USDA Hemp Regulations Analysis- The Provisions You Need To Know

[Editor’s note: This article is the second in a series of articles on the Interim Rule issued by the USDA on October 29, 2019 regarding hemp production. This article, written by Kight Law attorney Kamran Aryah, lists and summarizes the Rule’s primary issues and provisions. Click here to read our analysis of the Rule’s licensing requirements and click here to read about whether certain provisions will provoke a crisis or create opportunities. -Rod Kight]

On October 29, 2019, the United States Department of Agriculture (USDA) issued its Interim Final Rule (Rule) governing the Establishment of a Domestic Hemp Production Program. The Rule, which is 161 pages long, outlines provisions for the USDA to approve plans submitted by States and Indian Tribes for the domestic production of hemp, and it also establishes a Federal plan for producers in States or territories of Indian Tribes that do not have their own USDA-approved plan. The Rule contains provisions related to testing level requirements, disposing of plants not meeting necessary requirements, licensing requirements, and ensuring compliance with the requirements of 7 CFR Part 990 (Part).

Here are some of the Rule’s key provisions:

1. Federal Preemption: The USDA re-confirmed that the 2018 Farm Bill preempts state law with regard to interstate transport of hemp. Specifically, States and Indian Tribes may not prevent the movement of hemp through their States or Territories even if they prohibit its production. States that regulate hemp must do so in a manner that is at least as strict as the 2018 Farm Bill and the USDA federal plan. Importantly, they are permitted to regulate hemp in a manner that is more stringent than the USDA plan. This includes making the cultivation and commerce of hemp and hemp products unlawful, though it is unlawful for a state or Indian Tribe to prohibit the transport hemp through its borders.

2. Seed Certification: The USDA will not establish a federal seed certification program. The USDA acknowledged the magnitude of this undertaking and has decided it is not feasible at this time. Citing differences in climate and cultivation conditions in different regions in the United States, the USDA decided that seed selection and development is so region-specific that setting one national standard for seed certification is currently impracticable. A seed that might produce a compliant plant in one bioregion could produce a non-compliant plant in another. Therefore, seed certification and registration will be left up to individual states. There is an acknowledgment generally that seeds certified in one state will be lawful to grow in another state, but individual cultivators remain liable to the 0.3% delta-9-THC standard.

3. “Total” THC: The definition of hemp is still based on the delta-9-THC (“THC”) concentration. However, the testing for THC will now include a calculation of THC-A, referred to in the Rule as “potential THC”, contained in a sample. If a testing method, such as gas chromatography, is used that converts THC-A to THC, (a “decarboxylation” method) then the sample must test at or below the 0.3% threshold. If a testing method is used that does not use heat, such as liquid chromatography, and thus does not convert THC-A to THC, the THC-A concentration will be multiplied by a factor of .877, and that value will be added to the THC concentration, which again must test at or below the 0.3% threshold. It is our view that this provision was unnecessary. (Click here to read a discussion of total THC, including why implementing a total THC standard is not required by the 2018 Farm Bill.) Additionally, and given the limited genetics available to farmers that can reliably meet a “total THC” standard, this requirement will impose a significant hardship on farmers and the hemp industry as a whole.

4. “Acceptable Hemp THC Level” and “Measurement of Uncertainty” (MU): These are new concepts for hemp introduced by the USDA interim rule. The purpose of these concepts is to acknowledge that there is a margin of error with testing, even with the most accurate testing methods. In order for a test to be deemed valid under the rule, the testing facility must provide a “Measurement of Uncertainty” (MU), which roughly correlates to a “margin of error”. The margin of error figure is added to, and subtracted from, the figure that represents the THC concentration to create a range. The 0.3% must fall somewhere within the range. For instance, if a test result shows THC levels to be 0.32%, and the margin of error is .03, then this is a valid sample. This is because the MU range is between 0.29% and 0.35%, which encompasses 0.3%. On the other hand, if a sample’s THC concentrations test at 0.35% with the same margin of error of 0.03, this is not a lawful sample because the range is between 0.32% and 0.38%, which does not encompass 0.3%. This provision provides significant guidance for analytical labs. An “Acceptable Hemp THC Level” is one in which 0.3% falls within the margin of error for THC concentrations.

5. “Negligence” Standard. The USDA plan creates a framework to protects licensees from criminal prosecution when their failure to produce a compliant hemp crop is the result of negligence. Click here to read an in-depth discussion of this issue.

6. 15 Day Pre-Harvest Testing Window: Cultivators must submit samples to a certified lab fifteen (15) days prior to the estimated harvest date. Licensees must allow state and local law enforcement unfettered access to the cultivation sites. The USDA justifies this tight window of time by stating, “If producers delay harvest beyond 15 days, the plant will likely have a higher THC level at harvest than the sample that is being tested.” This provision is likely to receive a significant number of comments since many states are understaffed for testing and have struggled to implement any timelines for collecting samples.

7. Implementation Timeline: These interim rules will be effective once they are published in the Federal Register. On that date, a sixty (60) day comment period will begin. After the comment period ends, USDA will publish final rules within two (2) years after the date of publication of the interim rules.

For additional information regarding the USDA’s Rule, or for help in understanding the rules and regulations governing hemp production in your State, please feel free to contact the hemp attorneys at Kight Law Office.

October 29, 2019

This post was written by Kight on Cannabis attorney Kamran Aryah. Kight on Cannabis is a law firm founded by attorney Rod Kight that represents legal cannabis businesses. You can contact us by clicking here.