USDA Interim Rule Provides Needed Guidance for the U.S. Hemp Industry

By: Christopher Strunk, Mackenzie Schoonmaker, and Lucy Infeld

 

The United States Department of Agriculture (“USDA”) has released a draft of its interim final rule (the “interim rule”) establishing the U.S. Domestic Hemp Production Program, in advance of the rule’s Federal Register publication, which is expected on Thursday, October 31.  The interim rule provides guidance on a number of issues and uncertainties that have plagued the industry since the passage of the Agriculture Improvement Act of 2018 (commonly known as the “2018 Farm Bill”).

The rule outlines requirements and regulations for U.S. hemp production, and covers both states (with and without USDA-approved plans) and Indian tribes.  Ten states and ten tribes have already submitted plans for hemp production to USDA, a number that is anticipated to grow rapidly.

Whether operating under a state plan or the federal plan, the rule provides much-needed guidance to growers, processors, manufacturers, and transporters of industrial hemp on issues of sampling and testing.

The sampling and testing guidelines are likely to be of particular interest to the players in the industry, given the lack of national standardization on this issue prior to the issuance of the regulations.  For example, the USDA now provides a form lab testing report, and requires that crop sampling be conducted by a federal, state, local or tribal law enforcement agency within fifteen days of the anticipated date of harvest.  The samples must be tested for delta-9 tetrahydrocannabinol (“THC”) by a Drug Enforcement Administration-registered laboratory.

The interim rule is expected to remove the “guesswork compliance” that has previously been the industry norm, and provide welcome direction to hemp business owners who have long sought to conduct their businesses legally and ethically.  It is also anticipated that the release of the regulations will be accompanied by “stepped-up” enforcement efforts by the FDA, FTC and other governmental agencies.

Comments on the interim rule will be due within sixty days of its publication in the Federal Register. After considering all comments, USDA will publish a final rule within two years of the interim rule’s effective date.  In the meantime, the interim final rule will remain in effect.

Beveridge & Diamond will publish a detailed analysis of the interim rule’s provisions and anticipated impacts to the industry over the next week.

Please join the National Industrial Hemp Council and Beveridge & Diamond at our upcoming free webinar entitled “Understanding the USDA Interim Hemp Regulations:  A Nuts & Bolts Guide to Compliance,” which will be offered from 1:00 – 2:30 EST on November 19, 2019.

 

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