USDA Issues Interim Final Rule on Hemp Production – Here’s What It Means

Finally, the wait is over. 

Last week, the United States Department of Agriculture (USDA) issued its Interim Final Rule (IFR) on the establishment of a domestic hemp production program. This rule comes 10 months after the passage of the 2018 Farm Bill, which removed hemp from the Controlled Substances Act and made it federally legal to domestically grow and sell for the first time in over 40 years. The purpose is to establish the rules and regulations for hemp production in the U.S., as well as the provisions for the USDA to approve submitted plans. It also establishes a federal plan for hemp producers in states or territories of Indian Tribes that do not have their own USDA-approved plan.

“We are pleased to see the USDA deliver a very comprehensive IFR. We’re hopeful that this will encourage financial institutions to begin partnering with hemp and CBD companies and allow the industry to reach its potential,” said Brandon Beatty, CEO and founder of Bluebird Botanicals. 

The rule is 161 pages long. You can read the whole thing if you want. But if a little “light” legal reading doesn’t jive with how you’d planned to spend your evening, don’t worry -  that’s what we’re here for. Here’s Bluebird’s brief breakdown of the three most important provisions in the rule and what they mean for hemp manufacturers and consumers. 

2018 Farm Bill preemption

In the IFR, the USDA affirmed that the 2018 Farm Bill preempts state law. So, states that wish to create their own hemp production plan must enforce regulations at least as strict as the Farm Bill and the USDA federal plan. States could, however, regulate hemp even more stringently than the federal plan if they wish - in fact, they may make the production and distribution of hemp and hemp products outright illegal. However, states and native tribes may not prevent the movement of hemp through their states or territories even if they prohibit its production. 

State and tribal plans for hemp production

If a state or native tribe wants to have primary regulatory authority over hemp production within its territory, they must submit a plan for hemp regulation to the USDA for approval. This plan must meet a variety of requirements and receive approval prior to implementation. States and tribal plans must provide information on the land used for production, sampling, and testing for THC content, and plans for disposal of non-compliant plants. The states and tribal officials will also be responsible for conducting an annual inspection of all hemp producers within the state or territory.

The USDA is also working to establish a departmental governance plan for states or territories where the production of hemp is legal, but there is not an approved state or tribal plan in place. They will begin reviewing state and tribal plans and issuing licenses after the IFR is published in the Federal Register following the 60-day public comment period. 

Regulations on testing

The USDA is now requiring hemp testing laboratories to provide a “measurement of uncertainty” or margin of error when analyzing THC content. Remember that the federal definition of hemp stipulates that it must contain less than 0.3% THC to be legally cultivated and sold. Now, they’re allowing for small errors in calculations, acknowledging that they are inevitable in any testing procedure. As long as 0.3% falls within the range of the measurement of uncertainty or margin of error, the hemp product will be considered compliant.

Likewise, “laboratories must now use post-decarboxylation or other similarly reliable analytical methods where the total THC concentration level reported accounts for the conversion of delta-9-tetrahydrocannabinolic acid (THCA) into THC.” The total THC content, which combines THC and THCA, will be reported on a dry weight basis.  

The USDA will now require all labs to be registered with the DEA, as well as certified through either the Laboratory Approval Program (LAP) or ISO 17025. Hemp industry leaders are pushing back against the required DEA registration, though. Many feel that the DEA should not be involved in the testing process, and that regulation should remain strictly under the purview of the USDA. 

What’s next?   

There is currently a 60-day window for public comment on the proposed rules. You can submit comments on their official website now through December 30, 2019. Once the final rule is accepted and submitted to the Federal Registrar, it will remain in effect until November 1, 2021.