuana, and hemp are often mistakenly used interchangeably but are considerably different. Marijuana and hemp are both primary species of the cannabis plant, and cannabinoids (CBD) are derived from hemp. So, what’s the difference?
- Marijuana is used for both recreational and medical uses and has a 10-40% content of tetrahydrocannabinol (THC), the psychoactive component that gets the user high.
- Hemp, on the other hand, must have .3% or less THC not to be considered marijuana and is primarily used for industrial purposes, such as textiles, building materials, fuel, and plastics.
- The fastest growing global use of hemp is in THC-free CBD products, particularly oils and food/beverage infusions. Hemp or CBD does not get the user high.
Marijuana remains wholly illegal at the federal level as a Schedule 1 substance, ranking the plant at the same level as heroin and above cocaine and methamphetamine. However, this hasn’t stopped 33 states as well as Washington, D.C., Guam, Puerto Rico, the Northern Mariana Islands, and the U.S. Virgin Islands, from legalizing medical marijuana. It is legal in 10 of those states for recreational use and decriminalized in another 10 states.