USDA Publishes Final Rule For The Domestic Production Of Hemp

DISTRICT OF COLUMBIA:  The U.S. Department of Agriculture (USDA) today announced the final rule regulating the production of hemp in the United States. The final rule incorporates modifications to regulations established under the interim final rule (IFR) published in October 2019. The modifications are based on public comments following the publication of the IFR and lessons learned during the 2020 growing season. The final rule is available for viewing in the Federal Register and will be effective on March 22, 2021.

“With the publication of this final rule, USDA brings to a close a full and transparent rule-making process that started with a hemp listening session in March 2019,” said USDA Marketing and Regulatory Programs Under Secretary Greg Ibach. “USDA staff have taken the information you have provided through three comment periods and from your experiences over a growing season to develop regulations that meet Congressional intent while providing a fair, consistent, science-based process for states, tribes and individual producers. USDA staff will continue to conduct education and outreach to help industry achieve compliance with the requirements.”

Key provisions of the final rule include licensing requirements; recordkeeping requirements for maintaining information about the land where hemp is produced; procedures for testing the THC concentration levels for hemp; procedures for disposing of non-compliant plants; compliance provisions; and procedures for handling violations.

Background: 

On Oct. 31, 2019, USDA published the IFR that provided specific details on the process and criteria for review of plans USDA receives from states and Indian tribes regarding the production of hemp and established a plan to monitor and regulate the production of hemp in those states or Indian tribes that do not have an approved state or Tribal plan.

The IFR was effective immediately after publication in the Federal Register and provided a 60-day public comment period. On Dec. 17, 2019, USDA extended the comment period until Jan. 29, 2020, to allow stakeholders additional time to provide feedback. USDA re-opened the comment period for 30 days, from Sept. 8 to Oct. 8, 2020 seeking additional comments from all stakeholders, especially those who were subject to the regulatory requirements of the IFR during the 2020 production cycle. In all, USDA received about 5,900 comments.

On Feb. 27, 2020, USDA announced the delay of enforcement of the requirement for labs to be registered by the Drug Enforcement Administration (DEA) and the requirement that producers use a DEA-registered reverse distributor or law enforcement to dispose of non-compliant plants under certain circumstances until Oct. 31, 2021, or the final rule is published, whichever comes first. This delay has been further extended in the final rule to December 2022.

The Agriculture Improvement Act of 2018 (2018 Farm Bill) directed USDA to issue regulations and guidance to implement a program for the commercial production of hemp in the United States. The authority for hemp production provided in the 2014 Farm Bill was extended until January 1, 2022, by the Continuing Appropriations Act, 2021, and Other Extensions Act (Pub. L. 116-260) (2021 Continuing Appropriations Act) allowing states and institutions of higher education to continue to grow or cultivate industrial hemp at certified and registered locations within the state for research and education purposes under the authorities of the 2014 Farm Bill.

More information about the provisions of the final rule is available on the Hemp Production web page on the Agricultural Marketing Service (AMS) website.

Virginia Governor Northam Announces Industrial Hemp Company to Locate In Rockingham County

Governor Northam Announces Industrial Hemp Company to Locate in Rockingham County

VIRGINIA:  Governor Ralph Northam today announced that Shenandoah Valley Hemp, LLC dba Pure Shenandoah will invest nearly $3.3 million to establish an industrial hemp fiber processing and cannabidiol (CBD) oil extraction facility in the historic Casey Jones building in the Town of Elkton. The company will create 24 new jobs and has committed to purchasing 100 percent of its industrial hemp from Virginia growers, resulting in nearly $5 million in payments to Virginia farmers over the next three years. Pure Shenandoah will become the first participant in the Virginia’s Finest trademark program to source the hemp used in its products exclusively from the Commonwealth.

“Virginia’s industrial hemp industry continues to experience tremendous growth, creating a wealth of opportunity across our Commonwealth,” said Governor Northam. “Projects like this one are an important part of diversifying our economy and developing new markets for industrial hemp. Our administration remains committed to supporting growers and processors as we work to ensure this crop has a sustainable future in Virginia.”

Pure Shenandoah operates as a vertically integrated “seed to sale” company providing customers with safe and consistent hemp products of the highest quality. This includes strict regulatory control of crops, the application of certified good manufacturing practices, and complete traceability of each product back to the seed and farm from which it came.

“Pure Shenandoah is a great example of the many ways we are able to help innovative, agriculture-based companies grow and thrive in the Commonwealth,” said Secretary of Agriculture and Forestry Bettina Ring. “I am pleased to see continued job creation and investment in Virginia’s industrial hemp industry and excited for the new market opportunities the industry is creating for our farmers.”

