New Age Beverages Is An Early Winner From The Pending Farm Bill

New Age Beverages Corp NBEV shares were trading up again Wednesday on the back of the Senate vote on the 2018 Farm Bill. The news lifted other hemp and CBD companies higher, including Youngevity International Inc YGYI and Pyxus International Inc PYX.

New Age shares were trading up 8.27 percent to $5.89 at the time of publication Wednesday. 

What Happened

On Tuesday, the Farm Bill Conference Committee presented the final version of the bill after months of negotiations. It includes a number of compromises concerning the food stamps program, safety nets for farmers and other issues.

One major highlight of the bill is the legalization of hemp and its removal from Schedule 1 of the Controlled Substances Act. Essentially, the bill makes hemp and hemp-derived CBD legal on a federal level.

Later Tuesday, the U.S. Senate voted in favor of the Farm Bill. The House also voted in favor on Wednesday. After that, the bill will go to President Donald Trump's desk; he's already expressed his support for the legislation. 

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Why It's Important

The legalization of hemp would open up many economic opportunities.

Farmers will be able to cultivate a new crop and obtain crop insurance under the provisions of the farm bill. Moreover, manufacturers of CBD products such as New Age Beverages and Youngevity — as well as some cannabis companies that have operations focused on hemp and hemp-derived CBD — will be able to legally transport their products across state lines and even explore import and export opportunities. 

When it comes to many food items and dietary supplements that contain CBD, the FDA may take a tougher approach. Since CBD was investigated as a component in a drug, the FDA considers it illegal to add it the substance as an ingredient in food or supplements.

Yet there is no specific law concerning CBD. Experts believe the FDA is likely to stay on the sidelines and not interfere with manufacturers of CBD products such as beverages. 

Related Links:

The 2018 Farm Bill Vote: What You Need To Know

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