Business

CBD Biz Relieved as USDA Extends Hemp Pilot Plan

By Willis Jacobson Oct 2, 2020
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Willis Jacobson is an award-winning journalist whose career has spanned both coasts. Now based on the Central Coast of California, he has covered cannabis news and issues since 2015.
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Willis Jacobson is an award-winning journalist whose career has spanned both coasts. Now based on the Central Coast of California, he has covered cannabis news and issues since 2015.
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States will have more time to develop their hemp regulations, thanks to a resolution the U.S. Senate passed this week to avoid a government shutdown.

Included in the bill is language drafted by the House to extend the U.S. Department of Agriculture’s hemp pilot program through September 2021. The 2018 Farm Bill, which legalized hemp and CBD nationally, included a deadline of Oct. 31, 2020, for states to submit final plans to the USDA for how they would regulate their hemp markets.

About 30 states have not yet submitted such plans. Those who missed this year’s deadline were set to become subject to the USDA’s set of rules, which some operators have denounced as too restrictive. The pilot program, first introduced in the 2014 Farm Bill, is less restrictive.

Operators and advocates within the industry pushed for the extension, arguing it is particularly appropriate amid the COVID-19 pandemic, which has slowed some government processes. Patrick Atagi, board chairman of the National Industrial Hemp Council (NIHC), was among those who celebrated the move.

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“We’re thankful for both the House and the Senate for listening to us back in August when we wrote about the importance of this program,” he said in a statement issued by the NIHC. “With [this extension], hemp farmers across the country will have more certainty tomorrow while states continue their important work to submit final plans to the USDA for approval.”

While this week’s extension was primarily a procedural move, Fortis Law Partners attorney Henry Baskerville, who represents clients in the industry, said he was hopeful the added time would bring about more regulatory clarity both from and among government agencies.

The USDA took over as the hemp industry’s primary regulator with the passage of the 2018 Farm Bill. That role had previously been held by the U.S. Drug Enforcement Administration.

Despite that apparent shift in hierarchy, the DEA is still very much involved in the industry.

The DEA drew criticism from many within the industry, as well as litigation, when it issued an interim final rule this year that appears to take the position that any hemp that contains more than 0.3% THC – a limit established by the Farm Bill – is a federally illegal substance, the same as marijuana, and therefore within the DEA’s jurisdiction for prosecution. 

The problem with this, according to many within the industry, is that hemp extracts commonly surpass the 0.3% threshold during manufacturing before they return below that limit in preparation for retail.

Baskerville said the hemp industry should be concerned about any attempt from the DEA to “claw” its way back into jurisdiction it previously lost. The USDA, he said, was established to support farmers and agricultural endeavors, and the agency presents a stark contrast from the DEA, a law enforcement agency, when it comes to regulating.

“If you get sideways with the DEA, then your facility gets raided by guys with guns and bullet-proof vests,” he said. “That doesn’t happen with the Department of Agriculture.”

Clearing up confusion about the roles of the two agencies should be paramount during the extension, he said.

While this latest move gives states more time to harmonize their rules with the federal guidelines, members of the public are still able to weigh in on the USDA’s interim final rule. In September, the agency reopened the comment period through Oct. 8, a move encouraged by industry backers.

The DEA’s interim final rule regarding hemp, which went into effect Aug. 21, is also open for comment through Oct. 20. 

Baskerville said he was hopeful both agencies would have clearer direction in their final rulings.

“To the extent that the DEA is trying to provide more clarity, I think that’s a good thing,” he said. “I just want to make sure that they are drawing the boundary in the right place.”

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