The White House has approved the U.S. Department of Agriculture (USDA)’s long awaited federal rules to guide hemp production. A draft of the U.S. Domestic Hemp Production Program guidelines was published today on USDA’s website, and once published in the Federal Register on Thursday, public comments will be open for 60 days. While this sets a framework for hemp growing and testing, the food and beverage industry is still awaiting Food and Drug Administration (FDA) to legalize and set standards for CBD food and drink products.
“At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets,” Sonny Perdue, U.S. Secretary of Agriculture, said in a release. “We have had teams operating to develop a regulatory framework that meets Congressional intent while seeking to provide a fair, consistent, and science-based process for states, tribes, and individual producers who want to participate in this program.”
Once established, the hemp rules, required by the 2018 Farm Bill, will provide more reliable options for sourcing hemp, considered an important step toward helping the CBD industry create safer, more reliable products. The rules are temporary for the first year, with a final set expected to be released within two years of the publication date.
According to the draft, all hemp producers will be responsible for licensing requirements, maintaining information on the land where hemp is produced, procedures for testing THC concentration in hemp, compliance provisions and procedures for handling violations.
The draft maintains that cannabis with a THC level above 0.3% is considered marijuana, still a schedule I controlled substance regulated by the Drug Enforcement Administration (DEA) under the Controlled Substances Act (CSA.) To help with safety, the rules include guidelines and procedures for testing THC content: within 15 days before anticipated harvest, a federal, state, local or tribal authority will collect flower samples for testing. The time frame, the draft states, is considered a “reasonable time for a farmer to harvest an entire field,” including potential rain and equipment delays.
Excitement over cannabidiol (CBD) products is fueling the hemp industry: though the FDA has yet to legalize CBD in food and drink, the market is rapidly growing, with CBD drinks, snacks and other startups gaining steam. Research firm Nielsen predicts sales of all legalized cannabis in the U.S. to reach $41 billion by 2025, with $6 billion of that from hemp-derived CBD products.
Though hemp contributes to an array of products such as fabric, paper and construction materials, CBD has added a new boost to the hemp industry. While hemp fiber prices range from $0.07-$0.67 per pound, and hemp grain or seed prices range from $0.65-$1.70 per pound, prices for hemp flowers, which contain CBD, range from $3.50-$30 per pound or more, the draft notes. Seeing this potential for profit, licensed hemp producers have more than doubled from 2017 to 2018 — and 13 new states started growing hemp in 2019, according to advocacy organization VoteHemp.
But confusion around hemp and marijuana has stunted a market from fully developing. The USDA rules aim to aid law enforcement in identifying marijuana versus hemp in transport, while also prohibiting interference in transporting hemp and hemp-derived products by states that prohibit hemp production and sales.
“As a result, hemp producers will have access to nationwide markets,” the draft reads.