Part 3: US Department of Agriculture Publishes Interim Final Rule on Domestic Hemp Production


Part III

This article is the third in a three-part series discussing the United States Department of Agriculture's (USDA) Interim Final Rule on the establishment of a domestic hemp production program recently published in the Federal Register (Rule).

Perhaps recognizing the potential uncertainty in hemp production, the Rule makes clear that hemp producers do not commit a negligent violation of the Rule if they produce plants that exceed the acceptable hemp THC concentration level, as long as producers use reasonable efforts to grow hemp and the plants do not have a THC concentration that exceeds 0.5% on a dry weight basis. The Rule states that the USDA "recognizes that hemp producers may take the necessary steps and precautions to produce hemp, yet still produce plants that exceed the acceptable hemp THC level."

However, plans are required to prohibit any person convicted of a felony related to a controlled substance under State or Federal law before, on, or after the enactment of the 2018 Farm Bill from participating in the State or Tribal plan and from producing hemp for ten years following the date of conviction. An exception applies for a person who was lawfully growing hemp under the 2014 Farm Bill before December 20, 2018, and whose conviction occurred prior to that date.

The Rule also requires plans to contain procedures for reporting information to the USDA separate from the requirement to report crop acreage discussed earlier in this series (Part 1 and Part 2).  This information includes contact information for each hemp producer and/or the business information for business producers. Additionally, plans must contain a certification from the submitting State or Tribe that it possesses the resources and personnel necessary to effectively administer the plan.  Plans that are rejected may submit an amended plan or request reconsideration.  All plans must be approved by USDA before they can be implemented.

As discussed in a prior article States or Tribes that do not wish to submit a plan will be governed by the USDA plan.  The provisions of the USDA plan are similar to the requirements for State and Tribal plans however producers must apply directly to the USDA for a license to produce hemp.  The USDA will begin accepting applications from producers thirty days after the effective date of the Rule to allow States and Tribes to submit their plans for approval.

Since the USDA will not issue hemp production licenses to producers located in States or Tribal Nations who have submitted a plan to the USDA for approval, potential producers who intend to submit an application for a production license to the USDA should determine whether their jurisdiction has submitted a plan for approval. If not, a potential producer should carefully review the USDA plan outlined in the Rule. With the publication of the Rule, State and Tribal governments, as well as individual producers, will now have a better understanding of the federal requirements regarding hemp production.

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