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An $867 billion farm bill that is expected to pass in Congress this week will fund food stamps, crop subsidies and—to the glee of many stock promoters—legalize industrial hemp, a source of the popular ingredient cannabidiol, or CBD. Brace yourself for CBD-infused drinks, foods, cosmetics and stocks.

The most significant impact of the farm bill will be its funding of 10 more years of food stamps and farm subsidies. But hitching a ride on the farm bill wagon are provisions that decriminalize hemp. Technically speaking, hemp has been a controlled substance under federal law and could only be grown with a license under certain state research programs. The new farm bill will allow hemp cultivation without a license in every state.

Hemp has lots of CBD, but little of the buzzy ingredient known as THC that makes the plant’s cousin marijuana so popular at parties. In fact, the main difference between the two plants is their respective levels of CBD and THC. Marijuana will remain illegal under federal law, regardless of its legality under local law in dozens of states.

As a chemical, CBD is considered “non-psychoactive,” but it has soothing properties that led the U.S. Food & Drug Administration in June to approve a CBD-containing prescription drug from GW Pharmaceuticals (GWPH) for treating two rare seizure disorders that can be life-threatening in infants.

Products with a little bit of CBD as a “food additive” have been available for a while from small outfits such as the yet-unprofitable New Age Beverages (NBEV). With the farm bill assuring the federal legality of hemp production and distribution, big firms may now start putting CBD as a “functional” additive in drinks—along the lines of Coca-Cola’s Vitaminwater.

Canadian cannabis leaders such as Aurora Cannabis (ACB) have long harbored hemp ambitions, and beverage giants such as Coca-Cola (KO) and PepsiCo (PEP) may finally make their long-rumored entries into the CBD-drink space. Cannaccord Genuity analyst Bobby Burleson estimates that CBD-infused beverages could become a $260 million market by 2022.

Fans of CBD have also touted the stuff as a panacea for anxiety, pain, inflammation, and even cancer. Another benefit of the farm bill’s passage should be an increase in the scientific testing of cures claimed for CBD and the hundred-odd other cannabinoids in hemp and cannabis. In the past few years, the FDA has sent warning letters to marketers of CBD-based products that the agency said were making unapproved drug claims, or which didn’t contain the levels of CBD advertised. In a 2017 study published in the Journal of the American Medical Association, researchers analyzed CBD products from 31 companies and found that 70% didn’t contain the labeled amounts of CBD.

One of the recipients of an October 2017 warning letter from the FDA was a Boulder, Colo., company that is one of the rare cannabis or hemp businesses that makes a profit. Charlotte’s Web Holdings came public this year on the Canadian Securities Exchange and sells CBD-rich oils in 3,000 retail locations. It earned $9 million, or 10 cents a share, on revenue of $48 million in the nine months ended September 2018.

The FDA’s October 2017 warning letter scolded Charlotte’s Web for its website, where visitors at the time could find discussions of CBD as a treatment for Alzheimer’s disease, breast cancer and diabetes. The agency argued that Charlotte’s Web was obliged to test its product as a drug. In recent investor presentations, Charlotte’s Web says that it disagrees, but “is still in active discussion with the FDA” and has yet to resolve the agency’s concerns.

On the CSE, shares of Charlotte’s Web (CWEB.Canada) have climbed nearly 50% in the past week, to a current price of 16 Canadian dollars apiece. The company and other marketers of hemp-derived CBD think the farm bill will lift a cloud from their industry. The bill’s passage will be “a catalyst for growth,” Charlotte’s Web CEO Hess Moallem said in his company’s recent earnings release.

“We have contributed to and support this important legislation from the beginning,” said Moallem, “for the positive impact it will have on consumer access.”

Write to Bill Alpert at william.alpert@barrons.com