By: Suzan Onel
On Tuesday, October 29, 2019, the United States Department of Agriculture (“USDA”) issued a pre-publication copy of its interim final rule for the domestic production of hemp. This is a significant development in the implementation of the 2018 Farm Bill (formally known as the “Agriculture Improvement Act of 2018”) and will help provide clarity to hemp growers and ancillary businesses on how hemp production will be regulated. Notably the USDA’s interim final rule addresses the production of hemp; it has no impact on the regulation of finished food, supplement, over-the-counter drug, or cosmetic products containing hemp or its derivatives such as CBD. The regulation of these finished products remains with FDA.
Under the 2018 Farm Bill, hemp and hemp-derivatives with a THC concentration of not more than 0.3% were removed from the definition of marijuana in the Controlled Substances Act. The Farm Bill also directed the USDA to establish a national framework to regulate the domestic production of hemp. Prior to the 2018 Farm Bill, and over the intervening months, hemp growers and related businesses have faced legal difficulties due to the patchwork of often contradictory state and local laws that made interstate hemp shipments vulnerable to seizure and other action.
The USDA’s interim final rule establishes the U.S. Domestic Hemp Production Program. Under this program, hemp can be grown under federally-approved plans and hemp producers can be eligible to participate in a number of USDA’s agricultural programs. The first step for growers is to become licensed or authorized under a State hemp program (including the District of Columbia, the Commonwealth of Puerto Rico, or any other territory or possession of the United States), a Tribal hemp program, or the USDA’s program. The choice of licensing program will primarily depend on the location of the hemp growing facility and whether the local State Department of Agriculture or Tribal government has a production plan that has been submitted to or approved by USDA. If the applicable State or local Tribal government does not have a pending or approved hemp production plan, an application can be submitted to obtain a USDA hemp production license.
The interim final rule outlines the basic elements that need to be in a State or Tribal hemp production plan in order to receive USDA approval and also describes the federal plan that can be used by hemp producers in States or territories of Indian tribes that do not have their own approved hemp production plan. Notable requirements include recordkeeping on the land where hemp is produced, testing the levels of THC, disposing of plants not meeting necessary requirements, and licensing procedures. The interim final rule also describes USDA programs hemp producers may be eligible for. More information in this regard can be found at https://www.farmers.gov/manage/hemp. USDA will begin reviewing submitted State and Tribal plans immediately after the publication of the interim final rule. USDA is delaying acceptance of producer applications under the USDA program for 30 days in order to allow State and Tribal governments time to submit their plans first.
The official version of the interim final rule will be published in the Federal Register on Thursday, October 31, 2019. It will be effective upon publication for two (2) years and then will be replaced with a final rule. When codified, the regulations will be found at 7 CFR Part 990, “Domestic Hemp Production.” There will be a 60 day comment period ending December 30, 2019. We will provide a link to the Federal Register document once it becomes available. In the meantime, a pre-publication copy of the interim final rule as well as a FAQ, guidance documents on sampling and testing procedures, and additional information directed to producers, hemp testing labs, and State departments of agriculture and Tribal governments are available on USDA’s website at https://www.ams.usda.gov/rules-regulations/hemp.
ADDENDUM: The Federal Register document was published this morning. You can find the official document here.