USDA Concerned about Growing Pains With Expedited Time Frame for Hemp Rule

Because AMS has been corresponding with most stakeholder groups for weeks, they were aware of many of the issues raised during the webinar and reportedly did not hear any new concerns.

However, there is a general concern within AMS that the unknown variables surrounding the hemp issue, combined with the expedited time frame for drafting the rule, might result in growing pains for the industry once the rule is implemented.

Stakeholder Concerns and Requests

The webinar itself provided a forum for stakeholder groups to outline their issues of interest and provide suggestions on how the rule should be drafted. Some of the common concerns and requests from hemp industry groups included the following:

• The drafting of the rule should be expedited to allow states and tribes to develop production and enforcement plans for the 2019 growing season, and there should be immediate assistance provided to allow for interstate commerce and address access to financial services. The general sentiment is to somehow make it possible to begin planting crop in the field this spring.
• Post-harvest testing standards for tetrahydrocannabinol should be uniform. For instance, some requested that the standard include a requirement that hemp shipments be sealed and not retested to preserve the integrity of initial tests.
• Some webinar participants noted that stress factors can cause THC levels in plants to increase, and urged USDA to factor this into testing requirements. They also called for common standards for THC testing labs to ensure that testing methods and protocols do not vary across states or laboratories. Otherwise, as one participant noted, three different labs could yield three different results.
• There were several comments suggesting that allowable THC levels be increased from 0.3 percent because it will be difficult to meet this requirement due to variations in testing.
• Officials from state agricultural departments with fully developed hemp rules suggested that elements of the rules in their states could be implemented nationally, thus facilitating the rule-drafting process for AMS.
• However, some webinar participants lamented disparities in other states in approaches to basic practices such as sampling, testing methods, and lab accreditation.
• The need to educate the financial sector in order to access banking institutions also was conveyed; it was explained that some banks fear extending loans to hemp producers for liability reasons and for misconceptions about the plant.
• Several speakers also urged AMS to coordinate with other federal regulators to ensure a consistent approach to federal hemp regulation. They noted the Food and Drug Administration’s position restricting the use of CBD in foods and dietary supplements, and questioned whether Customs and Border Protectionwould continue to restrict the importation of hemp seeds.

AMS Concerns

While AMS is determined to finish drafting the hemp rule no later than November 2019 to allow states to submit their plans for the 2020 planting season, there have been concerns expressed internally over how the expedited time frame could impact the industry’s ability to address some of the issues raised during the webinar.

Of particular concern to AMS is resolving a number of issues before there can be an adequate interstate commerce system, including which agency/law enforcement entities have jurisdiction in this area. For instance, there still is some confusion over distinguishing hemp from marijuana, which still is federally regulated as a Schedule I substance. In fact, one webinar participant reported that, because of this confusion, some states still are seizing hemp shipments and, as a result, some trucking services are not offering transportation services for hemp products.

A related issue is the inconsistent pace with which interested states will adopt and implement the new rules. While the webinar demonstrated that there are a number of states ready to move forward expeditiously, there still are a number of states and tribal nations with significant work to do.

Finally, there is a general concern over what the market value for hemp will be and how that might create unreasonable expectations. Most key stakeholder groups – states, tribal nations, and farmers – view hemp as a panacea crop that will benefit everyone while increasing rural incomes. However, if everyone wants to grow hemp and the market becomes saturated, it might result in reduced income projections.