Rosen Harwood Blog

USDA Final Rule on Hemp Production

USDA Updates Interim Rule and Publishes Final Rule for Hemp Production

The 2018 Farm Bill legalized the agricultural production of hemp and tasked the United States Department of Agriculture (“USDA”) with the promulgation of rules governing domestic hemp production. In October 2019, the USDA implemented an interim final rule covering the approval of state hemp production plans, as well as a federal plan to apply in the states that chose not to implement their own plan. The USDA implemented this interim final rule with plans to solicit feedback and comments from the public to assist in their drafting and implementation of a final rule. In January 2021, the USDA published a final rule on domestic hemp production, incorporating various public comments made on the interim rule. The USDA’s final rule on hemp production became effective March 22, 2021.

The USDA incorporated substantial changes in the final rule that ease the requirements on hemp producers. Notably, the USDA took into consideration the lack of domestic, Drug Enforcement Administration (DEA)-registered laboratories by delaying the requirement that all hemp sample testing be completed by one.[1] Moreover, several time periods on the sampling/testing timeline were extended. Threshold levels of THC, a contentious point in hemp production, were also modified in some instances to give producers more flexibility in their farming.[2] All in all, the USDA incorporated public comment in an attempt to make domestic hemp production easier, more efficient, and less time consuming in the final rule.

All of the changes below apply to both the state/tribal plan approval process and the federal “stand-in” plan unless noted.  The most significant changes include:

Sampling

One of the most substantial and anticipated changes the USDA made to the final rule concerns the sampling process of hemp plants. Under the hemp production context, “sampling” refers to the process of collecting cuttings from hemp plants for the purposes of compliance testing. Previously, samples had to be collected within fifteen (15) days of an anticipated harvesting, which presented serious logistical concerns for producers. The final rule doubled this time period to thirty (30) days, giving producers more time to schedule and execute a sampling visit prior to harvesting their crops, while still balancing with the fact that THC levels typically increase the longer a plant is in the ground.[3] Similarly, specific to the federal plan, producers must harvest their crop no later than thirty (30) days after the date of a sample collection.[4] The interim final rule placed a fifteen (15) day harvest window on producers post-sampling.

Another sampling concern that the USDA addressed in their final rule was the lack of detailed instructions on taking an effective sample. While still maintaining the requirement that samples be taken from the flower material of the plant, the final rule does contain detailed instructions on sampling, requiring that samples be collected “from the flowering tops of the plant by cutting the top five to eight inches from the “main stem” (that includes the leaves and flowers), “terminal bud” (that occurs at the end of a stem), ”or “central cola” (cut stem that could develop into a bud) of the flowering top of the plant.”[5] These detailed sampling instructions allow for less crop waste and more effective and consistent sampling.

Specific to the state/tribal plan approval process, the USDA’s final rule recognized the individuality of the hemp regulatory process by allowing states and tribes to develop and implement their own performance-based method of sampling that meets certain standards.[6] The alternative method must still adhere to a ninety-five percent confidence level of testing THC levels, but it does give states more freedom in sampling by allowing them to weigh factors such as seed certification, research purposes, producer history, and other similar factors.[7] As the USDA explained, a performance-based sampling method focuses on results and differs significantly from a prescriptive method “in which licensees are provided detailed direction on how those results are to be obtained.”[8]

Violations

Other major changes that the USDA implemented in the final rule concern violations under both the state and federal plans, specifically negligent violations. Under the interim final rule, the safe harbor provision for a negligent violation was a THC level of 0.5%, meaning a producer would not be liable for negligence if his crop exceeded the 0.3% THC limit, so long as it was still below a 0.5% level.[9] The USDA doubled this safe harbor limit in the final rule to 1%, meaning producers with crops over the 0.3% limit will still escape negligent liability as long as they remain under the 1% safe harbor provision.[10] While the crop still cannot be harvested if it is over the 0.3% limit, this safe harbor increase does provide additional protections to producers and gives them greater flexibility in learning how to grow compliant hemp. The final rule also limits the number of negligent violations a producer may receive in a given calendar year to one; the interim final rule did not contain any limit on the number of negligent violations a producer could receive, which risked overenforcement for producers who operate in multiple locations.[11]  

