USDA Releases Interim Hemp Production Regulations

November 1, 2019Alerts

The United States Department of Agriculture recently released interim hemp production regulations that lay the groundwork for legal hemp cultivation. The interim regulations, outlined below, tackle state and federal hemp requirements, including licensing, interstate transportation and THC testing and sampling. These interim rules will become final after the USDA considers proposed revisions during a 60-day public comment period ending on December 30. States and tribes are now allowed to submit their own hemp farming regulation plans for review and approval by the USDA.

To the extent applicable, hemp farmers and businesses that deal with hemp cultivation should be prepared to comply with these federal standards as well as determine whether their jurisdictions intend to adjust or add any hemp production rules that may differ from the USDA’s.

Background

The Agriculture Improvement Act of 2018 (2018 Farm Bill) declassified “hemp” and "hemp-derived products" from the Controlled Substance Act (CSA) and opened the door for states to allow legal hemp cultivation and production. However, hemp farming had remained inconsistently regulated state-to-state given the lack of federal oversight in the area. The USDA’s interim regulations will regulate hemp production on a national scale, but will allow latitude for states to implement their own USDA-approved hemp production programs.

State Program Requirements

  • Pursuant to the 2018 Farm Bill, states and tribes can regulate hemp production within their jurisdiction if they submit a plan to the USDA and the Secretary of Agriculture approves it. 
  • Regulations do not preempt state or tribe laws and allow each jurisdiction to apply more restrictive regulations than the USDA. 
  • USDA regulations provide minimum requirements for the state and tribe plans. To be considered for approval, state and tribe plans must contain the following rules:
    • Licensing requirements;
    • Data collection and information about the land on which hemp is produced;
    • Procedures for testing the THC concentration levels of hemp;
    • Procedures for disposing of noncompliant plants;
    • Compliance provisions; and
    • Procedures for handling violations.

Licensing Requirements

  • If a state or tribe does not obtain USDA approval for their plan, prospective hemp producers in those jurisdictions must apply for a hemp production license through the USDA. Otherwise, prospective hemp producers must apply for a hemp production license with the state or tribal authority that has a USDA-approved hemp production plan. 
  • The USDA will begin accepting license applications 30 days after the effective date of these regulations.
    • For the first year, license applications can be submitted any time.
    • For all subsequent years, license applications and renewals must be submitted between August 1 and October 31.
  • Hemp licenses issued through the USDA will be valid for three years and do not automatically renew.

License Transfers

  • USDA regulations state that hemp producer licenses are strictly nontransferable. 
  • A license modification is required when the licensed business is sold to a new owner or when hemp is produced in a new location not described on the original application. In essence, the USDA will allow ownership transfers and allow a licensed hemp producer to grow in new locations without applying for a new license.

Interstate Transportation

  • USDA regulations expressly state that no state or tribe may prohibit the interstate transportation or shipment of hemp produced in accordance with their regulations, the 2014 Farm Bill or any approved state or tribe plan.

THC Testing and Sampling

  • THC testing and sampling of hemp crops must occur within 15 days before harvest.
  • Sampling must be performed by a USDA-approved sampling agent, or a federal, state or local law enforcement agent authorized by the USDA.
  • THC testing must be performed by a laboratory registered with the Drug Enforcement Agency (DEA) to handle controlled substances under CSA and DEA regulations.
    • An additional USDA requirement under consideration would have laboratories obtain ISO 17025 certification, as well as comply with the policies and procedures of the “Laboratory Approval Program” administered by the Laboratory Approval Service.
  • Regulations provide for certain post-decarboxylation methods of testing to account for the potential conversion of THCA into THC.
  • A “Measure of Uncertainty” calculation will be applied to the THC testing results to determine the “Acceptable hemp THC level,” which is the standard for determining THC concentration compliance.
  • Interim regulations do not address testing hemp crop for pesticides or insecticides.

For any questions about this alert or the USDA’s interim hemp production regulations, please contact Jared Schwass at 415.651.1487 or [email protected], Jesse Harris at 215.299.2864 or [email protected], or any member of Fox Rothschild’s Cannabis Law Practice Group.