USDA Ready to Issue Hemp Rules

OMAHA (DTN) -- USDA will detail its interim rules for hemp production on Tuesday after the White House approved the department's rules for regulating hemp production nationally.

USDA sent the rules to the White House Office of Management and Budget (OMB) for review in late June and OMB has been reviewing the rules ever since.

Farmers in some states have been growing hemp since the 2014 farm bill began allowing limited production under strict state oversight. The 2018 farm bill removed hemp as a federally controlled drug and allowed for national production of the crop. Still, the farm bill required USDA to create regulations for states and individual producers to follow. States can submit their plans for hemp production, or USDA can provide plans to farmers in state or tribes that do not intend to submit their own plans for oversight.

USDA is planning to have rules out this fall so states and growers can get ready for the 2020 planting season.

Farmers and lawmakers say USDA rules are needed because financial institutions in some situations right now are unwilling to do business with farmers growing hemp over fears of drug enforcement.

All but four states have passed laws allowing hemp production, but most states are still working on their rules or are waiting for USDA guidance before completing their rules. The four states without legislation allowing hemp production are Idaho, Mississippi, New Hampshire and South Dakota.

State plans must detail procedures and testing for Delta-9 tetrahydrocannabinal (THC) the chemical that produces intoxication in marijuana. Under the farm bill, THC in hemp is limited to 0.3%, on a dry weight basis. Regulators in some states that do not currently have hemp production have been waiting to see if USDA will issue guidelines specifying how sampling and testing must be done.

Testing and concerns the crop could test above the 0.3% level for THC is one of the biggest challenges facing hemp growers, especially when crossing state lines to deliver dry hemp. Arrests are common for hemp delivery because the crop looks and smells so similar to marijuana.

CoBank last week issued a report on some of the risks and regulatory hurdles facing hemp. Among the biggest issues is not so much the USDA rules but the outcome of FDA regulations on cannabidiol (CBD) products that have fueled the growth of hemp. CoBank and others have noted that CBD products are already widely available in food, beverages and dietary supplements even though they are still considered illegal under federal law. FDA has stated the agency is still trying to learn more about the safety of CBD products. FDA has noted that some products are being marketed with unproven medical claims. https://www.fda.gov/…

CoBank noted in its report CBD prices range from $3 to $5 per percentage point of concentration. A hemp crop yielding 10% CBD and 2,000 pounds of dry material an acre can generate $60,000 to $100,000 an acre in gross revenue.

CoBank also looked at some of the pros and cons of growing hemp for fiber and grain or seed. https://www.cobank.com/…

DTN highlighted some of the issues involving hemp earlier in October. https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(CZ/ES)

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