“Industrial hemp is gaining momentum across the country, and we are excited for Virginia to be a player in this up-and-coming industry,” said Secretary of Commerce and Trade Brian Ball. “Pure Shenandoah will provide quality jobs and enable the Commonwealth’s hemp growers to source extraction and processing within Virginia, further benefiting our economy and agricultural ecosystem.”

As part of its strategic marketing efforts, Pure Shenandoah is a participating member of the Virginia’s Finest® program. Created more than 30 years ago with more than 500 participating companies, this program helps consumers know they are purchasing top-quality Virginia-produced specialty food products whenever they see the classic blue and red VA check mark logo.

“We are honored to receive these funds and to work with such influential state programs that are helping push the industrial hemp industry forward in the Commonwealth,” said Pure Shenandoah CEO Tanner Johnson. “With this support, we will continue to educate and provide safe and effective products to consumers. We are excited to do our part and help expand the future of industrial hemp and all of its potential.”

The Virginia Department of Agriculture and Consumer Services (VDACS) and Virginia Economic Development Partnership (VEDP) worked with Rockingham County and the Rockingham County Economic Development Authority to secure this project for the Commonwealth. Governor Northam approved a $50,000 grant from the Governor’s Agriculture and Forestry Industries Development (AFID) Fund for the project, which Rockingham County will match with local funds. Funding and services to support the company’s job creation will be provided through VEDP’s Virginia Jobs Investment Program.

“Rockingham County is pleased with the announcement of 24 new jobs and the investment of $3.3 million in eastern Rockingham County,” said Chairman of the Rockingham County Board of Supervisors Bill Kyger. “This is a new and exciting industry that offers a great opportunity to diversify the agriculture base of the county for the future.”

“We should never forget or take for granted Virginia’s tremendous agricultural heritage and its economic viability that continues to push Virginia forward,” said Senator Emmett Hanger. “I am pleased the AFID funds will further promote industrial hemp and that Pure Shenandoah is committed to exclusively sourcing Virginia agriculture products for this project. Of course, there is no better county to partner with on this funding than the number one agricultural county in the Commonwealth, Rockingham County. We are proud of our deep agricultural roots here in Virginia and this economic announcement adds yet another facet to our diverse agriculture operations.”

Minnesota: Congressman Peterson Joins Smith, Craig and McCollum To Urge Federal Agencies To Clarify Hemp Rules

MINNESOTA: Representative Collin Peterson today jointed U.S. Senator Tina Smith (D-Minn.) and U.S. Representatives Angie Craig (D-MN 2), and Betty McCollum (D-MN 4) in calling on the leaders of four federal agencies to streamline hemp rules. Currently, contradictory federal guidelines are leading to uncertainty in the market and preventing Minnesota farmers and Tribes from fully reaping the economic benefits of growing hemp.

“The bipartisan 2018 Farm Bill legalized hemp in order to create economic opportunities for farmers. Minnesota farmers appreciate the United States Department of Agriculture’s (USDA) efforts in implementing the Interim Rule on Establishment of a Domestic Hemp Production Program. However, despite the Interim Rule there are still hurdles in place for Minnesota farmers to fully realize the economic benefits of growing hemp,” wrote the lawmakers in their letter to the United States Department of Agriculture (USDA), the Office of Management and Budget (OMB), the Food and Drug Administration (FDA) and the Drug Enforcement Administration (DEA).

Sen. Smith and Reps. Craig, McCollum and Peterson go on to identify some of the inconsistencies that need to be addressed: “The federal regulatory framework has proven to be inconsistent. For example, the USDA’s rule stated that farmers will be held accountable – facing possible revoking of their licenses – if their crops test above a .5 percent THC level three times in a five year period. Despite this somewhat onerous and arbitrary level, the Drug Enforcement Agency (DEA) instituted their own rule saying that exceeding .3 percent THC level deems the crop a controlled substance.

The burdensome competing rules don’t allow for remediation if the crop tests above the deemed inappropriate levels. Farmers should not be penalized for plants that they intended to grow as hemp, but for any number of reasons, the final THC numbers exceeded the arbitrary 0.3% THC level.  At the same time, the Food and Drug Administration (FDA) guidance on CBD is still pending at the Office of Management and Budget (OMB), which adds even more uncertainty to the marketplace.”

