USDA Releases Final Rule For Hemp


by Rachel Meyer

rmeyer@mcgrathnorth.com
(402) 341-3070

On Friday, January 15, USDA published a final rule that provides regulations for the production of hemp (“Final Rule”). As our readers will recall, the 2018 Farm Bill directed USDA to establish a national regulatory framework for hemp production. In October 2019, USDA released an interim final rule (which we previously wrote about HERE), covering licensing requirements, recordkeeping requirements for maintaining information on the land on which hemp is produced, procedures for testing the THC concentration levels for hemp, procedures for disposing of noncompliant plants, compliance provisions (including annual inspections to verify compliant hemp is being produced), and procedures for handling violations.

Key Provisions

The Final Rule builds on the interim final rule with modifications based on public comments and lessons learned during the 2020 growing season.  Key provisions and changes in the Final Rule are highlighted below:

  • THC Limit: The THC limit for hemp remains at 0.3%.  Hemp with THC content in excess of this permitted limit is known as “hot hemp” and is classified as marijuana and a Schedule I controlled substance under the Controlled Substance Act.
  • Negligent Violations: The interim final rule provided that negligent violations of the interim final rule would not be subject to criminal enforcement, and specified that a producer would not negligently violate the interim final rule if plants tested between 0.3% – 0.5% THC. The Final Rule increases the standard of negligence from 0.5% to 1% THC, meaning that hemp that tests above 0.3% but below 1% THC will not be considered a criminally negligent violation (but will still need to be properly disposed of or remediated).
  • DEA-Registered Labs: The interim final rule required all hemp testing laboratories to be registered with the DEA. Based on comments to the interim final rule and in consultation with DEA, in February 2020 USDA announced a delay in enforcement of this requirement until October 31, 2021 or the publication of a final rule, whichever came first. The Final Rule, in recognition of the ongoing shortage of DEA-registered labs, further delays the requirement for labs to be registered by the DEA until January 1, 2023.
  • “Hot Hemp” Disposal/Remediation: The interim final rule required state and tribal plans to include procedures for ensuring effective disposal or remediation of “hot hemp”. The Final Rule provides alternative options for disposing of or remediating “hot hemp” and expands the disposal and remediation measures available to producers. Further detail on acceptable remediation techniques will be provided in a separate, forthcoming guidance document.
  • Harvest Window: The Final Rule expands the harvest window time from 15 days to 30 days after sampling is completed.
  • Hemp Products: Like the interim final rule, the Final Rule does not address processed hemp products, such as CBD (which we have written about HERE), and states that these products are regulated by FDA. FDA has taken the position that CBD is not a lawful food or dietary ingredient, and has been considering a regulatory pathway for use of CBD in foods and dietary supplements for quite some time. Note that based on a recent statement from the FDA commissioner, the regulatory framework for CBD products will likely continue to take a significant amount of time to develop, as FDA believes there are substantial safety gaps that need to be addressed.

Final Rule May Not Be Final

The Final Rule is set to take effect on March 22, 2021 and replace the interim final rule.  However, it remains to be seen whether the Biden Administration will keep the Final Rule. With President- Elect Biden’s inauguration set for later this week, the Final Rule may be frozen on his first day in office (as is customary of any new administration).

We are continuing to monitor developments in this area and will provide additional updates.  If you have any questions about this Alert, please contact Rachel Meyer or Sandra Morar.

Rachel Meyer
rmeyer@mcgrathnorth.com
(402) 633-6882

Sandra Morar
smorar@mcgrathnorth.com
(402) 341-3070

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