The highly anticipated hemp rules were released by AMS this morning.  While the rules are 161 pages and a deep dive will take a longer time, some main issues jumped out on the initial first read.

One critical issue of concern was how THC levels will be measured to comply with the 0.3% level required by the 2018 Farm Bill.  According to the rules, USDA will mandate a test that takes into account not only the natural THC, but also the THCa such as with “post-decarboxylation or other similarly reliable methods.”[1] Under the regulations, THCa converts to THC at a defined rate of 87.7% when the hemp sample is heated or burned, and tests must take into account the total available THC, including THCa.  Since different states have different testing protocols (including various sampling, drying, and testing methods), different test results may occur from the same plant.  While USDA did not address this situation in the new rules by mandating a single test, they have created an ““acceptable hemp THC level” which will take into account the uncertainty of the tests.

To establish the “acceptable hemp THC level,”[2] USDA will include an “uncertainty measurement” along with the test results in determining whether a sample contains a permittable level of THC.  In the example that AMS provides in the new rules,[3] suppose that a laboratory report shows that a particular sample measures in at 0.35% (which is greater than the 0.3% allowed by statute), but the measurement of uncertainty is plus or minus 6% (+/- 0.06).  In this case, the distribution range really means that the THC level could be as low as 0.29% or as high as 0.41%, after taking into account the uncertainty of the test.  In this case USDA would allow the crop to be treated as hemp because 0.3% is within the measurement of uncertainty.  However, if you had the same sample that tested 0.35% and the measurement of uncertainty was only +/- 0.02 then the results would be between 0.33% and 0.37%.  In that case, the sample would be considered marijuana.

According to the regulations, plants that do not meet the definition of hemp must be collected and disposed of in accordance with the Controlled Substance Act.  This opens a potential problem area if samples that test over 0.3% THC can nevertheless be defined as industrial hemp under the regulations by falling within the “acceptable hemp THC level” as a result of the uncertainty measurement.  We may see litigation or legislation on this front at some point in the future because of the potential conflict between the 2018 Farm Bill and the new regulation on the “acceptable hemp THC level.”

Laboratories that intend to conduct THC tests may need to be approved by USDA- a final determination on the process is still under USDA consideration.  However, they must be registered with DEA as certified to test for controlled substances, because the samples they receive could qualify under the definition of marijuana if they test “hot.”[4]

AMS will not establish a federal certification system for hemp seeds because seeds that qualify as hemp when grown in one part of the country may test hot in another part of the country simply due to growing conditions.

The new rule also fleshes out other provisions of the 2018 Farm Bill including on issues such as the plan that states and tribes must submit for approval,[5] defining negligent violations for growers,[6] criminal background reports (the Farm Bill does not allow someone with a controlled substance conviction to obtain a license for ten years),[7] and further clarifies that states and tribes may not prohibit interstate transportation.[8]

There are many hurdles for the successful integration of industrial hemp into the US marketplace that are not controlled by AMS and therefore are unaffected by the release of the new regulations.  One major issue for industrial hemp is that the vast majority of the US crop is geared towards CBD production and the FDA still prohibits the addition of CBD into foods or dietary supplements.  This prohibition is not addressed in the release of the new regulations (in fact the 2018 Farm Bill specifically reserves FDA’s authority in this arena.)  FDA has not yet released regulations governing any changes in use.

Some of the other missing components needed for full scale commercial production include approved pesticides, which is under EPA jurisdiction, and crop insurance, which is administered by RMA (a separate sub-agency of USDA not affiliated with AMS).  While the release of the regulations pave the way for states and tribes to submit hemp plans for the 2020 growing season there are still a host of issues that will need to be resolved.

Expect a whole host of questions, articles and discussion points regarding industrial hemp in the coming days as the new rules also open up new questions.  For example, 7 C.F.R. §990.25 seems to require that samples are to be taken from the flower material of the plant.  The flower is where the highest concentrations of THC and THCa are found and by excluding other parts of the plant such as leaves or stalks you could see significantly higher test results depending on the sampling method. So where you cut your sample could make the difference between a hot sample and one that is permissible.  To view the AMS guidance document on sampling click here.  This is just one example of how the regulations will have a real-world impact on growers of a newly regulated crop.

Please contact Senior Staff Attorney Rusty Rumley with questions about this article.

 

Resources:

2018 Farm Bill Language

2019 Hemp Regulations

NALC Industrial Hemp Reading Room

NALC Compilation of State Industrial Hemp Statutes

Controlled Substances Act

USDA General Counsel’s Legal Opinion on the Authorities for Hemp Production

 

 

[1] 2018 Farm Bill Sec. 297B(a)(2)(A)(ii)

[2] 7 C.F.R. §990.1.

[3] Id.

[4] 7 C.F.R. §990.27.

[5] 7 C.F.R. §990.2.

[6] 7 C.F.R. §990.6(b).

[7] 7 C.F.R. §990.6(e).

[8] 7 C.F.R. §990.63.