Hemp comes from the same cannabis plant that produces marijuana. However, marijuana has both cannabidiol (CBD)—a medical compound that has health benefits but won’t induce a high—and tetrahydrocannabinol (THC), the chemical in the plant that is psychoactive and can give off a high.

Hemp, on the other hand, is produced with nearly 100% CBD. According to the new federal law, hemp is legal as long as it contains no more than 0.3% THC. Anything more than that and it’s illegal under the federal ban on marijuana.

The move to legalize hemp—something activists have advocated for years and Republican Senate Majority Leader Mitch McConnell heavily pushed to benefit farmers in his home state of Kentucky—paves the way for researchers and medical professionals to investigate how it could be used for medicinal treatment. Hemp can also be used as a material in a variety of other products, including clothing and nutritional supplements.

Many marijuana supporters believe the hemp legalization is an important first step in legalizing marijuana at a federal level. Dozens of states have already legalized medical marijuana and some, including Massachusetts and California, have legalized it for recreational use. Still, marijuana is federally illegal, making it difficult for companies to find banks and certain vendors from servicing their businesses.

Looking ahead, many companies and government organizations are planning to boost their research into and work with hemp. The FDA said in a statement that it will heavily regulate hemp-based products and will quickly prosecute those who run afoul of the THC requirement.