The U.S. Department of Agriculture (“USDA”) released on January 15, 2021, a final rule package designed to serve as the framework for a U.S. hemp industry that gained federal legal status a little more than two years ago. The 301-page package delivers some changes from an October 2019 interim final rule that provided initial guidelines to implement the 2018 Agriculture Improvement Act (known colloquially as the “2018 Farm Bill”). The 2018 law removed hemp from the Controlled Substances Act and set a legal definition for hemp as 0.3 delta-9-tetrahydrocannabinol (“THC”) on a dry weight basis.
The final rule package, which takes effect March 22, 2021, provides steps for the USDA to review and approve plans submitted by state, territorial and tribal governments for regulating hemp production. The rule also lays out how the USDA will regulate farmers in states or tribal lands that have not outlawed hemp but also have not submitted plans. The finished regulations come after 5,900 public comments and letters from members of Congress.
The 2018 law followed the Agricultural Act of 2014 (“2014 Farm Bill”) that allowed hemp pilot projects. Some states opted to continue running hemp agriculture under the 2014 provisions as they worked on plans to submit to the USDA that comply with the 2018 Farm Bill. The USDA has approved plans from 45 states and tribes, but many are still in the process of putting the plans into action. 20 states and nine tribes submitted reports to the USDA by November 2020 that showed 6,166 acres were planted under the 2018 Farm Bill regulations. After the USDA fell behind schedule in finishing the final rule, Congress included language in the Consolidated Appropriations Act, 2021 (P.L. 116-260) that would allow states to continue to operate under their 2014 plans until January 1, 2022. Under the 2018 Farm Bill, the USDA and its agencies are responsible for creating a uniform hemp program as states make the transition from the 2014 Farm Bill to the 2018 law.
Key Provisions of the Final Rule
The final rule package keeps much of what was in the interim final rule, but USDA officials tried to address some farmers’ concerns. Key provisions of the final rule include:
- Negligent Violation – Under the final rule, farmers will not be labeled as negligent if test samples of their hemp crop register at 0.5 percent THC on a dry weight basis. The regulation would put the negligent threshold at 1 percent THC. That is important, since being declared negligent three out of five years could result in a farmer being barred from hemp production for five years. The hemp industry argued that given the volatile nature of THC in hemp plants, a farmer who followed all the rules could still exceed the 0.5 percent threshold.
- Disposal and Remediation of Non-Compliant Plants – The rule also would allow farmers with crops that test above 0.3 percent THC level to continue to dispose of so-called “hot plants” by plowing the plants under to amend the soil, cutting and blending the plants with manure or other material to make compost and burning the plants. The options allow farmers to get some use out of the plants and avoid more costly methods of destruction. The USDA also provides acceptable remediation techniques in a separate guidance document.
- Timing of Sample Collection – Farmers would get more time for testing and harvesting their plants. The interim final rule gave them 15 days before a planned harvest to get THC testing necessary to determine if the crop met the legal definition for hemp. The final rule expands that window to 30 days for testing and the start of harvesting. The hemp industry had complained that the tight window for testing would result in logjams at labs and delay harvesting.
- Sampling Method – Although the final rule keeps a requirement that samples for pre-harvest testing must come from the hemp flower, which farmers argue boost THC readings, the USDA now will allow flower samples that include floral material and five to eight inches of the plant. Hemp groups had sought changes that would allow samples from the whole plant as one way to even out high readings in areas where THC is concentrated.
- Testing Using DEA-Registered Laboratories – States with USDA-approved plans will get more flexibility on how the testing is done, particularly for plants that are raised for clones or other purposes and never reach the flowering stage. The USDA will require that all testing be done by labs registered with the U.S. Drug Enforcement Agency (“DEA”), but facilities interested in being hemp facilities will have time to register. The USDA will not begin enforcement of the requirement until December 31, 2022.