Americans are closer to seeing what a federally regulated hemp industry looks like today, after the U.S. Department of Agriculture (USDA) released its finalized regulations.
The final rule, announced on Friday, culminates a process that began soon after the passage of the 2018 Farm Bill, which legalized the production of industrial hemp in the U.S. From manufacturing to testing and disposal practices, the framework is designed to give guidance and structure to a market that is projected to reach $16.8 billion in sales by 2025, according to Brightfield Group.
The new rule was published in the Federal Register today and will take effect on March 22.
“With the publication of this final rule, USDA brings to a close a full and transparent rule-making process that started with a hemp listening session in March 2019,” said USDA Marketing and Regulatory Programs Under Secretary Greg Ibach in a press release. “USDA staff have taken the information you have provided through three comment periods and from your experiences over a growing season to develop regulations that meet Congressional intent while providing a fair, consistent, science-based process for states, tribes and individual producers. USDA staff will continue to conduct education and outreach to help industry achieve compliance with the requirements.”
The rule requires hemp to be tested at Drug Enforcement Administration (DEA) certified laboratories, a provision that met resistance from Oregon’s two senators when it was announced in July. However, enforcement has been delayed until December 31, 2022.
Lawmakers and industry advocates were also denied another request: under the new rule, crops will continue to be tested for total THC content — rather than delta-9 THC specifically. Yet they won a victory in having greater leeway with regards to excess THC content, which has been raised to 1% rather than 0.5%. The legal threshold for industrial hemp remains less than 0.3% THC, but the change in rule now allows for farmers to destroy non-compliant crops themselves (or use in other applications) rather than require them to use a DEA-designated provider.
A change in the actual portion of the plant used in crop testing could also make a material impact. Under the new rule, samples may be taken from five to eight inches from the flowering top of the plant.
“Agricultural Marketing Service (AMS) determined that this standard strikes an appropriate balance between the need to collect a sufficiently large portion of the plant’s flower (where THC and other cannabinoids are at their most concentrated), and the need to avoid cutting a portion that is sol large that it would be logistically difficult to transport, dry and prepare for lab testing,” the report stated.
However, the USDA’s purview does not extend to the regulation of hemp and CBD-infused products themselves, which is the responsibility of the U.S. Food and Drug Administration (FDA). The agency is currently reviewing data regarding ingredient safety with the aim of establishing a framework that allows such products to be sold as dietary supplements.
According to a press release, since the interim final rule was published to the Federal Register in October 2019, the USDA received around 5,900 comments from members of the public during the three feedback periods.
In a reaction piece posted on the firm’s Cannabis Law blog, Nathalie Bougenies of Harris Bricken LLP wrote that in total the final rule “contains improved regulations that suggest another step towards full implementation of the 2018 Farm Bill. Nevertheless, regulations such as the testing of hemp plants using DEA-registered labs are bound to cause more headaches for the industry. This is a shame given the numerous challenges with which hemp stakeholders have been faced for the past two years.”
In an email to BevNET, Johnathan Miller, general counsel for the U.S. Hemp Roundtable, wrote: “We are very pleased to see that the USDA’s Final Rule incorporated so many of the concerns raised by industry about the interim rules. There are several areas that could use some improvement, and we look forward to working with the Vilsack Administration, which has made clear to us during the transition that they are looking out for the hemp industry’s interests.”