USDA

Risky Business: Interstate Hemp Transport Could Cost You Your License

The Oregon Department of Agriculture (DOA) sent the Secretary of the USDA a letter asking the federal regulator to provide guidance to the hemp industry that would allow the transport of hemp across state lines. Oregon emphasized that interstate commerce is critical for the hemp industry. Oregon’s hemp industry has grown tremendously from 105 acres of hemp grown in 2015 to over 20,000 acres in March of 2019.

There have been reports in recent weeks of state authorities bringing criminal charges against persons who are transporting hemp and cbd oil across state lines. Under the 2018 Farm Bill, a person who is convicted of a felony related to a controlled substance under Federal or State law could lose the ability to obtain a hemp license for 10 years. Persons in the cannabis industry would also be required to report the incident to current and future regulators, which could impact the ability to obtain or retain other licenses. This is a significant risk as some states have yet to remove hemp from the Schedule 1 classification.

Unless the USDA acts, relief from this predicament may not arrive until the 2020 growing season. Oregon notes that the 2018 Farm Bill allows interstate commerce once the USDA has received and approved a state’s hemp growing plan. The USDA announced that it will approve the state’s growing plans in time for the 2020 growing season. Until that time, states must rely on the prior 2014 U.S. Farm Bill, which does not permit interstate hemp transport. USDA guidance is needed to provide the market with the certainty that it needs to grow, and compete with international players.

Get Ready for the New Sheriff in Hemp Town - the USDA

The nation celebrated when President Trump legalized hemp by signing the Farm Bill of 2018. The production of cbd infused products skyrocketed, and the country seemed to think everything was legal. This is not the case. Now that the USDA is in charge, we expect the states to step up enforcement efforts. The hemp and CBD market will soon understand exactly what is and is not legal.

The Farm Bill also directed the USDA to develop a program under which the states would submit a hemp growing plan to the USDA for approval. The USDA has updated its website to include a Marketing Program for the Commercial Production of Hemp. The site outlines the agency’s plans for adopting a rule governing each state’s hemp programs, and it will be effective for the 2020 growing season. Until then, the states will rely on the Farm Bill of 2014.

The USDA indicated that the proposed rule will outline minimum requirements that the states must follow for recordkeeping, testing, disposal of failed hemp, inspections and a state’s enforcement program. The USDA is also focused on the production of hemp in violation of the Farm Bill, which is a broad standard. The USDA expects the proposed rules to be released in September. Once adopted, the USDA will monitor the states’ compliance with growing plans including testing, inspection and enforcement procedures.

The hemp, cbd and thc industries must take an active role in providing comment on the USDA’s proposed hemp rules. The final product will drive testing, destruction, remediation and enforcement standards. This states will not be able to lower the standards, and will be forced to enforce the industry’s compliance. The industry’s voice will be muted, and access to federal regulators is limited. The USDA will be holding a listening session for the industry on March 13th. Unlike most state regulatory meetings, federal government agencies do not hold a public comment open mike. Your words will be that voice, and the tone must be one that the federal government understands. Hemp is now legal, but it comes with a new sheriff.