ARTICLE 6

Hemp

Adoption Date: April 15, 2020

Introduction

The USDA has disseminated proposed regulations for the its Hemp Production Program. Prior to the 2018 Farm Bill, Cannabis sativa L. with delta-9 tetrahydrocannabinol (THC) levels greater than 1% fell within the definition of “marihuana” under the Controlled Substances Act (CSA), 21 U.S.C. 801 et seq., and was therefore a Schedule I controlled substance unless it fell under a narrow range of exceptions (e.g., the “mature stalks” of the plant).[ As a result, many aspects of domestic production of what is now defined as hemp was limited to persons registered under the CSA to do so. The 2018 Farm Bill now allows for the interstate transportation and shipment of hemp in the United States.

Hemp is a commodity that can be used for numerous industrial and horticultural purposes including fabric, paper, construction materials, food products, cosmetics, production of cannabinoids (such as cannabidiol or CBD), and other products High prices for hemp, driven primarily by demand for use in producing CBD, relative to other crops, have driven increases in planting. Producer interest in hemp production is largely driven by the potential for high returns from sales of hemp flowers to be processed into CBD oil. High prices for hemp, driven primarily by demand for use in producing CBD, relative to other crops, have driven increases in planting.

All hemp producers require the necessary federal, state and local licenses. These standards govern the following areas: A) Maintaining relevant information regarding the Land on which hemp produced; B) Testing Procedures; C) Effective Disposal ; D) Compliance with Enforcement Procedures; and E) Record Keeping.

Definitions

The Controlled Substances Act (CSA) is the statute, codified in 21 U.S.C. 801-971, establishing Federal U.S. drug policy under which the manufacture, importation, exportation, possession, use, and distribution of certain substances is regulated. Because cannabis containing THC concentration levels of higher than 1 percent is deemed to be marijuana, a schedule I controlled substance, its regulation falls under the authorities of the CSA. Therefore, for compliance purposes, the requirements of the CSA are relied upon for the disposal of cannabis that contains THC concentrations above the stated limit of this part.

A “corrective action plan” is a plan set forth by a State, tribal government, or USDA for a licensed hemp producer to correct a negligent violation of or non-compliance with a hemp production plan, its terms, or any other regulation set forth under this part. This term is defined in accordance with the 2018 Farm Bill, which mandates certain non-compliance actions to be addressed through corrective action plans.

“Delta-9 tetrahydrocannabinol,” also referred to as “Delta-9 THC” or “THC” is the primary psychoactive component of cannabis, and its regulation forms the basis for the regulatory action of this part. As mandated by the Act, legal hemp production must be verified as having THC concentration levels of 1 percent on a dry weight basis or below. For the purposes of this part, delta-9 THC and THC are interchangeable.

“DEA” means the “Drug Enforcement Administration,” a United States Federal law enforcement agency under the United States Department of Justice. The DEA is the lead agency for domestic enforcement of the Controlled Substances Act. The DEA plays an important role in the oversight of the disposal of marijuana, a schedule I controlled substance, under the regulations of this part. The DEA is also instrumental in registering USDA-approved laboratories to legally handle controlled substances, including cannabis samples that test above the 1% THC concentration level.

“Dry weight basis” refers to a method of determining the percentage of a chemical in a substance after removing the moisture from the substance. Percentage of THC on a dry weight basis means the percentage of THC, by weight, in a cannabis item (plant, extract, or other derivative), after excluding moisture from the item.

The Farm Service Agency (FSA) is an agency of the U.S. Department of Agriculture, that provides services to farm operations including loans, commodity price supports, conservation payments, and disaster assistance. For the purposes of this program, FSA will assist in information collection on land being used for hemp production.

For the purposes of this part, “geospatial location” means a location designated through a global system of navigational satellites used to determine the precise ground position of a place or object.

This term “handle” is commonly understood by AMS and used across many of its administered programs. For the purposes of this part, “handle” refers to the actions of cultivating or storing hemp plants or hemp plant parts prior to the delivery of such plant or plant part for further processing. In cases where cannabis plants exceed the acceptable hemp THC level, handle may also refer to the disposal of those plants.

“Hemp” is defined by the 2018 Farm Bill as “the plant species Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 1 percent on a dry weight basis.” The statutory definition is self-explanatory, and USDA is adopting the same definition without change for part 990.

The term “lot” refers to a contiguous area in a field, greenhouse, or indoor growing structure containing the same variety or strain of cannabis throughout. In addition, “lot” is a common term in agriculture that refers to the batch or contiguous, homogeneous whole of a product being sold to a single buyer at a single time. Under the terms of this part, “lot” is to be defined by the producer in terms of farm location, field acreage, and variety (i.e., cultivar) and to be reported as such to the FSA.

As defined in the CSA, “marihuana” (or “marijuana”) means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. The term `marihuana’ does not include hemp, as defined in section 297A of the Agricultural Marketing Act of 1946, and does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination (7 U.S.C. 1639o(1)). “Marihuana” also means all cannabis that tests as having a concentration level of THC on a dry weight basis of higher than 1 percent.

