USDA announces interim final rule for U.S. hemp production

Federal agriculture officials on Tuesday announced a domestic hemp production program, a highly-anticipated development for U.S. farmers aiming to capitalize on the growing demand for cannabis-based products containing negligible amounts of THC.

The publication of an interim final rule later this week paves the way for states and Indian tribes to submit plans to USDA for approval to oversee the production of hemp. USDA has 60 days to review the submitted plans, and if a plan is rejected, the agency will identify the deficiencies in a letter to the state or Indian tribe.

The plans must address such key issues as tracking the land where hemp is grown, testing concentration levels of THC, disposing of noncompliant plans and sharing information with law enforcement.

Per federal law, hemp cannot contain more than .3% THC—a threshold that has posed challenges for some farmers and been the subject of disparate state testing protocols.

USDA intends to publish an interim final rule Oct. 31 in the Federal Register, which becomes effective immediately upon publication. In addition to outlining provisions for USDA to approve hemp production plans submitted by states and Indian tribes, the interim rule creates a federal plan for producers in states or Indian tribes that lack their own USDA-approved plan.

States can prohibit hemp production within their borders, but they are not allowed to impose requirements that are less restrictive than the federal program.

“At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets,” Agriculture Secretary Sonny Perdue said in a news release. “We have had teams operating with all hands-on-deck to develop a regulatory framework that meets Congressional intent while seeking to provide a fair, consistent, and science-based process for states, tribes and individual producers who want to participate in this program.”

Hemp production in the U.S. has exploded in recent years, especially after Congress removed hemp from the Controlled Substances Act in the 2018 Farm Bill. In 2019, the number of acres of hemp licensed across 34 states exceeded 511,000, according to Vote Hemp, a grassroots organization in the nation’s capital. That’s more than quadruple the number of acres of hemp licensed in 2018, the nonprofit organization announced in September.

During a press conference Tuesday, a USDA official suggested farmers’ experience this fall harvesting, handling and identifying buyers will influence whether the industry grows or slows down. The agency has cautioned producers to ensure they have a relationship with a reliable producer or end user that would buy the hemp at the end of the crop year.

“The USDA’s issuance of federal hemp regulations represents a major agricultural, economic and environmental milestone for our country," Shawn Hauser, partner and chair of the hemp and cannabinoids practice group at the law firm Vicente Sederberg LLP, said in a statement. "Because it is one of the most versatile and sustainable crops on Earth, hemp holds significant promise not only for farmers, manufacturers, and consumers, but also for our planet. This is an exceptionally important development, and its historical significance truly cannot be overstated."

USDA's "new policy will help farmers around the country continue pioneering this crop into the 21st century," Sen. Majority Leader Mitch McConnell, the Republican from Kentucky who spearheaded efforts to legalize hemp in 2018, said Tuesday on the Senate floor. 

But he noted Congress's "work to support the future of hemp is hardly over." 

"There are ongoing conversations with the FDA on CBD products," McConnell said, as well as continuing "work to help growers and retailers ... access credit and financial products."