USDA Releases Hemp Industry Draft Rules

Federal officials at the United States Department of Agriculture have released a set of draft rules for the industrial hemp industry. The regulations will dictate hemp industry growing practices, THC limitations and testing standards, and outline the appropriate methods for disposing of crops that don’t meet federal standards.

Once the rules are finalized — note that, for now, they remain subject to change — the USDA will be able to begin the review and approval process for individual states’ hemp programs.

The proposal is currently available for public comment and is expected to officially appear in the Federal Register later this week; the rules will take effect initially for two years. The White House issued its approval of the proposed regulations earlier this week before the draft rules were made public.

“The USDA has established a regulatory framework that will serve as an infrastructure for the U.S. hemp economy,” said Shawn Hauser of the Colorado hemp and cannabinoids law firm Vicente Sederberg.

“While the hemp industry has seen incredible growth since the passage of the 2014 farm bill, it has been stifled by the lack of federal regulation. The establishment of federal regulations governing hemp as an agricultural crop is a watershed moment for the entire cannabis industry.” — Hauser, partner and chair at Vicente Sederberg, in a press release

Industrial hemp was federally legalized at the close of 2018 following the successful passage and signing of the 2018 Farm Bill, meaning the crop has been legal for 10 months so far without rules or regulations addressing the industry at the federal level. The legalization effort was a bipartisan push spearheaded by Senate Majority Leader Mitch McConnell (R-Kentucky).

Since then, hemp farmers and hemp-based businesses like CBD product manufacturers have been operating more or less in the dark about the industry’s future. The USDA noted that CBD companies are still awaiting draft rules from the Federal Drug Administration (FDA) as well.

“If FDA does not provide clarity about their plans for future regulation of CBD, there will continue to be uncertainty and downward pressure on the CBD portion of the hemp market,” the agency’s rules proposal warns.