Civilizations have used hemp for centuries to produce a variety of goods including paper, cloth, and rope. Hemp is the same species of plant as marijuana, just a different cultivated variety of it. As a result, following the criminalization of marijuana, hemp cultivation faded in the United States. In fact, the Controlled Substance Act of 1970 included hemp within the definition of “marihuana,” effectively outlawing the production of hemp without a Drug Enforcement Agency (DEA) permit.
Beginning in the 1990s, the Hemp Industries Association and other related groups began advocating for the legalization of industrial hemp production. This decades-long advocacy culminated in the passage of a provision within the 2018 Farm Bill that directs the U.S. Department of Agriculture (USDA) to develop a program to regulate industrial hemp production. States may develop alternative programs, but only if they are approved by USDA.
Following passage of the farm bill, USDA published an interim final rule this past October that established rules for domestic hemp production.
Under these guidelines, a plant is classified as a hemp plant if its dry weight does not exceed 0.3 percent of delta-9 tetrahydrocannabinol (THC), the psychoactive component of marijuana. If the plant exceeds that 0.3 percent threshold, it is considered a marijuana plant, and it remains illegal to grow it under federal law.
A state seeking to have primary regulatory authority over hemp production is required to provide a plan to USDA that includes how it will collect information on hemp production sites and what methods the state will use for sampling and testing THC. The plan must also include how it will manage the disposal of noncompliant plants, compliance mechanisms, information sharing programs, and certification processes.
With its recent interim rule, USDA has essentially outlined its own plan for how it will regulate this industry.
USDA has started accepting applications for hemp producer licenses. USDA, however, will not grant a hemp production license to any producer in a state that has applied for, or already been approved for, its own regulatory program. After 2020, USDA will only accept applications for new hemp production licenses between August and October of any given year.
A potential licensee is required to provide a variety of information including a criminal background check of any “key participant” in production, such as the company’s chief executive officer. Licenses are not transferrable, and any person with a state or federal felony conviction related to a controlled substance is ineligible to obtain a license under this program.
THC sampling may be done by a USDA sampling agent or a law enforcement officer that has been authorized by USDA to collect such samples. The exact methodologies that will be employed by USDA representatives are based on various scientific studies and the United Nation’s recommendations for testing cannabis. The labs used to test the plants, however, must be approved by the DEA.
If the plant contains over 0.3 percent THC, the entire lot represented by the tested plant must be disposed of following DEA regulations since those plants are legally considered marijuana, not hemp. Once disposed of, the producer must supply USDA with a report to be cataloged by the agency. Furthermore, any hemp grown outside of licensed property or grown by a non-licensed producer will be disposed of under the same procedures.
USDA will conduct an audit of each licensed hemp producer no more than every three years. If the agency finds a “negligent violation,” a corrective action plan will be implemented. A negligent violation includes actions such as growing plants that contain high quantities of THC or failing to obtain a license. A corrective action plan will require the producer to remediate the violation and also periodically report to USDA on compliance status. A negligent violation may also lead to the suspension or revocation of a producer’s license.
USDA’s Farm Service Agency will manage the recordkeeping under this program. Producers must submit an array of information concerning each location where hemp will be grown and keep separate records related to compliance with the program. USDA also maintains a database of all domestic hemp producers to share information with federal, state, local, and tribal law enforcement.
Under the rule, however, the export of hemp remains prohibited. But if enough interest arises, USDA has expressed a readiness to establish a program to enable this process.
The public comment period for this interim final rule ends January 29, 2020.