Legal Law

USDA Hemp Closing Rule: Hit and Fail

Earlier this month, the U.S. Department of Agriculture (USDA) announced the publication of its final ruling on hemp production in the Federal Register, which will take effect March 22, 2021. This final rule builds on the Interim Final Rules (IFR) published on October 31, 2019. It includes revisions based on three public comment periods, but also takes into account “lessons from the 2020 growing season”.

These hemp regulations contain six important provisions:

License requirements; Recording requirements; Method of testing the concentration of THC in the hemp plant; Procedures for disposing of non-compliant hemp (i.e. hemp that exceeds the acceptable THC threshold); Compliance regulations; and procedures for dealing with violations.

The main changes to the IFR relate to the procedures for checking THC levels and for disposing of non-compliant hemp. Below are the highlights.

Time of sampling. The USDA agreed with commentators’ concerns about the burden of the imposition of the crop within 15 days of sampling. As a result, the federal agency extended the test window within which hemp must be harvested to 30 days after sampling.

Where to taste from the plant. The final rule stipulates that samples must be taken from the flower material of hemp plants before harvest. The industry will be disappointed with this decision. Many advocated that “whole-plant” samples should be taken. However, the final rule contains more information than the IFR on where to cut the plant material. Specifically, the last rule provides that a cut 5 to 8 inches from (1) the “main stem” (including leaves and flowers, the (2) “terminal bud (occurs at the end of the stem) or (3) the” central cola ” (cut stem that can develop into a bud) the flowering top of the plants.

According to the USDA, this new standard strikes a fair balance between the need to collect a sufficiently large portion of the plant’s buds (where THC and other cannabinoids are most concentrated) and the need to avoid cutting such a large portion that it is logistically difficult would be to transport, dry and prepare laboratory tests. “

Sampling means. The USDA is working to release additional training resources for samplers to ensure consistency in sampling nationwide.

Acceptable THC threshold. In the final rule, the total THC limit is retained, which is the sum of delta-9 THC (THC) and THC acid (THCA). The total THC limit is problematic as this testing method tends to increase the concentration of THC in the hemp sample, making it difficult not to exceed the allowable threshold. Since few hemp genetics currently on the market would match a full THC testing method, this rule forces manufacturers to carefully select the types of seeds they buy from a limited sample.

Negligence threshold. Hemp growers must dispose of plants that exceed acceptable levels of THC. However, if the facility reaches the newly established negligence threshold of 1% or less (the USDA raised it from 0.5%), the manufacturers have not committed a negligent breach. Note that the final rule limits the maximum number of negligent violations a manufacturer can receive in one growing season to one.

Registration with DEA. In the final rule, the requirement that all hemp testing laboratories must be registered with the DEA is retained. Due to the limited number of laboratories registered by the DEA to test the expected hemp produced in 2020 and possibly 2021, the USDA persuaded the DEA to further delay enforcement of this requirement until January 1, 2022 (the original Delay extended to October 31st). 2020 or the publication of this final rule). The USDA continues to argue that this requirement is necessary because labs could potentially receive hemp that exceeds the approved THC threshold of 0.3% (i.e., marijuana).

Non-compliant hemp disposal. The final rule provides alternative disposal methods that do not require a DEA registered reverse distributor or law enforcement agency. You can find these alternative disposal methods here.

Approval of the state and tribal plan. Finally, the Closing Rule addresses the potential need for states and tribes to revise and resubmit their plans for approval to align them with the needs of the Closing Rule. The final rule also provides that states may continue to work until January 1, 2022 under the 2014 Farm Bill. While this option will further delay the establishment of a unified national cannabis program, it will give states more time to revise their plans and regulations and prepare breeders to comply with the final rule, which is a good thing.

Overall, the final rule contains improved provisions that propose a further step towards the full implementation of the Agriculture Act of 2018. Still, regulations like testing hemp plants in DEA-registered laboratories will inevitably be more of a headache for the industry. This is a shame given the numerous challenges that cannabis players have faced over the past two years.

At this point, we can only wish the Biden government, including the new Agriculture Minister, Tom Vilsack, who is believed to be the hemp industry’s advocate, to promptly review the final settlement and address the remaining issues that could further hamper the government’s growth and development promising industry. One possible way to do this would be for the USDA to reopen the rules for public comment, which seems plausible given the release of a White House memo last week and encouraging federal agencies to consider extending the comment deadlines for rules to draw that have been completed but have not yet entered into force.

Nathalie works from Harris Brickens Portland office and focuses on the legal framework for hemp-derived CBD products (“Hemp CBD”). It is an agency responsible for FDA Enforcement, Food, Drug & Cosmetic Act, and other laws and regulations pertaining to hemp and hemp CBD products. She also advises national and international customers on the sale, distribution, marketing, labeling, import and export of these products. Nathalie speaks frequently on these topics and has made national media appearances, including on the NPR marketplace. For two consecutive years, Nathalie was selected as a “Rising Star” by Super Lawyers Magazine, an honor given to only 2.5% of eligible lawyers in Oregon. Nathalie regularly writes articles for her company Canna Law Blog.

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