“Negligence” is a term used in the 2018 Farm Bill to describe when certain actions are subject to specific compliance actions. For the purposes of this part, the term means failure to exercise the level of care that a reasonably prudent person would exercise in complying with the regulations set forth under this part.

“USDA” is synonymous with the United States Department of Agriculture.

In the context of this part, “licensee” or “USDA licensed hemp producer” means a person or business authorized by USDA to grow hemp under the terms established in this part and who produces hemp.

Standard 6.01. Land Information

Producers must gather and maintain:

  1. The legal description of the land;
  2. The geospatial location; and
  3. The hemp crop acreage or indoor square footage to report to the USDA Farm Service Agency (FSA).
Standard 6.02. Testing Procedures

All hemp production must be sampled and tested sampling based on performance-based sampling developed by respective states and tribes. Performance-based approaches utilize measurable or calculable parameters to determine whether the performance standard is met. Sampling protocols must be sufficient at a confidence level of 95 percent that no more than one percent of the plants in each lot would exceed the acceptable hemp THC level and sure that a representative sample is collected that represents a homogenous composition of the lot. Samples are taken from the flowering material of the plant, which is the top third of the plant just underneath the flowering material.

Producers must incorporate procedures for sampling and testing hemp to ensure the cannabis grown and harvested does not exceed the 1% acceptable hemp THC level on a dry weight basis. Sampling procedures, among other requirements, must ensure that a representative sample of the hemp production is physically collected and delivered to a laboratory for testing. Producers must present the measurement of uncertainty of the testing procedure, which must be within 0.3%

Within 30 days prior to the anticipated harvest of cannabis plants, a Federal, State, local, or Tribal law enforcement agency or other Federal, State or Tribal designated person shall collect samples from the flower material from such cannabis plants for delta-9 tetrahydrocannabinol concentration level testing.

After December 31, 2022, testing must be done at a DEA registered laboratory.

Each producer must ensure that the laboratory that conducts the test of the sample(s) from its lots reports the test results for all samples tested to USDA. The test results report shall contain the information described below for each sample tested.

  1. Producer’s license number.
  2. Name of producer.
  3. Business address of producer.
  4. Lot identification number for the sample.
  5. Name and registration number of laboratory.
  6. Date of test and report.
  7. Identification of a retest.
  8. Test result.
Standard 6.03. Disposal of Non-Compliant Plants

Plants that have a THC concentration level of greater than 1% on a dry weight basis outside of the measurement of uncertainty must be disposed of in accordance with the applicable State, Tribal and USDA regulations. These methods include plowing under, composting in to green manure for use on the same land, tilling, disking, burial or burning.

Producers must document the disposal of all marijuana. This can be accomplished by either providing USDA with a copy of the documentation of disposal provided by the reverse distributor or by using the reporting requirements established by USDA. These reports must be submitted to USDA following the completion of the disposal process. Forms shall be submitted to USDA no later than 30 days after the date of completion of disposal. The report shall contain the information described below:

  1. Name and address of the producer.
  2. Producer’s license number.
  3. Geospatial location, or other valid land descriptor, for the production area subject to disposal.
  4. A description of the procedures to demonstrate compliance must be submitted to USDA.
Standard 6.04. Compliance with Enforcement Procedures Including Annual Inspection of Hemp Producers

Producers plans must comply with USDA regulations in the following ways: 1) conduct random samplings to prepare for annual inspections by state and federal regulators; 2) prepare specific procedures to handle violations; 3) prepare compliance procedures to ensure hemp is being produced in accordance with the requirements of this part; and 4) ensure that a person with a State or Federal felony conviction relating to a controlled substance is subject to a 10-year ineligibility restriction on producing hemp under the Act.

Each producer shall submit an annual report to USDA. The report form shall be submitted by December 15 of each year and contain the information described below:

  1. Producer’s license number.
  2. Producer’s name.
  3. Producer’s address.
  4. Lot, location type, geospatial location, total planted acreage, total acreage disposed, and total harvested acreage.

In cases where a State or Tribe determines a negligent violation has occurred, a corrective action plan shall be established. The corrective action plan must include a reasonable date by which the producer will correct the negligent violation. Producers operating under a corrective action plan must also periodically report to the State or Tribal government, as applicable, on their compliance with the plan for a period of not less than two calendar years following the violation.
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Corrective action plans will, at a minimum, include:

  1. The date by which the producer shall correct each negligent violation;
  2. Steps to correct each negligent violation; and
  3. A description of the procedures to demonstrate compliance must be submitted to USDA.
Standard 6.05. Record Keeping
Producers will be required to maintain copies of all records and reports necessary to demonstrate compliance with the USDA program. These records include those that support, document, or verify the information provided in the forms submitted to USDA. Records and reports must be kept for a minimum of three years.