USDA Releases Interim Final Hemp Rules

Jill Cacic
November 7, 2019
Read Time: min

The 2018 Farm Bill started the process of hemp legalization when it was signed into law back in December 2018, but there was still work to be done before the production and cultivation could be seen as fully legal. A main component required the U. S. Department of Agriculture (USDA) to produce a plan regarding the regulation of the production and cultivation of hemp.

What is included in the USDA hemp rule?

The USDA released their interim final rule establishing a domestic hemp production program at the end of October, requesting comments through the end of 2019 before finalizing the rule. The rules dictate that hemp will be removed from the CSA as long as it has levels of delta-9 tetrahydrocannabinol (THC), the psychoactive ingredient that gets a user high, that are less than 0.3%.

The rule establishes the required licensing agreements for hemp production, which include maintaining information on the land used for production, procedures for testing the THC concentration levels, procedures for disposing of non-compliant plants, and procedures for handling violations.

With the rule published, it opens the door for states and Indian tribes to create and submit their own programs to regulate hemp production in their jurisdictions. The plans created by states and tribes must address the core components included in the USDA’s rule.

It can be tough to weed through the challenges of banking (or avoiding) cannabis-related businesses.
we can help

What do states need to include in their hemp programs?

The USDA rule includes the following requirements:

  • Farmers must submit relevant information regarding the land used for hemp production to the USDA Farm Service Agency (FSA). It should include a legal description of the land, hemp crop acreage, and “geospatial location of each field, greenhouse, or other site where hemp is produced,” according to the rule. States will need to retain these records for three years.
  • Samples of the hemp crop must be submitted to a DEA-registered lab for THC testing within 15 days of harvest. This does include a measurement of uncertainty (MU) which allows for “acceptable hemp THC levels” to account for uncertainty in test results.
  • If the results show the crop has over 0.3% THC levels or outside the test lab’s margin of error, it must be properly disposed. The disposal must also be documented. Farmers will not be penalized for having crops with greater than 0.3% THC levels as long as they dispose of them and are making efforts to grow hemp.
  • The governing body (states, tribes, or the USDA) must complete an annual inspection of hemp producers to ensure their property and crops remain in compliance.
  • The rule also mandates information sharing of approved or licensed hemp growers. States must report their contact information to the USDA within 30 days of their application.
  • The rule requires states or tribes to have adequate staffing to handle the increase in regulatory work.
  • The rule also allows for interstate commerce of hemp, as long as it follows all of these guidelines

Timeline for states to submit hemp programs

The USDA is allowing time for states and tribes to submit their programs before accepting applications for hemp production. States and tribes may begin submitting their programs for approval. Those programs can contain more regulations than those outlined in the USDA rule. The USDA must approve state and tribal plans before implementation. They have 60 days to review plans. If a state does not submit a plan, the USDA rule will be the default guidelines. A state may also choose to prohibit hemp farming.

Once state and tribal programs have been submitted and approved or denied, potential hemp growers will be allowed to apply for a license through either their state or the USDA, if their state does not create a program. The USDA will begin accepting applications for licenses on November 30. Licenses must be renewed every three years.

About the Author

Jill Cacic

Jill is a senior public relations specialist at Abrigo.

Full Bio

About Abrigo

Abrigo is a leading technology provider of compliance, credit risk, and lending solutions that community financial institutions use to manage risk and drive growth. Our software automates key processes — from anti-money laundering to fraud detection to lending solutions — empowering our customers by addressing their Enterprise Risk Management needs.

Make Big Things Happen.

 

Looking for Banker’s Toolbox? You are in the Right Place!

Banker’s Toolbox is now Abrigo, giving you a single source for all your enterprise risk management needs. Use the login button here, or the link in the top navigation, to log in to Banker’s Toolbox Community Online.

Make yourself at home!