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Hemp is legal. Here comes the tricky part



This week, the US Department of Agriculture published formal federal guidelines on how hemp – the versatile cannabis variety used for clothing, plastics, fuel and food – can be grown, harvested, tested, processed, transported and sold. The USDA also established the US domestic hemp production program to regulate the cannabis plant.

"The industry has been waiting with gentle breath for these," said attorney Anita Sabine, who represents hemp, cannabis and CBD firms at the law firm of Manatt, Phelps & Phillips in Los Angeles. "They couldn't come soon enough."

The proposed regulations, published Thursday in the Federal Register of Public Comments, could serve as a boon to a burgeoning industry operating under a hodgepodge of state laws following the passage of past farm bills, in particular the 201
8 Farm Improvement Act that legalized hemp .

Under the new program, states and Native American tribes will have to submit for approval of hemp production plans that meet or exceed USDA standards. For those states and tribes that do not submit a plan, these federal guidelines will apply.

The USDA guidance addresses aspects, such as education in the interstate – states cannot prohibit it – and the acceptable levels of THC in hemp.

The federal guidelines should help lower operating and compliance costs for both hemp businesses and farmers, Sabine said. The uniformity can make those similar to hemp to the federally illegal cousin and have either steered away from working with hemp stores or tried to ban hemp products.

USDA standards help tie up some of the loose ends again from Farm Farm 2018 that legalized the cannabis variety containing no more than 0.3% of psychoactive tetrahydrocannabinol (THC).
Several farmers have turned to the crop as grain prices fall, trade wars worry about heat, climate change and cannabis laws change. In particular, hemp was seen as a cheaper means of producing the lucrative cannabidiol (CBD), the cannabis compound promoted for health and wellness benefits.
But the USDA guidelines still do not provide significant clarity in CBD – nor were they intended to do so. The superpopular extract that now exists in everything from sports drinks to Fido's food bowl remains under the US Food and Drug Administration, which is currently chewing on potential rules.

"We have this hemp CBD industry that has exploded," Sabine said. "[Products can be] cultivated in State A, extracted in State B, added to a State C product, completed in State D, and moved across state lines – all this without consumer assurance that the products have been tested to meet minimum standards. "

The USDA's rules should help establish some of that baseline while more FDA guidelines are expected," she added.

A surprise for some hemp growers and growers was the small wing space USDA provided for hemp growing. "hot," or exceeding the THC threshold of 0.3%, said Shawn Hauser, chair of the hemp and cannabinoid practice group at cannabis law firm Vicente Sederberg.

The USDA Regulation outlines a "measure of uncertainty" of plus or minus 0.06%; however, to be considered hemp and not federally illegal cannabis, 0.3% of THC must fall within this distribution. Labs testing the plants must be facilities registered with the Drug Administration, and plants that exceed the permissible threshold must be destroyed by a DEA agent.

"There is a lot of concern about whether there are enough registered DEA laboratories to meet the needs of the industry," Hauser said.

Hemp can grow hot by a variety of factors, including weather, soil and a farmer's inexperience in growing it. Some state hemp programs have offered remediation or corrective action versus immediate destruction.

"Any hot hemp will be a total loss to the farmer," she said.

The 60-day public comment period could allow growers and growers to weigh in on these and other conditions, she said. The USDA's provisional hemp final rule is valid from Thursday to November 1, 2021. Comments received prior to December 30, 2019 will be considered for the final rule.


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