On January 15, 2021, the USDA released the final iteration of the Final Rule For Domestic Hemp Production. The Final Rule was published in the Federal Register on January 19, 2021. One day before President elect Biden was sworn in as President.
Hemp producers have been operating under the rules of the Interim Final Rule since October 2019. During that time, the USDA followed and learned from a year of growing and production and considered 5,900 public comments.
The Final Rule released on January 15th finalizes the regulations for Hemp Production in the U.S. based on those observations. This Final Rule includes a few changes from the Interim Rule and is set to take effect on March 22, 2021.
Five days later, on January 20, 2021, Joe Biden was sworn in as the new President. On that same day, the White House issued a memo to federal agencies implementing a “Regulatory Freeze Pending Review”.
We have a new administration and that means any regulations introduced by the previous administration, that have not yet become effective, will be under new scrutiny. And that's exactly what's happening with the Final Rule for hemp production.
First, let’s take a quick look at the Final Rule for Domestic Hemp Production. What are the final regulations it establishes, and how do they differ from the Interim Final Rule?
The Interim Final Rule (ultimately the Final Rule) for Hemp Production.
The 2018 Farm Bill (Agriculture Improvement Act of 2018) mandated the establishment of the Domestic Hemp Production Program. It tapped the Agricultural Marketing Service (AMS) to create the regulations for hemp production and administer the program. The Interim Final Rule established the initial rules for the program and would eventually become the Final Rule.
The Hemp Production Program outlines all the guidelines for federal agencies and growers for the production of hemp.
- Set the allowable level of THC at 0.3%
- Established requirement for testing THC in hemp plants.
- Outlined appropriate disposal of non-compliant plants testing above 0.3%.
- Established licensing requirements for producers.
- Established requirement for keeping records and information about the property where hemp is being grown.
- Established requirements for Hemp Production program compliance.
But, of course, there were changes. And many of them for the better.
The Final Rule includes a few updates from the Interim Rule.
- Increased the sampling window.
- Increased the negligence threshold from 0.5% to 1%.
- Created more flexibility for disposal of “hot hemp”.
Methods described by the USDA include plow under, disking, mulching/composting, a bush mower or chopper, deep burial, and burning.
Disposal no longer requires a distributor registered with the DEA or law enforcement.
- Established a new option for “Remediation”.
This means producers can choose to remediate non-compliant hot hemp by “removing and destroying flower material, while retaining stalk, stems, leaf material, and seeds”. They can also choose to “blend” the plant in its entirety into a biomass plant material.
Things that did not deviate from the Interim Rule in the Final Rule For Domestic Hemp Production.
- The allowable level of THC is still 0.3%.
Industry advocates argued for the THC level to be increased to 1% during the open commenting periods, but to no avail. The USDA’s job is to enforce the law, not to revise it.
Hemp was defined, and written into law in the 2018 Farm Bill, which removed hemp from Schedule l of the Controlled Substance Act.
The 2018 Farm Bill defines hemp as “Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
Since hemp’s THC limits were established under the law, they cannot be changed through regulation.
- Testing labs must still register with the DEA.
Then the new administration came in.
On January 20, 2021, the White House submitted a memo calling for a temporary hold on any rules that have yet to be published or become effective, to allow for more review.
This is common for any new administration to review new or pending regulatory actions.
The memo instructed federal agencies not to propose or issue any rule, or send any rule to the Office of the Federal Register (OFR) until the administration's new appointees had time to review or approve the rule.
The memo went on to outline procedures for any rule that had already been published in the Federal Register, but had not yet become effective. The Final Rule for the Domestic Hemp Production fits this category. The USDA published the Final Rule on January 15, 2021, but it is not effective until March 22, 2021.
For these rules, the White House Memo asks that they “consider postponing the rules’ effective dates for 60 days from the date of this memorandum.” It also asked that they consider allowing an additional 30 period for comments from interested parties.
Upon review, after the 60 day delay in effective date, if there are no “substantial questions” the rule will go into effect as planned.
Could the review period benefit the Hemp Final Rule?
However, if there are questions, agencies will notify the Office of Management and Budget and suggest rules they believe should be omitted from the directive. The OMB will review the suggestions and determine if the rules should be omitted.
Many reported that the administration put the Final Rule for U.S. Domestic Hemp Production Program on hold for 60 days. In reality, it put any rule that is not yet effective on hold.
But keep in mind, this memo was dated January 20th, and requested a 60 day hold from the date of the memo. The Final Rule for Hemp Production is set to become effective on March 22, 2021.
This means that as long as there are no problems, it will still go into effect on time.
Many hemp advocates would like the USDA to open another 30 day comment period. It is another chance to make their arguments with new department heads and appointees before the rule truly becomes final.
In addition, President Biden nominated Tom Vilsack to once again serve as U.S. Secretary of Agriculture. Vilsack has a reputation as being a strong supporter of the hemp industry. Could this mean more funding for hemp farmers?
Is this “hold” on the Final Rule for Hemp Production going to be a problem? Will review by the Biden administration result in “substantial questions”? Or will it bring about revisions for the better?
Feel free to weigh-in in the Comments Section below! We’d love to hear your thoughts on the matter.