USDA Releases Final Rule Regulating Industrial Hemp

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On January 15, 2021, the United States Department of Agriculture (“USDA”) published its final rule (the “Final Rule”) regulating the production of industrial hemp under the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”). The Final Rule modifies regulations set forth in the interim final rule published on October 31, 2019 (the “Interim Rule”). The modifications are based on approximately 5,900 public comments submitted to the USDA over three public comment periods.

The Final Rule contains the following key provisions:

  • Harvest Window– Producers now have up to 30 days after collecting samples to harvest the crop.
  • Sampling Method – States and Indian Tribes may now implement “performance-based” sampling requirements. States and Indian Tribes are required to submit their “performance-based” plans to the USDA for approval to ensure that, at a confidence level of 95 percent, no more than one percent (1%) of the plants in a lot will exceed the “acceptable hemp THC level.” [i] Importantly, hemp that is produced for research is not subject to the same sampling requirements so long as the producer adopts and follows an alternative sampling method that has the potential to ensure that the plant will not test above the acceptable THC level.
  • Location of Samples – Although samples cannot be taken from the “whole plant,” the Final Rule provides greater flexibility for producers by modifying the sampling requirements to state that the sample shall be approximately five to eight inches from the “main stem” (that includes the leaves and flowers), “terminal bud” (that occurs at the end of a stem), or “central cola” (cut stem that could develop into a bud) of the flowering top of the plant.
  • Disposal and Remediation of “Hot” Hemp – Producers no longer need to use a DEA-registered reverse distributor or duly authorized Federal, State, Tribal, or local law enforcement officer to dispose of non-compliant plants, commonly referred to as “hot” hemp. The Final Rule incorporates additional disposal methods including options such as plowing under non-compliant plants, composting into “green manure” for use on the same land, tilling, disking, burial, or burning the crop.
  • Testing Using DEA-Registered Laboratories – Due to the limited number of DEA-registered laboratories, the Drug Enforcement Administration (“DEA”) is allowing non-DEA registered labs to continue to test hemp until January 1, 2022.  
  • Negligent Violations – The Final Rule increases the negligence threshold from 0.5 to 1.0 percent THC and clarifies how States and Indian Tribes determine when to suspend or revoke a producer’s license. As a result, producers do not commit a negligent violation if they produce plants that exceed the “acceptable hemp THC level” and use “reasonable efforts” to grow hemp and the plant does not have a THC concentration of more than 1.0 percent on a dry weight basis. However, producers are limited to no more than one (1) violation per calendar year.
  • Extent of Tribal Regulatory Authority over the Territory of the Indian Tribe – Tribes are explicitly authorized to exercise jurisdiction, and accompanying regulatory authority, over the production of hemp throughout its territory regardless of the extent of its inherent regulatory authority.

The Final Rule becomes effective on March 22, 2021.

WHAT DOES THIS MEAN FOR YOUR BUSINESS?

The Final Rule aligns with may of the public comments submitted by industry stakeholders and effectively provides producers with more practical interpretations of the 2018 Farm Bill, including  a broader harvest window and additional disposal methods for “hot” hemp. Despite the many beneficial revisions incorporated in the Final Rule, producers must remain vigilant by monitoring ever-evolving USDA and DEA guidance to ensure compliance with the 2018 Farm Bill.  For the industry to truly prosper, further tweaks and substantive modifications to these rules will be necessary as the industry continues to expand.

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[i] Acceptable hemp THC level: When a laboratory tests a sample, it must report the total delta-9 tetrahydrocannabinol content concentration level on a dry weight basis and the measurement of uncertainty. The acceptable hemp THC level for the purpose of compliance with the requirements of State or Tribal hemp plans or the USDA hemp plan is when the application of the measurement of uncertainty to the reported total delta-9 tetrahydrocannabinol content concentration level on a dry weight basis produces a distribution or range that includes 0.3 percent or less. For example, if the reported total delta-9 tetrahydrocannabinol content concentration level on a dry weight basis is 0.35 percent and the measurement of uncertainty is ±0.06 percent, the measured total delta-9 tetrahydrocannabinol content concentration level on a dry weight basis for this sample ranges from 0.29 percent to 0.41 percent. Because 0.3 percent is within the distribution or range, the sample is within the acceptable hemp THC level for the purpose of plan compliance. This definition of “acceptable hemp THC level” affects neither the statutory definition of hemp, 7 U.S.C. 1639o(1), in the 2018 Farm Bill nor the definition of “marihuana,” 21 U.S.C. 802(16), in the CSA.

Please note that this definition affects neither the statutory definition of hemp, 7 U.S.C. 1639o(1), in the 2018 Farm Bill nor the definition of “marihuana,” 21 U.S.C. 802(16), in the CSA.

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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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