As of October 31, 2019, the USDA finally released an Interim Final Rule regarding the 2018 Farm Bill update further legalizing and standardizing the regulation of Hemp nationally. The document will remain an interim draft allowing comments until December 30, 2019 which supply the USDA with further information for their final publication which will be implemented at maximum two years from the date of this interim rule.
Hemp was previously defined by the 2014 Farm Bill as “Cannabis sativa L with only 0.3% THC potency on a dry weight basis,” which is how we have known it since. Research at higher education institutions, state departments of agriculture, and market research was permitted with the 2014 bill which led to consumer trials and releases of the wide-known term “CBD” gummies, oils, infused products, etc. With the assumption that hemp production would continue to grow and expand, the USDA released the 2018 Farm Bill as a follow up which removed hemp from the controlled substance list and left more flexibility for state and tribe programs.
The most beneficial result of decontrolling hemp is being able to transport and distribute it across state lines without penalty, which penalized many producers since 2014. The new interim regulations have clarified that producers may begin applying to produce hemp through the USDA program 30 days following the effective date of the rules (applications will be accepted starting November 30, 2019). In the meantime states and tribes are given the opportunity to implement programs in which producers would apply for a license through their specified state or tribe instead of USDA. This 30 day process time ensures producers won’t have to apply to both the USDA and their state, but just the closest overseeing program. Those that were permitted to cultivate under the 2014 bill have extended allowance to do so for the 2020 planting season (or for 12 months after the date of the 2018 bill).
The USDA stresses the utmost importance of the DEA required testing and sampling obligations to ensure potency. With cannabis still being on the controlled substance list, hemp must remain at the permitted potency level (0.3%) or within range of 0.3% with a measurement of uncertainty. The bill also discusses fluctuating potencies based on seed and agricultural location, so proper procedures and testing is very relevant to a hemp producer or someone looking to get into the industry.
With all this new information available, what should be taken away from the standardized hemp regulatory framework?
- Read through the regulations and take advantage of the USDA asking for comments, input, advice, and feedback. Since they are requesting feedback and some practices may be more reasonable by nature, it’s important to send information if you feel the bill has not met your production needs.
- Standardize your processes and procedures for testing. Since this testing result is what draws the line between a federally legal substance and a controlled substance drug, this is now the most vital piece of your business.
- Look out for what your state or tribe will propose (if anything). The USDA is offering to be the authority to oversee licenses, but are encouraging states and tribes to set up programs in place of that.
- Business and market data calculations and information. The USDA used a series of scenarios and calculations in the bill to address various aspects of the hemp industry, which can be a great tool for someone looking to get into the market.
For more information regarding applications, testing procedures, bill history, and reporting requirements visit the newly drafted interim regulations on the USDA’s website.