Post date: 11/14/2019

The U.S. Department of Agriculture is providing some long-awaited regulatory clarity on the production, distribution and sale of hemp products. It published an interim set of rules on October 31 that remains in effect until 2021, whereupon the rules are expected to be adopted in final form, with possible amendments.

According to industry observers, USDA was under pressure to publish the regulations to provide farmers time to prepare for the 2020 growing season.

Hemp had long been classified as a prohibited substance under the federal Controlled Substances Act, the same as marijuana and other cannabis plants. But that changed with enactment of the 2018 Farm Bill, which reclassified hemp as a commodity, not unlike corn and soybeans. The legislation doesn’t allow folks to grow hemp as freely as they do corn or soybeans, however. Rather it calls for regulatory structure around the cultivation, distribution and sale of hemp products. “This will be a highly regulated crop in the United States for both personal and industrial production,” the Brookings Institute noted in a report.

State agriculture departments are expected to implement their own regulations around hemp production in their jurisdictions. USDA’s regulations are intended to support interstate transport of hemp products, as well as to provide a uniform national framework for state regulations. In the event that states fail to implement hemp regulations for their jurisdictions, USDA’s rules apply.

“Once state and tribal plans are in place, hemp producers will be eligible for a number of USDA programs, including insurance coverage,” USDA said in a statement.

The Food and Drug Administration also has asserted regulatory jurisdiction over the use of CBD (derived from hemp as well as other cannabis plants) in food and beverages. It held preliminary hearings on the matter earlier this year, but has yet to publish any proposed regulations.

Publication of the USDA interim rules has been well received, generally. “The USDA interim rule is an important first step to ending uncertainty for farmers, and I now look forward to reviewing the rule and working with the USDA and FDA to ensure farmers in Oregon and nationwide can fully realize this crop’s economic job-creating potential,” said Senator Ron Wyden (D-OR), author of the hemp provisions in the 2018 Farm Bill.

“While these rules are not perfect, it’s undoubtedly progress and provides a framework for the next phase of the legal hemp industry,” said Shawn Hauser, Partner and Chair of the Hemp and Cannabinioids Practice Group at the law firm Vicente Sederberg LLP.

Hauser and her colleagues, in a published brief, highlighted some potential problems with the new regulations, including a requirement they likened to “a throwback to prohibition and reefer madness,” namely that all hemp testing labs must be registered with the federal Drug Enforcement Agency. “USDA is also considering adding a DEA approval requirement for labs testing hemp,” the brief noted. “Most testing labs currently testing hemp do not have a DEA registration.”

Another potential problem: testing samples must be collected by designated third-party samplers (e.g. approved labs or law enforcement agencies) within 15 days prior to harvest. “This will potentially require state departments of agriculture to stop sampling hemp crops unless they are included as authorized third parties,” the brief noted.

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