USDA Establishes Domestic Hemp Production Program

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November 19, 2019 - Patricia Iscaro

The U.S. Department of Agriculture (USDA) established on 31 October 2019 a new interim rule providing the requirements to facilitate and expand the production and sale of hemp. This rule is effective upon publication through 1 November 2021. Comments will be accepted until 30 December 2019.

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As mandated by the Agriculture Improvement Act of 2018 (2018 Farm Bill) which amended the Agricultural Marketing Act of 1946, the new interim rule contains provisions for the USDA to approve plans submitted by the States (and the District of Columbia) and Native American tribes for the domestic production of hemp. For producers in those jurisdictions that do not have their own USDA-approved plan, a federal plan is established with which these jurisdictions must comply.

The program includes provisions for maintaining information on land where hemp is produced, which will include a legal description of the land and geospatial location of each field, greenhouse or other site where hemp is produced. The USDA Farm Service Agency (FSA) can help provide this required information since many rural locations don't have specific street addresses. Hemp crop acreage must also be submitted to the FSA, which provides information on how to report hemp crop acreage.

Producers will be required to test concentration levels of delta-9 tetrahydrocannabinol (THC). Within 15 days prior to the anticipated harvest of cannabis plants a federal, state, local, or tribal law enforcement agency or designated person shall collect samples from the flower material from the cannabis plant for delta-9 THC concentrations levels. A delay in harvest beyond the 15 days will usually result in higher THC levels. Sampling procedures, among other requirements, must ensure that a representative sample of the hemp production is physically collected and delivered to a Drug Enforcement Agency (DEA) registered laboratory for testing. The interim rule contains additional sampling and testing detail, as well as the requirements for registered laboratories for testing. The acceptable THC level is 0.3% on a dry weight basis.

Procedures for handling violations are also delineated by the interim rule. Handling includes cultivating or storing hemp plants and/or hemp plant parts prior to the delivery of such plant or plant part for further processing. In cases where cannabis plants exceed the acceptable hemp THC level, handling may also refer to the disposal of those plants. Cannabis exceeding the acceptable hemp THC level must be disposed of in accordance with the Controlled Substances Act (CSA) and DEA regulations because such material constitutes marijuana, a Schedule I controlled substance under the CSA. This disposal must be documented.

Additional provisions include:

  • Compliance with enforcement procedures including annual inspection of hemp producers
  • Information sharing for reporting specific information to USDA
  • Certification of resources
  • Plan approval, technical assistance, and USDA oversight

The USDA will begin accepting applications for licenses to produce hemp on 30 November in order to give states and tribes time to submit plans for their jurisdictions.

In crop year 2020, hemp producers may be eligible for FSA farm loans, such as operating, ownership, beginning farmer and farm storage facility loans. In addition, producers will be eligible for insurance coverage of all revenue for commodities produced up to $8.5 million

Background

According to the 2018 Farm Bill, "hemp" means "the plant Cannabis sativa L. and any part of that plant including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis."

The farm bill removed hemp from the Controlled Substances Act which falls under the jurisdiction of the Drug Enforcement Agency. The USDA regulates the production of hemp while the U.S. Food and Drug Administration (FDA) maintains its authority to regulate products containing cannabis or cannabis-derived compounds under Section301(II) of the Federal Food, Drug and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act (42 U.S.C. 262).

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Hemp producers in states and territories of Native American tribes that allow for hemp production will be impacted by this rule. State departments of agriculture and tribal governments will also be affected by this rule, which is effective 31 October 2019 through 1 November 2021.

Comments may be submitted electronically, by fax (202) 720-8938 or by mail to: Docket Clerk, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington,DC 20250–0237. Docket No. AMS–SC–19–0042; SC19–990–2 IR should be referenced in all correspondence.

Comments received by 30 December 2019 will be considered prior to issuance of a final rule.

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