State Comments on USDA’s Interim Final Rule Governing Hemp Production
Stites & Harbison Client Alert, February 10, 2020
The comment period for the U.S. Department of Agriculture’s Interim Final Rule (IFR) has closed. Over 3,000 comments were submitted by farmers, companies, hemp industry associations, and state agriculture departments. Given their regulatory experience and the uniformity of their pushback, it seems likely that the USDA will be most receptive to the comments from the state agriculture agencies. A summary of the most common state comments follows:
- The IFR requires THC sampling of all hemp crop locations on an annual basis. Instead of comprehensive testing all locations, most states recommend random, risk-based sampling to reduce their administrative burden. For example, Kentucky has identified a number of seed varieties that test consistently below 0.3%, and a number of varieties whose THC levels are more likely to fluctuate. Kentucky believes that the crops of the former varieties need to be tested less often than the latter.
- The IFR requires THC testing to be performed within 15 days of harvest. The states are unanimous that 15 days prior to harvesting is too short a timeframe to complete compliance testing, considering laboratory turnaround times and limited capacity at peak-demand. The state agencies warn that testing bottlenecks are likely to result in unnecessary crop losses. If pre-harvest testing is delayed, THC levels are likely to increase, and some instances, exceed the threshold. Most states recommend 30 days.
- The IFR requires that all testing labs be registered with the Drug Enforcement Agency. The states are unanimous that registration of all testing labs with the DEA is unnecessary and burdensome, and will likely create yet another bottleneck. For example, there is not a single DEA registered lab in New Mexico. Many states resent the involvement of the DEA, as they believe compliance with the administrative regulations should be handled by farm regulators rather than a criminal drug enforcement agency.
- The IFR requires samples to be taken from flower material in the top third of the plant. The states criticize the sampling protocol as too vague, and are concerned that different protocols will yield inconsistent results. Kentucky recommends that the sample be taken from the top eight inches of the plant, and include twigs and stems. North Carolina recommends that the entire plant be taken, from the ground up, before a homogenous sample is tested. Samples that include the entire plant are less likely to test “hot.”
- The IFR establishes a “presumption of negligence” if hemp registers 0.5% THC or more, with possible criminal penalties for repeat violations. Most state agriculture departments complain that automatically assessing a “negligent” violation for hemp testing over the 0.5% level is too low a threshold and too harsh a consequence, given the many variables affecting THC levels. They recommend 1.0%, and/or a more traditional “facts and circumstances” assessment of negligence.
- The IFR requires “hot crops” be destroyed by DEA-approved “reverse distributors.” The states are unanimous that this requirement is unduly burdensome and expensive. They believe more flexibility should be accorded the states in arranging for disposal of non-compliant crops. Several states allow farmers to recover seed and fiber from the hemp crop to mitigate their losses. Others allow in situ disking or composting. They believe agriculture department employees should supervise disposal.
- The IFR requires measurement of “Total THC,” i.e. THC plus THC acid (THCA). Most states agree with the USDA that Total THC should be measured. However, many farmers complain that measurement of THCA is not required by the statutory language, and its use gives an artificially high reading, making cultivation of hemp crops for CBD purposes more risky.
- The IFR requires states to adopt their plans by October 31, 2020. Several states complain that the proposed timeframe is during the harvest season, and recommend that it be extended to January 1, 2021. A number of states, including Kentucky and North Carolina, have indicated that they will continue to operate under the pilot program regulatory regime for 2020, in the hope that the USDA will tweak the IFR in response to some of the foregoing comments.
The United States Department of Agriculture will review and assess the many comments received and is expected to revise its rule later this year.