Brandi B. Reynolds, CAMS-Audit, CCI
“On Again, Off Again” is how many people in the hemp industry felt when the Biden Administration paused a hemp rule issued as a final rule on hemp production on the last full day of the Trump Administration (88 Federal Register 5596, January 19, 2021). Those who weren’t pleased with the final rule in January held their breath, hoping that the pause meant their concerns would be addressed. That didn’t happen. Instead, the new (and former) Secretary of Agriculture, Tom Vilsack, approved the rule as issued in January. The new rule will be effective March 22, 2021, as originally planned.
Open Question – Hot Plants
This final rule incorporates public comments received in response to the Interim Final Rule published on October 31, 2019. The Final Rule addressed many of the public comments, but left concerns in its wake. For example, one of the main concerns with the Final Rule among hemp professionals was what happens when hemp becomes “hot” – meaning it contains more than the 0.3% legal threshold of THC – the chemical that gets one “high.” Technically, hemp that contains more than the .3% legal threshold of TCH is considered marijuana.
Concerns about “what happens” include what happens to the plants and to the individuals who grew them.
- The Plants: Under the final rule, producers would have options with respect to “hot” plants, and some of the options are particularly pleasing to environmentalists. Instead of having to dispose of the plants in accordance with the DEA’s rules for marijuana disposal, producers could instead plow the plants back into the ground, use the plants as mulch on their own farm, or even dispose of the flowers but keep the stalks for hemp fiber. In other words, “hot” plants are no longer a total loss to the producer.
- The Producer: Under the Final Rule, producers will not have committed a negligent violation as long as the plant does not have a THC concentration of more than 1.0 percent on a dry weight. As noted above, the plants that exceed 0.3% still have to be destroyed in a compliant manner, but the producer gets some relief in terms of negligence. If a crop tests above the 1.0% level, the producer will receive a notice of violation and a corrective action plan that includes a due date. The producer will have to report progress with the corrective action plan to the USDA.
There is pressure from Congress and State Agriculture Departments to move the THC limit from 0.3% to 1.0%.
Open Question – Sampling and Testing
In addition to the changes surrounding “hot” plants, the Agriculture Department enlarged the time of the sampling window – that is the time from when the crop samples are cut to the time the crop is harvested — from 15 days to 30 days. The Department placed on hold the requirement that the hemp be tested at a DEA-approved hemp testing lab. Testing sites will have until December 31, 2022, to register with the DEA. Enforcement of a registration requirement has been postponed because of the current shortage of DEA-approved testing labs in the U.S.
A Role for Risk Management
The final rule is helpful in allowing the continued development of a hemp industry. Risk, including criminal risk, remains a part of the industry.
As with any new industry, hemp’s rules present an ever-changing landscape. A sound compliance risk management program will go far in keeping hemp producers on the right side of the law. Bates Group can assist in preparing (or conducting) proactive risk management services, including risk assessments, risk reporting, roadmaps and action plans for remediation. Bates Group has the industry knowledge and experience to have your business ready to be compliant with all your cannabis compliance requirements.
For more information on how Bates Group can assist with your compliance needs, please contact us.
