USDA Rolls Out Nationwide Hemp Regulations

The Trump administration has announced a long-awaited rule on domestic hemp production that could help relieve legal snags for trucking companies and drivers hauling the crop across state lines.

The U.S. Domestic Hemp Production Program, announced today (Oct. 29) by U.S. Department of Agriculture (USDA) Secretary Sonny Perdue, creates "a consistent regulatory framework around hemp production throughout the United States," as required by the 2018 Farm Bill, which removed hemp from the list of controlled substances.

"At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets," Perdue said in a statement. "We have had teams operating with all hands on deck to develop a regulatory framework that meets congressional intent while seeking to provide a fair, consistent and science-based process for states, tribes and individual producers who want to participate in this program."

Concurrent with the rule, USDA also issued guidelines for sampling and testing procedures to provide additional information for sampling agents and hemp testing laboratories.

The agency said the 160-page interim rule will aid in the production, harvesting, transportation, storage and processing of hemp and hemp products. "Absent an interim rule promptly implementing the regulatory program required by the 2018 Farm Bill, there are no procedures in place to determine whether a cannabis crop qualifies as hemp" as defined by current law, the agency said.

Prior to the administration's rolling out this interim final rule (IFR), trucking companies and drivers hauling hemp across state lines have come up against legal problems in states that don't distinguish between hemp and marijuana. The IFR provides more guidance for law enforcement officials who must make those distinctions, according to USDA.

"While the States and Tribes may not prohibit the transportation of hemp produced under the 2014 Farm Bill, law enforcement does not currently have the means to quickly verify whether the cannabis being transported is hemp or marijuana," the agency states. "The IFR will assist law enforcement in identifying lawfully produced hemp versus other forms of cannabis that may not be lawfully transported in interstate commerce."

The IFR will also presumably put regulatory force behind a legal opinion issued by USDA earlier this year that helped mitigate some of the uncertainty for drivers hauling hemp across state lines.

USDA noted that the IFR doesn't address hemp exports. "Should there be sufficient interest in exporting hemp in the future, USDA will work with industry and other Federal agencies to help facilitate this process."

The IFR becomes effective upon publication in the Federal Register, which is expected later in the week, and USDA will also provide for a comment period. If the agency had added a subsequent formal notice and comment period after that, it would have pushed the effective date of the program "well beyond 2020 and into 2021 and [delayed] guidance that stakeholders sorely need," it stated.

The banking industry, for example, has been waiting for regulations to develop their own guidance regarding deposits derived from hemp operations, according to USDA, without which they're not willing risk accepting deposits or lending money to hemp businesses.

In addition, USDA stated, having a rule that goes into effect this fall will allow producers to plan for the 2020 crop year, including identifying planting acreage, obtaining financing and contracting with potential buyers.

Image by Eugenio Cuppone from Pixabay