Ask Our Experts 11/6/19: Effects of the USDA’s Interim Hemp Rules

 

Q: How will the USDA’s new interim rules affect the hemp industry?

By New Frontier Data

A: The devil is in the details: Despite having been made public for the past week, the hemp industry is largely trying to discern any effects or fallout from the new regulations. Meantime, there are at least three things for stakeholders and interested parties to consider.

Cultivators have some wiggle room

For now, hemp cultivators have some breathing room regarding hemp samples that test “hot” (i.e., with unacceptable levels of THC). To start, testing labs will be required to calculate and include the measurement of uncertainty (MU) when reporting THC test results. If the sample has a THC concentration beyond the acceptable level but within the measure of uncertainty, the sample will be deemed compliant. Similarly, if a test sample falls outside of the acceptable THC threshold of 0.3% but at or below 0.5%, the cultivator will not be penalized beyond the fact that the noncompliant, hot crop will be destroyed.

There may be a shortage of testing labs

Laboratories aiming to test hemp samples will be required to register with the Drug Enforcement Agency (DEA), since any hot samples are technically Schedule I narcotics. Given such exposure, there may be a shortage of DEA-registered labs available to conduct testing. Though the market should eventually adjust to accommodate, cultivators in the short term may experience a backlog.

States cannot interfere with hemp-related commerce

Though hemp is federally legal, hemp cultivation so far is not permitted in Idaho, Mississippi, or South Dakota. Meanwhile, legal confusion persists about transporting hemp through those states, leading to seizure of shipments by local authorities despite preliminary guidance issued by the USDA. The interim rules officially confirm that state or local jurisdictions have no authority to seize hemp shipments which comply with federal law.