USDA Hemp Closing Rule: Hits and Misses

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USDA Hemp Final Rule: Hits and Misses

Last Friday, January 15, the U.S. Department of Agriculture (“USDA”) announced today’s release of its final hemp production rule on the Federal Register, which will take effect March 22, 2021. This final rule builds on the Intermediate Finals Rule (the “IFR”) published on October 31, 2019. It includes revisions based on three public comment periods (you can read more on this topic here and here), but also takes into account “Lessons from the 2020 growing season”. ”

These new hemp regulations contain six key provisions, including:

  1. License requirements;
  2. Recording requirements;
  3. Method of testing the concentration of THC in the hemp plant;
  4. Procedures for disposing of non-compliant hemp (i.e. hemp that exceeds the acceptable THC threshold);
  5. Compliance regulations; and
  6. Procedure for dealing with violations.

The main changes to the IFR relate to the procedures for checking THC levels and for disposing of non-compliant hemp. Below are the highlights.

1. Time of sampling

The USDA agreed with commentators’ concerns about the burden of the imposition of the crop within 15 days of sampling. As a result, the federal agency extended the time window for the hemp harvest to 30 days after sampling.

2. Sampling method

a. Where to taste from the plant

The final rule stipulates that samples must be taken from the flower material of hemp plants before harvest. The industry will be disappointed with this decision. Many advocated that “whole-plant” samples should be taken. Fortunately, the final rule contains more information than the IFR about where to cut the plant material. Specifically, the last rule provides that a cut 5 to 8 inches from (1) the “main stem” (including leaves and flowers, the (2) “terminal bud (occurs at the end of the stem) or (3) the” central cola ” (cut stem that can develop into a bud) the flowering top of the plants.

According to the USDA, this is the new standard

a fair balance between the need to collect a sufficiently large portion of the plant’s flowers (where THC and other cannabinoids are most concentrated) and the need to avoid cutting a portion so large that it would be logistically difficult to transport it, to find it; dry and prepare for laboratory testing.

b. Sampling means

The USDA is working to publish additional training resources for samplers to ensure consistency in sampling nationwide.

3. Acceptable THC threshold

The final rule maintains the total THC limit, which is the sum of the delta 9 THC (“THC”) and THC acid (“THCA”) levels. As we have discussed repeatedly on this blog, the total THC limit is problematic as this testing method tends to increase the concentration of THC in the hemp sample, making it difficult not to exceed the allowable threshold. Since few hemp genetics currently on the market would match a full THC testing method, this rule forces manufacturers to carefully select the types of seeds they buy from a limited sample.

4. Negligence threshold

Hemp growers must dispose of plants that exceed acceptable levels of THC. However, if the facility tests at or below the newly established 1% negligence threshold (thankfully the USDA increased it from 0.5%), the manufacturers have not committed a negligent breach. Note that the final rule limits the maximum number of negligent violations a manufacturer can receive in one growing season to one.

5. Registration with DEA

In the final rule, the requirement that all hemp testing laboratories must be registered with the DEA is retained. Due to the limited number of laboratories registered by the DEA to test the expected hemp produced in 2020 and possibly 2021, the USDA has persuaded the DEA to postpone enforcement of this requirement until January 1, 2022 ( the original delay has been extended to October 31, 2020 or the publication of this final rule). The USDA continues to argue that this requirement is necessary because labs could potentially receive hemp that exceeds the approved THC threshold of 0.3% (i.e., marijuana).

6. Non-compliant hemp disposal

The final rule provides alternative disposal methods that do not require a DEA registered reverse distributor or law enforcement agency. You can find these alternative disposal methods here.

7. Approval of the state and tribal plan

Finally, the Closing Rule addresses the potential need for states and tribes to revise and resubmit their plans for approval to align them with the requirements of the Closing Rule. The final rule also provides that states may continue to work until January 1, 2022 under the 2014 Farm Bill. While this option will further delay the establishment of a unified national cannabis program, it will give states more time to revise their plans and regulations and prepare breeders to comply with the final rule, which is a good thing.

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Overall, the final rule contains improved provisions that propose a further step towards the full implementation of the Agriculture Act of 2018. Still, regulations like testing hemp plants in DEA-registered laboratories will inevitably be more of a headache for the industry. This is a shame given the numerous challenges that cannabis players have faced over the past two years.

At this point, we can only wish that the Biden administration, including the new Agriculture Minister Tom Vilsack, will promptly address the remaining issues that could further hamper the growth and development of this promising industry.