State of Hemp in the Nation: A Look at the USDA Hemp Regulations. 11.4.19

By Dylan C. Summers
Vice President of Government Affairs
Lazarus Naturals

After a long wait, we finally have the USDA program for Domestic Hemp Production. Below is the fast and short of it.

The Domestic Hemp Production Program is an interim final rule (IFR) meaning it is temporary and has a “sunset date.” Its sunset will occur two years after its publication in the public register which is officially October 31, 2019. In this two-year period, USDA will assess the practical application of their rules and make necessary adjustments to tie up loose ends for compliance considering the intentions of the 2018 Farm Bill while trying to ease burdens for the industry.

The rules will not be changed piece-meal along the way except initially after a 60-day public comment period. All changes to the rule will be addressed in final drafting for the final rulemaking process.

This rule outlines (1) provisions for the USDA to approve state and tribal plans and (2) procedures for a Federal plan for states and tribes which do not explicitly outlaw hemp cultivation and do not have a plan established to cultivate hemp.

States/Tribes may choose to (1) restrict hemp cultivation to a higher degree than federal mandate, (2) create a plan equal in compliance requirements to the federal plan, or (3) forego any direct regulation of hemp effectively deferring to the federal regulations.

States may not create plans more relaxed than the USDA’s final rule nor are they allowed to restrict interstate commerce of hemp.

Cultivators must adhere with their state or tribal plans first and foremost. If a cultivator is operating in a state which does not explicitly restrict but does not have a plan for hemp production, they may pursue licensure via the federal plan.

Cultivators may not pursue licensure for hemp production under any plan if they have been convicted of a felony involving controlled substances within the past 10 years.

Sampling and testing have been outlined in separate guideline documents. This is to avoid having to address sampling and testing in rule-making which would require legislative action as well as to enable the industry to stay up-to-date with innovative methods and technologies.

Sampling must be conducted no more than fifteen days before harvest. Samples will be comprised of leaves and flowering material from top 1/3 of plant. The rule does not specify any processes for homogenization nor an official definition of “flower.” Contiguous crops may be divided into lots according to how the producer sees fit in order to mitigate risks of crop failures.

Compliance testing will be conducted to verify plant material as containing no more than 0.3% total THC on a dry weight basis with a measurement of uncertainty. Such a range of uncertainty will be determined by the lab conducting analysis depending on procedures and methods. If a result is within a range of uncertainty which includes 0.3%, the crop is compliant. If higher, it fails. All labs with the intent to conduct hemp compliance testing will be required to obtain DEA registration.

These rules do not include language pertaining to hemp-derived CBD products. Such products remain under the purview of FDA, not USDA. USDA regulation of hemp stops at harvest of the commodity.

There will be no certified seed program due to variable conditions producing differing cannabinoid profiles especially. Basically, there is not enough data yet to support a certified seed program.

The publication of this rule opens the door to programs provided by Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS) and Risk Management Agency (RMA). This means hemp producers will have access to services available to other agricultural commodities such insurance and access to capital.

Loan programs to be made available to hemp producers via FSA include operating loans, ownership loans, beginner farmer loans and on-farm storage loans.

In order to be eligible for crop insurance coverage, a hemp producer must have a five-year history of income (three years if beginning farmers or military veterans) and they must have a contract for the purchase of the hemp to be grown i.e. a definite, contracted destination for the crop post-harvest. Non-compliant hemp (that which tests over 0.3% THC) will not be covered.