January 15, 2021
USDA has issued its final rule for the domestic production of hemp in the waning days of the Trump administration.
The 301-page document is scheduled to be published Jan. 19 in the Federal Register.
USDA issued the final rule after receiving around 5,900 comments regarding an interim final rule (IFR) published in 2019. The final rule will become effective, superseding the IFR, 60 days after publication in the Federal Register.
“With the publication of this final rule, USDA brings to a close a full and transparent rule-making process that started with a hemp listening session in March 2019,” USDA Marketing and Regulatory Programs Under Secretary Greg Ibach said Friday in a news release. “USDA staff have taken the information you have provided through three comment periods and from your experiences over a growing season to develop regulations that meet Congressional intent while providing a fair, consistent, science-based process for states, tribes and individual producers. USDA staff will continue to conduct education and outreach to help industry achieve compliance with the requirements.”
The rule includes regulations used by USDA to approve plans submitted by states and Indian tribes for domestic hemp production, as well as regulations for producers in states or territories of Indian tribes that don't have their own USDA-approved plans.
The domestic hemp production "program provides requirements for maintaining records about the land where hemp is produced, testing the levels of total delta-9 tetrahydrocannabinol, disposing of non-compliant plants, licensing hemp producers and ensuring compliance under the new program," USDA explained in the final rule.
USDA also intends to release new guidance materials on sampling, testing and disposal/remediation. The information will available on USDA's Hemp Program website.
Lawyers react to final rule
Many stakeholders were reviewing the massive rule Friday.
Washington, D.C.-based attorney Jessica Wasserman, a partner with WassermanRowe, a trade law and consulting firm, said the final rule reflected "a number of positive changes making hemp farming more sustainable."
Among some of the changes in the final rule:
USDA has delayed until December 31, 2022 enforcement of a requirement that hemp testing laboratories be registered with the DEA.
USDA requires harvesting within 30 days of sampling, up from a 15-day requirement in the IFR.
"Under this final rule," USDA stated, "no more than 30 days prior to the anticipated harvest of cannabis plants, a 'sampling agent' must collect samples for compliance testing."
The rule increases the negligence threshold from 0.5% to 1% THC and clarifies how states and Indian tribes determine when to suspend or revoke a producer's license.
Garrett Graff, managing partner in Denver at Hoban Law Group, a law firm focused on cannabis issues, said USDA’s final rule is a mixed bag.
For example, he pointed out the change in the negligence standard should offer relief to farmers concerned about their crops going “hot” due to environmental factors outside their control. Under the final rule, THC as high as 1% will not be deemed a negligent violation so long as they "use reasonable efforts to grow hemp."
On the other hand, Graff is concerned about DEA’s continued involvement under USDA’s final rule.
“Much of the hemp industry would simply prefer for DEA to butt out altogether from any sort of regulation or authority over hemp,” the lawyer said. DEA’s involvement, alongside USDA and FDA, he added, “further clouds … who oversees what and who has what jurisdiction."
Another Denver-based attorney, Shawn Hauser, acknowledged concerns over DEA's involvement in the hemp program, but she said the final rule also featured improvements.
"The expanded harvest window, alternative disposal/remediation authorizations, and increase of the standard of negligence to 1% will be critical to building a successful hemp industry, and they indicate the USDA gave meaningful consideration to stakeholders' comments," Hauser, partner and chair of the Hemp and Cannabinoids Department at Vicente Sederberg LLP, said in a statement. "We are undoubtedly making progress, and we will continue to work with regulators and through Congress to perfect the regulatory structure for hemp.”
Advocacy group calls rule 'significant improvement'
In an email to its stakeholders Friday, the U.S. Hemp Roundtable noted it was continuing to review the 301-page document.
The advocacy organization described the final rule as a "significant improvement" over the IFR, "particularly when it comes to providing more flexibility for farmers to avoid destruction of their crops due to unintended THC spikes.
"However, the rule is not perfect, as the USDA did not fulfill some of the industry’s key requests," the U.S. Hemp Roundtable cautioned. "The good news is that a new Biden Administration takes over on January 20, with a strong hemp supporter in USDA Secretary-Designate Tom Vilsack. We will continue to press the agency for more support when it comes to protecting hemp farmers and the hemp industry."
Among the changes to the final rule highlighted by the U.S. Hemp Roundtable:
"Instead of rigid requirements for sampling being mandated from the federal level, the final rule establishes 'performance-based' sampling requirements, giving states the flexibility to achieve performance objectives, such as a reliability of 95%.
The final rule continues to require pre-harvest samples to be taken from the flower material – not the whole plant as many requested -- but it provides some relief by requiring the samples to be taken from 5 to 8 inches from the main stem, terminal bud, or central cola of the flowering top.
The USDA retains its requirement for testing total THC, instead of limiting the testing to delta-9 THC as requested by some in the industry.
The more flexible disposal options that the USDA proposed last year – including on-farm or at-production disposal flexibility – have been made permanent."
Geoff Whaling, chairman of the board of directors of the National Hemp Association, said the rule should offer comfort to farmers who are especially interested in growing hemp for fiber and grain/seed. While some people may feel the rule did not satisfactorily address all the issues raised by stakeholders, Whaling said that doesn't mean USDA doesn't want to foster growth of the hemp industry.
Rather, "it is more reflective that their [USDA officials'] hands are tied as those issues are not within their role," he said in an email. "Those matters, such as those wanting a higher THC level, will require legislative fixes. NHA will continue to work with Congress on those issues."
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