On March 13, 2019, the U.S. Department of Agriculture (“USDA”) conducted a listening session to solicit comments from interested parties to aid in the drafting of rules that implement sections of the 2018 Farm Bill (Public Law No. 115-334) that pertain to industrial hemp cultivation.
At the beginning of the listening session, members of the USDA stated that they anticipate that proposed regulations for industrial hemp will be available in Fall 2019 to accommodate the 2020 growing season. They acknowledged that state and tribal industrial hemp regulatory plans will not be reviewed until after the regulations are finalized, but that USDA is committed to reviewing and approving plans within 60 days of their submission as required by the 2018 Farm Bill.
The majority of the commentators during the listening session were representatives of state and tribal agricultural authorities, while a smaller number of agricultural consultants and trade representatives also provided feedback to USDA. The topics upon which the commentators spoke coalesced into some common themes: the regulatory timetable, consistent sampling and testing, transportation protocols, federal interagency cooperation, equal treatment of industrial hemp under federal programs, and education of state and local law enforcement with respect to industrial hemp’s legal status versus cannabis’s continued Schedule I status.
Even though USDA indicated that it intends to release proposed regulations in Fall 2019, several commentators implored the USDA to implement emergency rules as soon as possible, especially with respect to clarifying industrial hemp’s legality for state and local law enforcement agencies and for crop insurance and banking purposes. Such emergency rules would ideally prevent impoundment of industrial hemp by state and local law enforcement officials while moving in interstate commerce and would allow licensed industrial hemp cultivators in states where hemp cultivation has been legal to classify their receipts for industrial hemp as income on their balance sheets for crop insurance and banking purposes.
Consistent sampling and testing
Commentators noted that geographic and seasonal differences between industrial hemp cultivators will result in wide variances in industrial hemp THC levels, the acceptable level for which is 0.3% by dry weight according to the 2018 Farm Bill. Many commentators asked USDA to consider various methods to harmonize conflicting state sampling and testing standards to give industrial hemp cultivators a consistent sampling and testing regime with which to adhere.
Nearly every commentator asked USDA to adopt a transportation protocol for cultivators and distributors to follow when transporting industrial hemp across state lines. Currently, only a patchwork of state regulations pertaining to moving industrial hemp across their borders exists, resulting in skyrocketing compliance costs for cultivators and distributors.
Federal interagency cooperation
Most commentators requested that USDA work cooperatively with the federal Drug Enforcement Agency and the federal Food and Drug Administration in implementing the 2018 Farm Bill, including the DEA’s role in authorizing import and export licenses for hemp seeds. Commentators asked USDA to work with the DEA to ensure that imports and exports of hemp seeds will not be unduly restricted given the similarity of hemp seeds to cannabis seeds. Commentators also want USDA to assist the FDA in verifying and validating nutritional product and medicinal plant claims for hemp and hemp products, such as CBD oil.
Industrial hemp under federal programs
Commentators expressed concern that industrial hemp would be unfairly treated when it comes to access to market research, tax credits, and agricultural grants by the USDA Agricultural Marketing Service and to crop insurance and banking. They asked USDA to ensure that industrial hemp is treated in the same fashion as other commodity crops with respect to these programs.
State and local law enforcement
Even though the plain language of §10114 of the 2018 Farm Bill enjoins state and tribal governments from prohibiting the transportation or shipment of industrial hemp and hemp products through their border, commentators expressed dismay that law enforcement officials in a few states continue to impound industrial hemp and penalize distributors who move industrial hemp across state lines. The commentators asked USDA to help educate state and local law enforcement officials in the difference between industrial hemp and cannabis in order to ensure that interstate industrial hemp distribution that complies with the federal regulatory framework proceeds without disruption by law enforcement agencies.
Spenser Owens is a member of Thompson Coburn’s Real Estate practice group.