The DEA’s rule could have a major chilling effect on the Hemp CBD industry or the fast-growing delta-8 THC market.

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On August 20, 2020, the Drug Enforcement Administration (DEA) issued an interim rule on hemp, hemp-derived CBD (Hemp CBD) and other hemp-derived cannabinoids. According to the DEA, “the interim final rule merely conforms DEA’s regulations to the statutory amendments to the Controlled Substances Act (CSA) that have already taken effect, and it does not add additional requirements to the regulations.” If you’re in the hemp derivative business, trust the DEA at your own peril. While it is true that the 2018 Farm Bill did legalize hemp, hemp derivatives, hemp extracts, and cannabinoids in hemp, it did not explicitly cover hemp processing.

The U.S. Department of Agriculture (USDA) announced on Friday that it is reopening a public comment period on hemp regulations following months of intense pushback from stakeholders on its original proposal.

While the federal agency already received more than 4,600 comments during the initial comment period that closed in January, it is now encouraging “additional input on several topics identified by commenters.” This seems to a sign that USDA is willing to provide more flexible regulations, as many interested parties—from industry operators to members of Congress—have requested.

USDA listed 12 areas where they’re especially seeking additional feedback, including several that industry representatives have identified as very consequential. Here are the titles, as listed in the department’s new Federal Register notice:

1. Measurement of Uncertainty for Sampling

2. Liquid Chromatography Factor, 0.877

3. Disposal and Remediation of Non-Compliant Plants

4. Negligence

5. Interstate Commerce

6. 15-day Harvest Window

7. Hemp seedlings, microgreens, and clones

8. Hemp breeding and research

9. Sampling Methodology – Flower vs. Whole Plant

10. Sampling Methodology – Homogenous Composition, Frequency, and Volume

11. Sampling Agents

12. DEA Laboratory Registration

This is a welcome development as far as stakeholders are concerned, giving hope that USDA could ultimately revise some of the more onerous restrictions that they’ve indicated could hamper the industry’s potential.

For example, producers have argued that the proposed rule mandating that hemp be tested only at DEA-certified laboratories will have an unnecessary bottlenecking effect and they should be able to have a wider range of labs to use. That was one policy USDA temporarily lifted earlier this year, and now it wants to hear from the public on whether it “should be permanently removed.”

Another rule that USDA paused due to feedback concerns disposal and remediation of non-compliant hemp that contains excess THC. The agency’s Interim Final Rule stipulated that so-called “hot hemp” must be eradicated under law enforcement supervision. Farmers have complained about that restriction and said they should be allowed to remediate the crop using a number of techniques. USDA wants to hear more about that proposed alternative.

The department is also open to amending the 15-day testing window and is requesting information about why many industry participants feel a 30-day window would be more appropriate, as many said during the past comment period.

This new USDA announcement reopening the comment period marks the latest example of the federal government asking the public and stakeholders to weigh in on key cannabis issues.

The Food and Drug Administration (FDA) is still in the process of developing regulations for hemp-derived CBD products, and it indefinitely reopened its own comment period on the topic.

DEA recently filed its own set of rules to comply with hemp’s legalization, but advocates suspect that they are intended to undermine the industry.

All told, it appears that USDA is taking seriously the feedback it’s received and may be willing to make certain accommodations on these particular policies. The notice reopening the comment period will be formally published in the Federal Register on Tuesday. The window to individuals to provide input will then last for 30 days, though October 8.

The department’s rule for hemp, when finalized, is set to take effect on October 31, 2021.

In July, two senators representing Oregon sent a letter to the head of USDA, expressing concern that hemp testing requirements that were temporarily lifted will be reinstated in the agency’s final rule. They made a series of requests for policy changes.

Sen. Cory Gardner (R-CO) called on USDA to delay the implementation of proposed hemp rules, citing concerns about certain restrictive policies the federal agency has put forward in the interim proposal.

Senate Minority Leader Chuck Schumer (D-NY) last month wrote to Agriculture Secretary Sonny Perdue, similarly asking that USDA delay issuing final regulations for the crop until 2022 and allow states to continue operating under the 2014 Farm Bill hemp pilot program in the meantime.

As it stands, the earlier pilot program is set to expire on October 31. The senators aren’t alone in requesting an extension, as state agriculture departments and a major hemp industry group made a similar request to both Congress and USDA this month.

Perdue has said on several occasions that DEA influenced certain rules, adding that the narcotics agency wasn’t pleased with the overall legalization of hemp.

Amid the coronavirus pandemic, hemp industry associations pushed for farmers to be able to access to certain COVID-19 relief loans—a request that Congress granted in the most recent round of coronavirus legislation.

However, USDA has previously said that hemp farmers are specifically ineligible for its Coronavirus Food Assistance Program. While the department initially said it would not reevaluate the crop’s eligibility based on new evidence, it removed that language shortly after Marijuana Moment reported on the exclusion.

Two members of Congress representing New York also wrote a letter to Perdue in June, asking that the agency extend access to that program to hemp farmers.

Hemp farmers approved to produce the crop do stand to benefit from other federal loan programs, however. The department recently released guidelines for processing loans for the industry.

SOURCES: USDA DEA MJREPORTS

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