NIHC Receives USDA MAP Funding for International Research And Promotion Of Hemp

DISTRICT OF COLUMBIA: National Industrial Hemp Council today announced it received $200,000 in U.S. Department of Agricultural (USDA) Market Access Program (MAP) funding to support export market development of industrial hemp.

“We are grateful for USDA confidence and the recognition of NIHC as the industry leader in industrial hemp trade and marketing,” said Kevin Latner, NIHC’s Senior Vice President for Trade and Marketing who will be responsible for implementing the program.  “Today’s announcement makes NIHC a trusted partner to USDA for hemp fiber, feed, food and CBD companies looking to break down trade barriers in markets overseas.”

MAP funds are administered through USDA’s Foreign Agricultural Service (FAS). Through the MAP program, FAS partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities. These funds can be used for facilitating trade missions and meeting with industry stakeholders and government regulators overseas.

NIHC programs will focus on Europe and China and include market research, trade policy and trade facilitation.  The global industrial hemp and products market was estimated at $11.1 billion in retail sales in 2019.  With an annual growth rate of 52 percent, driven by continued strength in textiles, food and industrial uses and hemp-derived cannabidiol (CBD), the global market is forecast to be worth $89 billion by 2025.

Hemp for industrial use, textile and CBD market is expected to quickly expand and be the primary driver of global industry growth.  By 2021, the global trade of hemp is forecast $8.1 billion across all markets, representing a three-year compound annual growth rate (CAGR) of 83 percent.  EuropeChina, and Canada are currently the primary sources of industrial hemp.  With the passage of the 2018 Farm Bill, the U.S. has become the world’s third largest producer of industrial hemp.

Europe has rapidly developed a robust hemp and CBD market.  Europe is also a strong producer of industrial use hemp products with $424 million in industrial product sales. China has led global markets in textiles with almost 80 percent of the $1.7 billion hemp textile market, in 2019.

In addition, National Industrial Hemp Council members will now have unprecedented access to United States trade negotiators; foreign government counterparts; and a network of international hemp industry association counterparts. Foreign governments understand that NIHC is now supported by the U.S. government and represents U.S. industry interests.

Market Access Program funds can be used by NIHC throughout the world to support market access and trade policy work, international trade promotion including supporting business-to-business facilitation, and consumer and brand marketing.

MAP funds for 2021 will be administered to NIHC through the Food Export Association of the Midwest USA.    

“We’re extremely confident and trust that NIHC will represent the best interests of U.S. industrial hemp abroad. We’re excited to be working with them as part of the USDA cooperator community,” said Tim Hamilton, Executive Director of Food Export Association of the Midwest USA.

USDA Publishes “Economic Viability Of Industrial Hemp In The United States: A Review of State Pilot Programs”

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BY TYLER B. MARK, JONATHAN SHEPHERD, DAVID OLSON, WILLIAM SNELL, SUSAN PROPER, AND SUZANNE THORNSBURY

After a hiatus of almost 45 years, the 2014 Farm Bill reintroduced industrial hemp production in the United States through State pilot programs. This study documents outcomes and lessons learned from the State pilot programs and examines legal, agronomic, and economic challenges that may impact the transition from the pilot programs to economically viable commercial production.

In this publication…

Washington Industrial Hemp Bill Signed Into Law 

WASHINGTON: A bill from state Sen. Doug Ericksen that gets the state into the hemp business was signed into law Friday, raising the possibility that some Washington farmers may be able to plant a new cash crop during the current growing season.

Senate Bill 5276 got final approval from the Legislature Wednesday, and became law Friday with the governor’s signature. The swift action came after agricultural interests persuaded the governor’s office that planting this year might be possible if the bill was signed without delay.

“Quick approval for this bill means a big opportunity for Washington farmers,” said Ericksen, R-Ferndale. “Hemp could become a major crop in my district, because in Northwest Washington we would need no irrigation. But this new cash crop can be grown anywhere in the state, and if we can get planting done this season, all the better.”

The once-forbidden crop has benefitted from recent changes to marijuana laws. Hemp has been cultivated worldwide for thousands of year, and has traditionally been used for rope. New uses include everything from textiles to plastics, and even food. But hemp, a strain of the cannabis sativa plant, was banished from American farmfields when federal law declared marijuana a controlled substance. Hemp contains a small-but-detectable concentration of THC, the psychoactive element in marijuana.

Because several states, including Washington, have legalized marijuana, Congress passed a law last year removing hemp from the list of controlled substances, and permitting renewed hemp production in states that implement a regulatory program. Ericksen’s legislation establishes a licensing, inspection and testing program under the state Department of Agriculture. Cost would be borne by growers, as with other commodity programs.

