September 15, 2020

USDA Seeks Additional Comments on a Dozen Outstanding Issues Related to Hemp Interim Final Rule

Holland & Knight Alert
Taite R. McDonald | Michael J. Werner | Adrian F. Snead

Highlights

  • The U.S. Department of Agriculture (USDA) has officially requested additional comments on its Hemp Interim Final Rule (IFR).
  • It seems evident that congressional and stakeholder pressure swayed USDA to reopen its comment period. In particular, USDA is seeking comments on 12 subjects, almost all related to the sampling, testing and disposal of hemp.
  • USDA's request for additional comments follows ongoing industry feedback concerning a list of IFR requirements that the hemp industry widely believes inhibit its successful growth and operation. The renewed comment period — only the second opportunity for the industry formally to weigh in — is open until Oct. 8, 2020.

The U.S. Department of Agriculture (USDA) has officially requested additional comments on its Hemp Interim Final Rule (IFR). USDA's request, made on Sept. 8, 2020, follows ongoing industry feedback concerning a list of IFR requirements that the hemp industry widely believes inhibit its successful growth and operation. The renewed comment period — only the second opportunity for the industry formally to weigh in — is open until Oct. 8, 2020.

Background

The 2018 Agricultural Adjustment Act (AIA, or Farm Bill) defined "hemp" and removed it from the Controlled Substances Act, expressly making it legal and giving renewed life to an old industry. Congress gave the USDA primary regulatory authority and ordered it to issue rules implementing the Farm Bill expeditiously. USDA issued its Hemp IFR on Oct. 31, 2019, and the rule became effective that same day. Areas of major concern to the industry included requiring U.S. Drug Enforcement Administration (DEA)-certified labs to test hemp, requiring the destruction of hemp that tested "hot" (exceeding the acceptable THC limit) and the testing process itself.

USDA received approximately 4,600 comments by the close of the first extended comment period on Jan. 29, 2020. It had been on track to issue a final rule on or before the IFR's expiration date in November 2021.

Despite USDA's announcement in February that it would suspend two controversial provisions — testing by DEA-certified labs and turning any hot plant material over to law enforcement for destruction — many companies and executives remain concerned that what they see as the IFR's burdensome requirements would make a tough market even tougher to sustain. The suspended crop destruction provision, in particular, made obtaining crop insurance prohibitively expensive for many growers.

Recent Developments

Just last month, New York state decided it would not submit a plan under the IFR, calling the IFR's required scope and timing of sampling and testing, as well as the required disposal of non-compliant plants, "unrealistic" and unreasonably burdensome on growers. This put New York's approximately 500 growers and 20,000 acres of hemp crop in limbo.

Throughout 2020, New York growers could continue to operate under the 2014 Farm Bill. However, under the IFR, the 2014 Farm Bill state hemp plans sunset after the 2020 growing season).

For many, the IFR's requirements seem out of step with the intent of the Farm Bill. At the end of July, Sens. Ron Wyden (D-Ore.) and Jeff Merkley (D-Ore.), original sponsors of the hemp provisions in the Farm Bill, asked USDA to alter a number of the IFR's provisions, particularly those related to testing and disposal. In August, Senate Minority Leader Chuck Schumer (D-N.Y.) and Sen. Cory Gardner (R-Colo.) separately called on USDA to extend the 2014 Farm Bill hemp programs by more than a year and delay the issuance of a final rule until January 2022.

Comments Requested for 12 Subjects

It seems evident that congressional and stakeholder pressure swayed USDA to reopen its comment period. In particular, USDA seeks comments on the following 12 subjects, almost all related to the sampling, testing and disposal of hemp.

  1. Measurement of uncertainty for sampling
  2. Liquid chromatography factor, 0.877 (total THC testing)
  3. Disposal and remediation of non-compliant "hot" plants
  4. Raising the negligence standard for non-compliance from 0.5 to 1 percent
  5. Further clarifying that interstate commerce is expressly authorized by statute
  6. Whether the 15-day harvest testing window should be raised to 30 days
  7. Hemp seedlings, microgreens and clones
  8. Hemp breeding and research
  9. Sampling methodology – flower vs. whole plant
  10. Sampling methodology – homogenous composition, frequency and volume
  11. Sampling agents
  12. DEA laboratory registration

Anyone interested in commenting must do so by Oct. 8, 2020. For additional information or assistance with the USDA regulatory specifics and comment process, please contact the authors.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.


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