USDA Issues Legal Opinion On Hemp

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On May 28, 2019, the United States Department of Agriculture (the “USDA”) and the Office of the General Counsel (the “GC”) issued a legal opinion on the status of hemp following the passage of the 2018 Farm Bill. The opinion confirms: first, hemp must be produced under the 2014 Farm Bill until the USDA creates federal regulations or endorses a State program, and second, all hemp produced under the 2014 Farm Bill is protected by the provisions in the 2018 Farm Bill.

The legal opinion clarifies three major points of concern for farmers, business owners, and investors interested in the production of hemp: descheduling, legal ways to produce hemp under current law, and the interstate transport of legally produced hemp.

Descheduling

Most importantly, the opinion confirms hemp has been entirely removed from the Controlled Substances Act (the “CSA”), effective December 20, 2018. Enforcement and penalties for producing, transporting, and owning hemp are now out of the hands of the Drug Enforcement Agency. Instead, the USDA, Food and Drug Administration (“FDA”), and State governments hold responsibility for enforcing the laws and rules around hemp.

Legal Production of Hemp Under Current Law

As Husch Blackwell has stated since the passage of the 2018 Farm Bill, hemp production is allowable only under the provisions of the 2014 Farm Bill until the USDA creates new federal regulations. The 2014 Farm Bill requires hemp to be produced for the purpose of research under a State pilot program.

Transportation of Legal Hemp Across State Lines

Third, in contrast to a recent magistrate decision in Idaho, the USDA and GC have taken the position that States and Tribes may not impede the transportation of hemp produced under a valid 2014 Farm Bill pilot program. The 2018 Farm Bill prohibits States and Tribes from interfering with interstate transport of any hemp produced lawfully under the 2018 Farm Bill, which, according to the USDA and GC, incorporates the 2014 Farm Bill’s pilot programs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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