Regulators will have to work quickly to get the program under way during the current growing season. The ideal planting season opened a month ago. The bill allows the Department of Agriculture to use an expedited rule-making process so that hemp licenses can be issued without delay.

Ohio Senate Votes In Favor Of Establishing An Industrial Hemp Program

OHIO: State Senators Steve Huffman (R-Tipp City) and Brian Hill (R- Zanesville) announced the unanimous Senate passage of their legislation that would create an industrial hemp program in Ohio administered by the Department of Agriculture. 

Senate Bill 57 clarifies that hemp and hemp derived products, including CBD oil may be sold legally in Ohio.

“It is important to understand that hemp is not marijuana, it is much more versatile and lacks an appreciable amount of THC to cause any psychotropic effects,” said Huffman. “This is an incredible opportunity for our farmers to help diversify their crops by allowing them to grow legal hemp.” 

With the recent passing of the 2018 Federal Farm Bill, industrial hemp has been removed from the list of scheduled substances banned by the federal government and can now be grown as a commodity crop throughout the United States. 

“This an exciting opportunity for farmers to expand the crops they plant,” said Hill. “Farmers can rotate hemp to improve soil health while earning more profit than many traditional cover crops. I’m eager to see all the ways that Ohio will benefit from this legislation.” 

Many states have adopted a hemp pilot program, permitted by federal law, so that farmers in their jurisdictions could begin planting and harvesting hemp. Hemp can be used in over 25,000 commercial products including feed, fiber, biofuels, clothing and plastic.

“Farmers are always looking for new options to diversify their operations,” said Adam Sharp, Executive Vice President of the Ohio Farm Bureau Federation. “We applaud Senators Hill and Huffman for introducing legislation to help bring industrial hemp to Ohio and to allow farmers to explore the potential of this quickly growing market opportunity.”  

This legislation will now be sent to the House for further consideration.

USDA Hosts Webinar On The Domestic Hemp Production Program & 2018 Farm Bill

Screenshot 2019-03-07 09.48.10DISTRICT OF COLUMBIA: The USDA will host a free webinar explaining the 2018 Farm Bill and The Domestic Hemp Production Program.

Event Date: Wednesday, March 13, 2019 – 12:00pm to 3:00pm

The Specialty Crops Program is conducting a webinar to solicit public comments on the sections of the 2018 USDA Farm Bill relative to multiple sections dealing with industrial hemp. Up to 1,000 people at a time may view the webinar; however, time constraints will allow only 60 speakers during the webinar and it will not include a Question and Answer session. Speakers will have a maximum time limit of three minutes and must submit a written copy of their comments to farmbill.hemp@usda.gov by March 11, 2019.

To register: Visit https://zoom.us/webinar/register/WN_L2G9K7cXTkayQ2O1_0AP0g  After registering, you will receive a confirmation email containing information about joining the webinar.

For questions regarding the listening session, please email Jeff Davis or view the Federal Register Notice

For additional information on the marketing program visit the Marketing Program for the Commercial Production of Hemp webpage.

Cresco Labs Launches Hemp CBD Subsidiary — Expands House Of Brands

ILLINOIS: Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the nation, today announced the formation of a new wellness subsidiary, Well Beings, that will provide the Company the ability to expand its house of branded products to all 50 states to potentially reach a new customer base outside of the licensed dispensary channel. Well Beings, led by Cresco’s Chief Experience Officer, MINIMAL principal, and former Nike Global Creative Director Scott Wilson, will offer a full line of high-quality hemp-based CBD wellness products eligible for national distribution. The subsidiary will have its own unique product line and produce CBD versions of Cresco Labs’ house of branded products including Cresco, Remedi and Mindy’s Edibles.

“Entering the CBD industry is an obvious next step for Cresco Labs so it can continue to build consumer trust in the quality and consistency of our portfolio of brands across all fifty states and to reach new customers both through and outside of the licensed dispensary channel,” said Cresco’s CEO and co-founder Charlie Bachtell. “As the US cannabis market is projected to expand from $10 billion to $75 billion by 2030, hemp-derived products, including CBD, offer all consumers an opportunity to access the natural therapeutic benefits of cannabinoid-based products. Our wellness-focused offerings, which will include Well Beings, Cresco, Remedi and Mindy’s, can be distributed nationwide for retailers, grocers, nutrition stores, and online marketplaces, further raising the awareness of cannabinoid-based products and their beneficial properties.”

