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November 11, 2019

Takeaways From the USDA Interim Final Rule on Domestic Hemp Production

The US Department of Agriculture (USDA) has published an interim final rule in the Federal Register1 that implements regulations for hemp production under the 2018 Farm Bill.2 Although the draft rule is still subject to comment, it provides the first official regulations from the USDA regarding the lawful production of hemp.

The Farm Bill legalized the production of hemp as an agricultural commodity and removed it from the federal list of controlled substances. While hemp and marijuana are part of the same plant species, Cannabis sativa L., and look and smell alike, they have different levels of the psychoactive compound delta-9 tetrahydrocannabinol (THC). Under the Farm Bill, hemp is defined as having 0.3 percent THC on a dry weight basis. Crops with THC above 0.3 percent are considered marijuana, a controlled substance, rather than hemp, which is an agricultural commodity.

The USDA stated the new testing protocol to determine whether a plant is hemp or marijuana will involve an analysis of the total THC content, including the non-psychoactive compound THCA, which can be converted into THC upon decarboxylation. Heating up the molecule enough by smoking, vaping, or sitting around too long causes decarboxylation––the acid chain breaks off and leaves behind THC. If the reported sum of THC combined with the weighted THCA is 0.3 percent or less, then the crop is hemp, not marijuana.

While the rule does not eliminate all confusion in identifying hemp and marijuana, it is somewhat flexible. It formulates an “acceptable hemp THC level” that accounts for a “measurement of uncertainty” in testing and uncertainty in the cultivation process.

“For example, if the reported 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 delta-9 tetrahydrocannabinol content concentration level on a dry weight basis for this sample ranges from 0.29 percent to 0.41 percent,” the USDA explained. “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.”

The USDA also declined to implement a nationwide certification program for hemp seeds. A particular seed strain certified in one part of the country as low in THC may yield a dramatically different—and noncompliant—cannabinoid profile when grown in a dramatically different climate.

Failing to account for weighted THCA may threaten the legality of shipping the hemp out of state, which, under the Farm Bill, cannot be obstructed by states or sovereign tribes. Even perfectly legal shipments, however, risk civil seizure and criminal prosecution because law enforcement currently lacks the tools, training, and technology to distinguish hemp from marijuana during roadside inspections in real time.

This problem is all too real for hemp industry operators, both in states that have not legalized hemp and in those that have.3 Just this week, the NYPD confiscated 106 pounds of Vermont-grown hemp, mistaking it for marijuana.

If the THC content is found to exceed an “acceptable hemp THC level,” it must be destroyed by someone authorized under the Controlled Substances Act to handle marijuana. A farmer may be cited for a negligent violation if found with non-compliant plants. However, a negligent violation can be avoided if the THC concentration is within 0.5 percent and if the farmer acted reasonably.

The consequences escalate from there. Three negligent strikes in a five-year window will earn the farmer a five-year ban but no criminal consequences. Criminal consequences and license revocation are reserved for culpable violations.

Within two years’ time, the USDA plans to issue final regulations on domestic hemp production. After the regulations are finalized, the USDA noted it will make determinations about state and tribal hemp plans within 60 days of their submission. Until then, hemp operators will continue operating in a state of flux. However, this long-awaited interim rule is a major step in establishing federal hemp regulations.

If you have any questions regarding the content of this alert, please contact Aleece Burgio, cannabis team leader, at aburgio@barclaydamon.com; John Nichols, counsel, at jnichols@barclaydamon.com; Mary Volcko, project specialist, at mvolcko@barclaydamon.com; or another member of the firm’s cannabis team.

1 Establishment of a Domestic Hemp Production Program, 84 F.R. 58522-58564 (Oct. 31, 2019).

2 Agricultural Improvement Act of 2018, Pub. L. No. 115-334, §§ 10113-10114, § 12619, 132 Stat. 4908-4914, 5018 (enacted Dec. 20, 2018) (“2018 Farm Bill”).

3 Compare NY Police Dep’t 75th Precinct, at https://twitter.com/NYPD75Pct (Nov. 5, 2019) (last visited Nov. 7, 2019) (tweeting confiscation of 106 pounds of marijuana), with WKYT, Farmers say NYPD mistakenly confiscated 106 lbs of hemp, at https://www.wkyt.com/content/news/Farmers-say-NYPD-mistakenly-confiscated-106-lbs-of-hemp-564571731.html (Nov. 6, 2019) (last visited Nov. 7, 2019). See generally Big Sky Sci. LLC v. Idaho State Police, et al., No. 1:19-cv-00040-REB, Dkt. No. 32 (Feb. 19, 2019 D. Id.), modified by Big Sky Sci. LLC v. Idaho State Police, No. 19-35138, Dkt. No. 72-1 (9th Cir. Sept. 4, 2019).

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