On October 31, the United State Department of Agriculture released the interim final rule with request for comments for the “Establishment of a Domestic Hemp Production Program” (Read the full interim rule and comment here.).  These long-awaited rules were mandated by the Agricultural Improvement Act of 2018 (also called the 2018 Farm Bill), and cover the USDA’s approval of state hemp production plans as well as establish a Federal plan to apply in states without a state-specific plan.

 Agency Process

Under typical agency rulemaking procedures, an agency would release a proposed rule, request public comment, and then issue a final rule taking into account the public comment.  For these rules, the USDA decided to forego this usual process and to issue a final rule without a draft phase in order to have a final rule as quickly as possible.  However, the USDA made clear that this rule is an interim final rule and is accepting public comments with the intent to take these comments into consideration when ultimately issuing the final rule. The interim rule as released will be in effect from October 31 until a final rule is issued. More details regarding the USDA’s decision to do this can be found on pages 58553-58554 of the Federal Register Notice (linked above). 

 Highlight of Certain Provisions – What to Expect in State and Tribal Plans

States or Indian Tribes that wish to have primary regulatory authority over hemp production within its jurisdiction may submit plans for the monitoring and regulation of hemp production to the USDA.  The Alabama Department of Agriculture is preparing to submit an Alabama plan to the USDA under these rules.  Once the USDA receives a state plan, it has 60 days to review it and either approve or reject it. The provisions below indicate what hemp industry professionals can expect to see in the proposed plan for Alabama (or any other State or Tribal plan):

 1.         Producer information and land used for production.  State and Tribal plans must contain provisions for collecting, maintaining, and reporting to USDA the contact information of hemp producers, the legal descriptions and GPS coordinates of land used for production, and the status and number of the producer’s license.  They must also require that hemp crop acreage be reported to the Farm Service Agency, along with the total acreage of hemp planted, harvested, and disposed.

2.         Sampling and testing for THC.  State and Tribal plans must contain procedures for sampling and testing and require that sampling and testing be done within 15 days prior to the anticipated harvest.  The sampling method must be sufficient at a confidence level of 95% that no more than 1% of the plants in the lot would exceed the acceptable THC level.  Testing must be completed by a DEA-registered lab and samples must be tested using post-decarboxylation or “other similarly reliable analytical methods”.  The regulations state that appropriate testing methodologies include (but are not limited to) gas or liquid chromatography with detection.  Total THC (the sum of the THC and THC-A content) is to be determined on a dry weight basis.

Measurements of uncertainty will be considered to determine whether the 0.3% maximum THC content for hemp is met.  The measurement of uncertainty for a particular sample will be listed as a range, and as long as 0.3% falls in that range, the sample will be considered hemp.  For example, as explained in the USDA rule, if a lab reports a result as 0.35% with a measurement of uncertainty range of 0.29% to 0.41%, the sample will be considered hemp and not subject to destruction since 0.3% falls within that range. The Alabama Department of Agriculture required all inspection, sampling, and testing to be completed by Department of Agriculture representatives during the inaugural 2019 harvest season.

 3.         Disposal of non-compliant plants.  If the acceptable THC limit is exceeded, State and Tribal plans must require the plants be disposed of in accordance with CSA and DEA regulations.

4.         Compliance with enforcement procedures.  State and Tribal plans must include procedures to comply with the USDA’s new enforcement procedures.  These new enforcement procedures provide that hemp producers are deemed to have not committed a negligent violation of the rules if their plants exceed the acceptable THC level if (a) that producer has used reasonable efforts to grow hemp and (b) the plant does not exceed 0.5% THC.  If a producer is found to have committed a negligent violation, a corrective action plan must be followed.  If the producer has three negligent violations within a five-year period, the producer will be ineligible to grow hemp for a period of five years from the date of the third violation.

What Is Not Included

No seed certification program.  Although widely discussed as a possible reason for the delay of the rules, the USDA has chosen not to implement a seed certification program in this rule since different seeds grown in different areas may produce varying concentrations of THC.  In addition, the USDA recognized that it does not have accurate data at this time on the origin of most hemp seed planted in the U.S. and that technology is not currently advanced enough to determine seed planting results in different locations.

