USDA Releases Draft Hemp Rules

On October 29th the United States Department of Agriculture (“USDA”) released draft rules for hemp manufacturing and the state regulatory programs that oversee the industry with a press release. These rules will become effective when published in the Federal Register on Thursday, upon which a 60-day public comment period shall begin. At 161 pages long, the draft rules cover testing protocols, where hemp can be grown, how product should be disposed of, licensing procedures, and other requirements such as providing GPS coordinates. The USDA released sampling and testing procedures concurrently with the draft rules.

USDA Secretary Sonny Perdue said in a tweet, “At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets.” The industry has waited for these rules ever since the passage of the 2018 Farm Bill that legalized hemp nearly a year ago, and the rules finally provide specifics on how the USDA and states will regulate hemp.

More information on USDA hemp rulemaking can be found here.

While we haven’t yet reviewed the entire document, some interesting points in the draft rules include:

• Samples shall be collected within 15 days of the anticipated harvest. The rules point out that delaying could affect the concentration of delta-9 tetrahydrocannabinol (“THC”). It will be interesting to see whether states will actually comply with this, and whether there will be repercussions for states or licensees if not. We know that the Washington State Department of Agriculture (“WSDA”) requests 30 days’ notice before they test a crop, but has struggled to make timing commitments, leaving licensees with delayed testing and delayed harvests.
• The rules provide that sampling must “be sufficient at a confidence level of 95 percent that no more than one percent (1%) of the plants in the lot would exceed the acceptable hemp THC level.”
• “Acceptable hemp THC level” means that the rules allow for a certain amount of uncertainty in the testing, such that a crop may fall under the 0.3% limit and still qualify as hemp even if it tests above 0.3%. The rules state, “For example, if the reported [THC] content concentration level on a dry weight basis is 0.35% and the measurement of uncertainty is +/- 0.06%, the measured [THC] content concentration level on a dry weight basis for this sample ranges from 0.29% to 0.41%.”
• The USDA is considering establishing hemp laboratory approval processes.
• If tested plants exceed the 0.3% acceptable limit, then legally it is marijuana and not hemp. As a result, it is a Schedule I drug and it must be collected for destruction by a person authorized under the Controlled Substances Act to handle marijuana.
• The rules direct states to provide procedures for determining negligence in hemp production, and specifically state that plants grown that tested 0.5% THC or below will not constitute an act of negligence.

The above are simply a few highlights and are by no means comprehensive. Expect some deeper dives into the rules in the coming days and weeks. As always, if you are a hemp company with questions regarding these rules or hemp laws in general, please contact us.