USDA Issues Long-Awaited Hemp Regulations

The continuing expansion of legal adult-use marijuana into more and more states can obscure the concurrent explosion in the market for CBD oil and other products derived from hemp, marijuana’s non-psychoactive cousin. While marijuana (defined as cannabis with a THC level exceeding 0.3 percent) remains classified as a Schedule I controlled substance and is thus illegal at the federal level, the 2018 Farm Bill contains provisions to allow for and facilitate hemp cultivation, production, and distribution.

The 2018 Farm Bill required the U.S. Department of Agriculture (USDA) to establish and promulgate regulations and guidelines for the production of hemp in the United States. In late October, the USDA issued the draft version of the interim final rule that will govern the hemp industry in the United States. The rules became effective on October 31, 2019.

The proposed regulations set forth provisions for USDA approval of plans submitted by states or Indian tribes that want to have primary regulatory authority over hemp production in their jurisdictions. For those states or tribes that do not submit such plans, the USDA will develop a plan to monitor and regulate hemp production in those areas. After the USDA approves a state or tribal plan, hemp producers will be eligible for USDA programs such as crop insurance coverage.

As outlined in the interim final rule, all hemp producers and state plans must meet similar requirements including:

• Licensing requirements.
• Maintaining information on the location and crop acreage of land on which hemp is produced.
• Procedures for sampling and testing the THC concentration levels for hemp.
• Procedures for disposing of noncompliant plants (those which contain more than 0.3 percent THC).
• Compliance provisions, including the random sampling of producers.
• Procedures for handling violations.

Over 500,000 acres of hemp were cultivated in the U.S. this year. The continued demand for CBD products and the federal seal of approval for hemp production as codified in the USDA rules may only make hemp a more appealing crop here in Michigan and throughout the country.

Kreis Enderle: Michigan Cannabis Industry Attorneys

At Kreis Enderle, we help participants and those who wish to become part of Michigan’s cannabis and hemp industries to move forward with their businesses with confidence and clarity. Our cannabis law attorneys constantly stay abreast of developments in the evolving legal landscape and work closely with our clients to keep them informed and ahead of those changes. Additionally, Kreis Enderle brings a wealth of diverse banking experience and capabilities to the representation of cannabis industry clients.

If you have questions related to the new USDA rules or hemp cultivation and distribution, please contact one of Kreis Enderle’s marijuana law attorneys at (800) 535-4939 to arrange for a consultation.