The Difference Between CBD Registration and Hemp Licensing
CBD businesses often encounter two regulatory terms that look similar but function very differently: CBD registration and hemp licensing. Each applies at a separate stage of the supply chain, involves different authorities, and carries its own compliance obligations. Understanding the distinction helps companies avoid regulatory mistakes and operate legally in a rapidly shifting marketplace.
How federal law divides hemp and CBD
The 2018 Farm Bill legalized hemp containing no more than 0.3% delta-9 THC and created a national framework for hemp production. Anyone growing hemp must obtain a license through a state, tribal, or USDA hemp program. These licenses require land documentation, background checks, THC sampling, and harvest reporting.
CBD is treated differently. Although it can be derived from legally grown hemp, the FDA has not approved CBD for use in foods or dietary supplements, leaving states to regulate the retail CBD market. This separation is what gives rise to state-level CBD registration requirements.
What CBD registration covers
CBD registration typically applies to finished products and the retailers selling them. States use registration to ensure products meet safety, labeling, and testing standards.
Some states require companies to register each CBD product before it can be sold. This often includes submitting Certificates of Analysis, ingredient lists, cannabinoid profiles, and labels for review. Improperly labeled products may be considered misbranded and removed from the market.
Other states require retailers—both physical stores and online sellers—to obtain a specific CBD or cannabinoid hemp retail license. This allows regulators to track what is being sold and confirm that all products meet state testing requirements.
Overall, CBD registration focuses on the consumer side of the industry: verifying that products are safe, accurately labeled, and legally allowed on store shelves.
What hemp licensing regulates
Hemp licensing governs the cultivation and early processing of the plant itself. Farmers must secure a hemp license before planting, and many states require separate processing licenses for extraction or manufacturing activities.
These licenses involve THC testing protocols, site inspections, and strict reporting. If plants exceed the 0.3% THC limit, growers may face corrective actions or mandatory crop destruction. Hemp licensing exists to ensure that cultivation stays within federal legal parameters and that raw material entering the market originates from compliant sources.
Key distinctions
Although related, the two systems address different compliance concerns:
- Hemp licensing manages plant production—who can grow or process hemp, where it is grown, and whether it meets legal THC limits.
- CBD registration governs finished products—how they are tested, labeled, and sold to consumers.
A vertically integrated company may need both a hemp license for cultivation and CBD registration for the products it puts on the market.
Why it matters for businesses
Confusing the two can lead to significant compliance gaps. Hemp licensing alone does not authorize the sale of CBD products, and CBD registration does not permit hemp cultivation. Treating these requirements as distinct but connected ensures that businesses remain compliant from seed to shelf, reducing regulatory risk and supporting long-term market stability.
This article is for informational purposes only and is not legal advice.