By Geoffrey Taylor, MA, Hemp Contributor, Valley Ag Voice
With so much excitement surrounding the hemp industry around the country and hemp taking center stage at the recent World Ag Expo, hemp growers and farmers are facing uphill battles on many fronts while seeing positive changes on others. This means growers and farmers not only in the San Joaquin Valley, but nationwide, must keep their ears to the ground for constant shifts in regulation that impact their day-to-day business operations, product offerings and compliance standards.
The USDA, or United States Department of Agriculture, has confirmed a hard deadline of March 22 for the implementation of their new nationwide hemp rules that may impact many growers in meeting compliance standards in their hemp farming operations. These new rules have several positive benefits including allowing farmers to utilize conventional disposal methods for crops exceeding the THC, or tetrahydrocannabinol, standards. The USDA states that “the final rule allows for alternative disposal methods for non-compliant plants that do not require using a DEA reverse distributor or law enforcement and expands the disposal and remediation measures available to producers.”
Another major benefit is increasing the amount of time to conduct cannabinoid testing from 15 days prior to harvest up to 30 days prior to harvest. Though this testing requires the use of a DEA, or Drug Enforcement Agency, registered laboratory, the USDA notes that “there are an insufficient number of DEA-registered laboratories to test all the anticipated hemp that will be produced in 2020 and possibly 2021. DEA has agreed to extend the enforcement flexibility allowing non-DEA registered labs to test hemp until January 1, 2022 and is processing lab registration applications quickly to get more labs testing hemp DEA-registered.”
In addition to this, the USDA states that it will be increasing the “negligence” standards for farmers with hot hemp crops exceeding the THC standards from 0.5 percent THC up to an allowable 1.0 percent THC, noting specifically that “producers must dispose of plants that exceed the acceptable hemp THC level. However, if the plant tests at or below the negligent threshold stated in the rule, producer will not have committed a negligent violation. The final rule raises the negligence threshold from 0.5 percent to 1 percent and limits the maximum number of negligent violations that a producer can receive in a growing season (calendar year) to one.”
These changes will allow many farmers to save valuable funds in special disposal methods, destruction of entire crops, the timeframe in which to test plants and other benefits that may impact the farmer or grower’s bottom line. This is especially good news for Tribal nations as the USDA stated “the final rule provides that a tribe may exercise jurisdiction and therefore regulatory authority over the production of hemp throughout its territory regardless of the extent of its inherent regulatory authority.”
Though the USDA rules may come as a welcome change for many growers, farmers and producers, a recent Federal court ruling on smokable hemp may heavily impact growers who produce high quality hemp flowers for this marketplace. An Indiana-based Federal judge upheld the state of Indiana’s 2019 ban on smokable hemp flower while a court case regarding the ban is set to begin soon. In California, Senate Bill 235 and Assembly Bill 45, which are currently making their way through the Capitol chambers, will make way for the state to begin regulating CBD as a food-grade and nutraceutical product allowed in food, beverages and supplements, but will also effectively ban the sale of smokable hemp in either a vaporizer cartridge or in cured flower for smoking until the United States Food and Drug Administration, or FDA, explicitly approve the use of hemp as a combustible regulated similarly to tobacco.
According to Hemp Industry Daily, the value of the nationwide smokable hemp market in 2020 was roughly $80 million and anticipated growth to upwards of $300 million to $400 million by 2025 depending heavily upon both Federal and State regulations. This segment includes cured CBD hemp flower, hemp flower pre-rolled cigarettes and other smokable or vaporizable products.
As the outdoor growing season is ramping up for California hemp farmers, there are many considerations for the coming changes in regulations at both the State and Federal levels. While some regulations are likely welcome, others may present unique challenges to stakeholders at every level of the burgeoning hemp industry.
While California is currently the third largest hemp producing state in the country, trailing Colorado and Arizona, California growers must take the steps necessary to adapt swiftly to regulatory changes and prepare for yet another exciting and rewarding season in the United States hemp marketplace.