“We believe that the role of national brands is to help consumers and patients make choices that are right for them. Cresco’s mission is to normalize and professionalize the cannabis industry. By building brands that help de-stigmatize, educate and build trust, we can help new and existing consumers explore the many benefits of cannabis and cannabinoid-based products.”

Following the recent passing of the 2018 Farm Bill legalizing CBD, the hemp CBD market is estimated to reach $3 billion by 2020, according to Brightfield Group, and may possibly eclipse the cannabis market over time. Well Beings builds on Cresco’s strong history of product quality and consistency to offer consumers trustworthy, high quality CBD-based wellness products that will be available in ingestibles, topicals and patches, balms, lotions and tinctures.

Combining the cannabinoid products expertise of Cresco Labs with the design and consumer expertise from Wilson’s MINIMAL, a globally recognized design firm, this new subsidiary will create a launching pad for new brands and support expansion of Cresco’s leading cannabis brands into the CBD space. Well Beings will serve an important new customer category that can experience hemp-based products in a normalized and de-stigmatized manner. Cresco Labs will be making a non-material investment in this new subsidiary.

“The purpose of this new business line is to demystify and build trust in CBD products, guiding consumers to understand the benefits of hemp and how to incorporate CBD-based wellness products into their daily lives,” said Wilson, who is spearheading the endeavor. “The cross-channel, consumer-centric opportunity for Cresco to build brand equity is transformative in the cannabis industry.”

OLCC Commissioners Adopt Rules For Regulating Industrial Hemp Entering Oregon Regulated Marijuana System

Stipulated Settlements for Recreational Marijuana Violations Approved

OLCC LogoOREGON: At its monthly meeting on February 21, 2019 the Commissioners of the Oregon Liquor Control Commission approved rules for regulating industrial hemp that enters into the OLCC regulated marijuana system.

The new industrial hemp rules implement the provisions of House Bill 4089 approved by the Oregon Legislature and signed into law in 2018.  HB 4089 alters the way hemp items can enter the OLCC licensed system.  The rule change allows for additional OLCC recreational marijuana license types to receive industrial hemp items from growers and handlers registered with the Oregon Department of Agriculture.

A key element of the rules requires that hemp items received by OLCC licensees be tracked using a seed-to-sale tracking system; this means hemp items will be tracked using the same Cannabis Tracking System (CTS) required for marijuana and marijuana products.

The new hemp rules can be found here on the OLCC website.

The Commission also approved the following fines and/or marijuana license suspensions or license surrenders based on stipulated settlements:

CR HEALTHY OPTIONS* will pay a fine of $1,485 or serve a nine day recreational marijuana producer license suspension for one violation.
Licensees are Linda Mayfield, Co-Licensee; Larry Mayfield, Co-Licensee.

Phillips Field Facility* will pay a fine of $7,755 or serve a 47-day recreational marijuana producer license suspension for two violations.
Licensee is Phillip Field Facility, LLC; Susan Phillips, Member.

Kleen Karma Gardens* will pay a fine of $2,640 or serve a 16-day recreational marijuana producer license suspension for two violations.
Licensee is Kleen Karma Gardens, Inc.; Oregon Care 4 You, LLC, Stockholder; Mark Mobray, Pres/Sec/Dir/Member; Kimberly Bottaro, VP/Director.

Lunchbox Alchemy*; will pay a fine of $8,415 or serve a 51-day recreational marijuana processor license suspension for two violations.
Licensee is CHC Laboratories, LLC; Cameron Yee, Managing Member.

Gorgeous Green Farms*; will pay a fine of $7,260 or serve a 44-day recreational marijuana producer license suspension for three violations.
Licensee is Gorgeous Green Farms, LLC, Dungey Holdings, LLC, Member; Scott Dungey, Member; F&P Investments, LLC, Member; Jeffrey Froug, Member.

Panda Farms*; will surrender its producer license on the date the transfer of ownership of the business is completed or at 7:00 AM on May 21, 2019, whichever is earlier, and each licensee agrees to accept a letter of reprimand for nine violations.
Licensee is Geiger Industries, LLC; Kali Mata, LLC, Managing Member; Nitin Khanna, Managing Member; Karan Khanna, Member; Portsmouth Enterprises, Managing Member; David Alport, Stockholder.

*The locations of OLCC marijuana producer, processor and wholesale licensees are exempt from public disclosure under Oregon law. 

A copy of the Stipulated Settlement Agreements for Marijuana Violation Cases can be found on the OLCC website, on the Laws & Rules page under the Final Orders section.