The U.S. Department of Agriculture (“USDA”) released draft regulations for hemp production on Tuesday, giving farmers, states, and other industry stakeholders some much needed clarity on how the hemp provisions of the 2018 federal farm bill will be interpreted and enforced.

Once the interim rule is finalized, the USDA will begin to accept and review states’ and tribes’ hemp regulation plans. The plans must at a minimum provide for tracking of land where hemp is grown; testing protocols for THC levels; disposal processes for non-compliant plants; inspections; and for sharing information with the USDA.

If a state (or tribe) chooses not to submit its own plan for regulating hemp production – or if a state’s plan is not approved by the USDA – hemp farmers in the state will be subject to the USDA’s own hemp regulation plan. The USDA plan creates an application and licensing system for hemp farmers, provides a sampling and testing protocol, establishes a process for disposing of non-compliant plants, imposes reporting and recordkeeping requirements, and creates an audit and enforcement process for “negligent violations” of the rules and the law.

The interim rule maintains the federal farm bill’s maximum level of 0.3% THC concentration for hemp. However, the rule provides a buffer zone for hemp farmers: Recognizing that THC levels may sometimes exceed the statutory maximum of 0.3%, the rule declares that farmers do not commit a negligent violation so long as THC levels do not exceed 0.5% and the farmer makes “reasonable efforts” to comply with the 0.3% ceiling. The rule also prevents states and tribes from prohibiting the interstate transportation of hemp – ensuring that hemp farmers will be able to sell their crops to a national market.

The interim final rule is subject to a 60-day public comment period and may be revised in response to comments received during that time. The interim rule is scheduled to sunset in two years and will be replaced by a permanent final rule at that time.