Last week, the U.S. Department of Agriculture (“USDA”) held a public meeting during which hemp stakeholders shared their opinion on the promulgation of rules to regulate the crop.
Pursuant to the 2018 Farm Bill, which legalized hemp by descheduling the crop under the Controlled Substance Act, the USDA is tasked with overseeing and regulating the production of hemp in the United States. Specifically, the federal agency is to review and approve “plans” submitted by states and Indian tribes that choose to hold primary regulatory authority over hemp. However, before the federal agency may begin reviewing these plans, the agency must formalize rules with which states and Indian tribes plans must comply. As of the date of this memo, only a handful of states and Indian tribes have submitted their plans.
Roughly 50 speakers, including state governments, Indian tribe representatives, and stakeholders in the supply chain of hemp, shared their thoughts during the three-hour long webinar. All expressed concerns regarding testing procedures, interstate transportation of the crop, access to banking, and guidance from the Food and Drug Administration (“FDA”). Here is a summary of what each group had to say:
Several state Departments of Agriculture, including Pennsylvania, Kentucky, and Wisconsin, expressed great concerns regarding testing and access to banking. Ryan Quarles, Commissioner of the Kentucky Department of Agriculture, explained that hemp farmers and companies need access to capital “just like any other farmer or agri-business.” Quarles also called for guidance from the FDA regarding its position on CBD derived from industrial hemp:
If the FDA regulates too hard against CBD, it would really harm small Kentucky family farms … We’ve got to develop rules that allow our farmers an opportunity to continue supporting this crop and benefitting economically from it, especially during a period of depressed farm cash receipts.”
Although the USDA expects to release these rules by the 2020 growing season, Indian tribes urged the USDA to do so before the end of the 2019 harvest season. Because Indian tribes are not currently allowed to grow hemp pursuant to the 2014 Farm Bill, which strictly limits hemp cultivation within state borders, pushing the release of the rules until fall would further delay tribes’ access to the market and put them at a financial disadvantage.
Supply Chain Stakeholders
The primary concern shared by stakeholders involved in the supply chain pertained to the likely confusion by state enforcement officials in differentiating hemp from marijuana. Indeed, as reflected in recent events, local enforcement groups have struggled to differentiate the plants as they look and smell alike. This issue partially stems from the technologically inadequate field kits currently available, which only detect whether THC is present, regardless of its concentration. Such confusion, industry players held, will continue to lead to unnecessary delays and mistaken arrests.
This public meeting was the first step toward the USDA issuing a proposed regulation in the implementation of the 2018 Farm Bill. Next month, the FDA will hold a similar public meeting to hear directly from stakeholders regarding the regulation of CBD-infused food and dietary supplements. We will summarize the meeting after it occurs. Stay tuned!