CBD users, hemp farmers, and processors can finally breathe a collective sigh of relief after the USDA finally released the much-anticipated hemp regulations. On Tuesday, the US Department of Agriculture released draft rules for hemp production and said it would soon begin accepting state regulatory plans for the newly legal crop.
The long-awaited interim final rule will be published in the Federal Registry by the end of this week, followed by a 60-day comment period. Once the rules are finalized, states and tribes will be able to submit their regulation plans to the USDA for evaluation. Any jurisdictions that don’t send proposals will fall under the department’s general guidelines for producing hemp, legalized at the federal level by the 2014 Farm Bill.
“At the USDA, we are always excited when there are new economic opportunities for our farmers,” said USDA Secretary Sonny Perdue in a press release, “and we hope the ability to grow hemp will pave the way for new products and markets.”
“We have had teams operating with all hands on deck to develop a regulatory framework that meets Congressional intent while seeking to provide a fair, consistent, and science-based process for states, tribes, and individual producers who want to participate in this program.”
According to the USDA, after the regulations are finalized, it will make a determination about state or tribal plan applications within 60 days of their submission. Jurisdictions that submit applications to process hemp under the USDA guidelines instead of their own rules will be reviewed within 30 days. The interim rule will terminate after a few years, after which the USDA will issue final regulations.
The news has been met with celebration from multiple lawmakers and industry stakeholders. “There has been an undeniable sense of progress that comes with reading federal regulations for hemp farming in the U.S., something that was outlawed for decades, which so many people fought to achieve,” said Shawn Hauser, partner and chair of the hemp and cannabinoids practice group at Vicente Sederberg LLP.
However, she said that many people would be disappointed to see the stringent enforcement provisions related to concerns about hemp exceeding the legal THC limit. “For example, the rules require the disposal of ‘hot hemp’ by a federal agent, even if there are reasonable options to remediate it and avoid loss of the crop. These provisions feel like relics of prohibition and come at a risk and expense to farmers, but they do not come as a surprise,” she said, adding that it takes time to transition from a prohibitionist to a regulatory model.
The news comes a few days after the White House Office of Management and Budget (OMB) finalized its review of the USDA’s interim final rule. Farmers will be eligible for a variety of federal agriculture programs once the regulations are finalized. Lawmakers are still pressuring the FDA for rules on CBD products. According to the FDA, the fact that CBD exists as an FDA approved drug and that it hasn’t been previously added to the food supply complicates the rulemaking process.
There is widespread agreement among analysts that the entire hemp industry, including actors like HTC Extraction Systems (TSX.V: HTC) and LiveWire Ergogenics Inc. (OTC: LVVV) should be closely studying the newly released interim hemp rules.
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