 Why Is the USDA Asking for Comments?

Generally, when a federal agency intends to issue a new regulation, it is required to publish the proposed regulation for public review and comment prior to the regulation becoming final.  Any interested member of the public can submit comments on their thoughts and ideas regarding the proposed regulations.  While the number of comments “for” or “against” a proposed regulation is not considered by the agency, the agency does take the substance of the comments into consideration when determining whether to adopt the regulation as written, or to modify the proposal.

In this case, the USDA chose to forego the process for releasing a proposed rule prior to releasing an interim final rule.  However, it is still requesting and considering comments on the interim final rule that will be taken into consideration when implementing the final rule.

Why Should I Comment?

If you are a hemp grower or processor, you will be directly affected by these new regulations.  These regulations could affect your ability to purchase, grow, process, transport, market, and sell hemp and hemp-derived products.  While the intent of the regulations is to open the market for the hemp industry, it is important that interested parties read them carefully and think about the impact they will have, both positive and negative, on their individual businesses and the market in general.  If the public comments contain persuasive new data or policy arguments, or identify difficult questions or criticisms of the new regulations, the agency can decide to modify the regulations.

 What Types of Information Should I Include in My Comments?

Federal agencies base their rulemaking decisions on numerous factors such as the type of problem the regulation is attempting to address, scientific data, alternate solutions, costs, and general policy concerns.  The most helpful comments are those which help to address these factors, providing facts and potential solutions. While your comments do not otherwise have to be in any particular format, well-organized and concise feedback can be the most compelling for regulation comments.

The USDA has requested specific comments on the following issues, although all comments should be considered:

• the 15-day sampling and harvest timeline
• a potential requirement for a testing laboratory to be approved by USDA (in addition to the existing requirement that the laboratory be registered with DEA)
• a potential requirement that all laboratories testing hemp to have ISO 17025 accreditation
• what reasonable efforts should be considered in determining whether a grower has been not been negligent in growing hemp that exceeds the acceptable hemp THC level (for example, using certified seed, using other seed that has reliably grown compliant plants in other parts of the country, or engaging in other best practices will already be considered by USDA)
• whether the August 1 to October 31 application period for the USDA plan (for states without a USDA-approved hemp program) is sufficient
• information collection under the USDA plan, specifically:
  • whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
  • the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
  • ways to enhance the quality, utility, and clarity of the information to be collected; and
  • ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology

• the estimated impacts of the rule, specifically whether there is information or data that may inform whether or not the market will experience a significant shift, either positive or negative, in the developing hemp market and on consumers
• any data or information on what impacts the regulation may have on current and future innovation in the areas of industrial hemp usages and how much such impacts on innovation may affect rural communities
• the potential for innovation and the uncertainty and its impact on the market
• reliable data sources that may be available for annual receipts of industrial hemp producers

 How Long Do I Have to Comment on the USDA’s Interim Final Industrial Hemp Regulations?

The deadline to submit comments is December 30, 2019.

December 17, 2019 update:  The comment deadline has been extended to January 29, 2020 (https://www.federalregister.gov/documents/2019/12/18/2019-27245/establishment-of-a-domestic-hemp-production-program).

Where Do I Submit My Comments for the USDA’s Interim Final Industrial Hemp Regulations?

The Federal Register notice calls for comments to be submitted via the Federal eRulemaking portal at www.regulations.gov. Comments may also be filed with Docket Clerk, Marketing Order and Agreement Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250–0237; or Fax: (202) 720–8938. All comments should reference the document number (Doc. No. AMS–SC–19–0042) and the date (October 31, 2019) and page number (58522) of the issue of the Federal Register.  The Federal Register notice states that comments submitted will be publicly available.

 For further information, assistance with making an official comment on the USDA interim final rule, or assistance with other hemp-related issues, please contact a member of our Agricultural Law team:  Jane Calamusa, Robin Pate, Alyce Spruell, or Nicole Hampton.