Hemp industry is facing hurdles with new system
A new federal rule designed to build a regulatory framework for the surging hemp and CBD market is a critical step forward, industry representatives say, but some of their descriptions of the details range from concerning to “unworkable.”
At the end of October, the U.S. Department of Agriculture issued an interim rule laying out a series of regulations for producing hemp. The 2018 federal farm bill legalized hemp, which is in the cannabis family but has minute amounts of the highinducing chemical, THC, found in marijuana.
The interim rule took immediate effect but is open to public comments until Dec. 31 and could go through revisions before it’s finalized in about two years.
Some changes will have to be made, industry representatives agree.
A big concern is the rule’s timeline for farmers getting their plants tested to make sure they don’t exceed the maximum allowed level of THC — tetrahydrocannabinol. If the level exceeds 0.3%, the plants have to be disposed of under Drug Enforcement Administration regulations because the hemp would be considered a controlled substance.
The challenge is the rule requires that the plants be tested within 15 days before harvest begins. The USDA says if farmers delay harvest beyond 15 days, the plants will likely have a higher THC level than the sample.
But the 15 days aren’t much time to submit the plants and get the results needed to know whether it’s OK to go ahead and harvest the crop, said Michael Bowman, a cofounder of First Crop, a public benefit company working with hemp farmers.
“I would call it unworkable at this point,” Bowman said of the provision.
Bowman is a fifth-generation Colorado farmer who helped write the 2014 federal farm bill that allowed states to set up pilot hemp-production programs.
Meghana Shah is a co-leader of a team of attorneys in the New York office of Eversheds Sutherland who work on cannabis issues. She said the requirement that plants be tested by DEA-certified labs doesn’t take into consideration the availability of such facilities and personnel.
“There are a lot of sort of logistical and practical hurdles posed by the 15-day window with not a lot of answers. That is one of the areas where USDA sought comment, so I think we can expect to see it addressed during the comment period,” Shah added.
The 15-day turnaround time doesn’t take into consideration the growth that hemp operations are expected to experience, said Cameron Field, an attorney in the Austin, Texas, office of the Michael Best law firm.
Colorado, which established a pilot hemp program after the 2014 farm bill passed, gives farmers 30 days between testing and harvest. However, this fall, the state ended up collecting and testing most of the hemp samples in roughly 15 days, said Brian Koontz, the industrial hemp program manager for the Colorado Department of Agriculture.
“I think it can work. It’s going to be a challenge, though,” Koontz said.
The department might look into adding more laboratory support.
Colorado, which approved the recreational use of marijuana in 2012, was the first state to legalize hemp. It has been a leader in hemp cultivation and processing as well as the production of hemp products, including CBD — cannabidiol — which when extracted is used in pills, lotions and other over-the-counter products.
In 2014, people registered a total of 1,811 acres for outdoor hemp production and 250,000 square feet of indoor production. So far this year, 1,950 people or companies have registered 88,743 acres for outdoor production and 15.4 million square feet of indoor cultivation, according to the agriculture department.
Koontz said a new feature allows people to apply online to register hemp operations.
Under the latest farm bill, states can sub
mit their plans for regulating hemp production to the USDA or opt to let the federal government oversee the industry. Koontz said Colorado will likely submit its plan by the end of the year.
As people weigh in on the USDA requirements, industry experts say another issue they expect to come up is how THC is measured. The method detailed in the rule differs from how some states do it and could lead to artificially high results, said Greg Kaufman, an attorney with Eversheds Sutherland.
Despite the concerns, Kaufman said others said the rule moves the industry forward in important ways. They said it makes clear that the interstate transport of hemp is legal and no state can prohibit the shipment of legally produced hemp. An Oregon truck driver pleaded guilty to a misdemeanor in September after originally facing a felony charge for hauling a load of hemp through the state.
“I like to try to not lose sight of the goal, of where we’re going,” said Bowman of First Crop. “These interim steps are going to be imperfect. It’s important that we have a farmer-friendly, industry-friendly set of regulations that work. We’re not there yet, but we’ll get there.”