Testing

As mentioned above, the DEA-registration requirement for testing laboratories was one of the most debated points of the interim final rule. Under the interim final rule, all hemp testing laboratories were required to be registered with the DEA in order to comply with the Controlled Substances Act. Due to a low number of DEA-registered laboratories across the country, many commenters suggested removing this requirement altogether.[12] Also, because of this low number of DEA-registered laboratories and the subsequent strain it presented in the hemp testing process, the USDA had already delayed the requirement until 2020. However, the final rule maintains the provisions that require DEA registration in order to test hemp samples for regulatory compliance. Due to logistical concerns given the short harvest window period and current low number of DEA-registered laboratories, the final rule does extend the delay of this requirement until 2023.[13]

Disposal and Remediation

The final rule also includes new and improved provisions governing the disposal and remediation of non-compliant crops, i.e., crops that have a THC level of greater than 0.3%. Since any hemp plants that have a THC level of greater than 0.3% are technically classified as marijuana, the interim final rule commanded that they be disposed of in accordance with the Controlled Substance Act (CSA) and DEA regulations. The final rule clarifies what is a proper “disposal” and even offers for the remediation of non-compliant plants.

Instead of requiring all non-compliant plants be destroyed by approved “reverse distributors” authorized under the CSA and DEA regulations, the final rule allows disposal in the form of “plowing, tilling, or disking plant material into the soil; mulching, composting, chopping, or bush mowing plant material into green manure; burning plant material; burying plant material into the earth and covering with soil.”[14] Moreover, the final rule allows remediation of non-compliant plants in the form of discarding the flower and salvaging the remaining plant material or blending the entire plant into biomass material.[15] These updated provisions in the final rule cut costs associated with non-compliant plants and allow more efficient harvesting.

What Did Not Change

Most importantly, the THC limit for hemp did not change and remains at 0.3%. Hemp, as defined by the 2018 Farm Bill, “means the plant species Cannabis Sativa L. and any part of that plant . . . with a delta-9 [THC] concentration of not more than 0.3 percent.”[16] The new USDA final rule does not alter this definition at all, so the THC limit is—and will be for the foreseeable future—0.3%. Another notable provision that did not change is the requirement to test for “total” THC as opposed to only “delta-9” THC. The USDA received extensive input on this requirement from commenters; however, they decided to retain the requirement.[17] Similarly, despite the fact that many commenters believed whole-plant sampling should be allowed, the USDA is sticking with sampling that is focused on the flower material of the plant, albeit with more detailed instructions that are noted above.[18] Also, as noted above, the USDA decided to retain the requirement that all laboratories are DEA-registered in the final rule, although this requirement is delayed until 2023.

Conclusion

 The USDA’s final rule on domestic hemp production made several substantial changes to the interim final rule that provide clarity and flexibility to those seeking to start hemp production. Increased guidance on sampling requirements and violations provides easier to follow standards to properly take samples and steer clear of violations. Moreover, increases to harvesting windows and the negligence limit give producers more flexibility in how they grow their crops and when they harvest them. While the USDA did not incorporate many comments that were proposed from the hemp industry, their final rule was a step in the right direction for those seeking increased domestic hemp production.


[1] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. 5,602 (Jan. 19, 2021) (codified at 7 C.F.R. pt. 990.03).

[2] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,601.

[3] 7 C.F.R. § 990.3 (2021); Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,601.

[4] 7 C.F.R. § 990.26 (2021).

[5] 7 C.F.R. § 990.3 (2021).

[6]Id.

[7]Id.

[8] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,599.

[9] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,605.

[10] 7 C.F.R. § 990.6 (2021); 7 C.F.R. § 990.29 (2021).

[11]Id.

[12] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,602.

[13] 7 C.F.R. § 990.3 (2021).

[14] 7 C.F.R. § 990.1 (2021).

[15] 7 C.F.R. § 990.3 (2021); 7 C.F.R. § 990.27 (2021).

[16] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,597.

[17] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,602.

[18] Establishment of a Domestic Hemp Production Program, 86 Fed. Reg. at 5,601.

 

For further information or assistance with other hemp-related issues, please contact a member of our Agricultural Law team: 

Jane L. Calamusa

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