Colorado hemp growers should pay attention to new USDA rules

Colorado hemp growers should pay attention to new USDA rules


Colorado’s hemp growers are about to get a lot more competition now that the USDA has begun promulgating its plan for national hemp production.

Under the department’s so-called interim final rule, hemp growers across the country now have a lot more legal and practical guidance on everything from THC testing and crop disposal to insurance requirements and criminal background checks.

For Colorado growers, many of whom likely have half a decade or more of experience in doing what the new plan encourages, it might be tempting to disregard the specifics of the program. But that would be a mistake: this is a comprehensive framework that will control the nation’s hemp production for the next few years. And several recent incidents demonstrate the effects the plan could have on Colorado stakeholders.

For example, in mid-November, a Colorado-based CBD company returned to an Idaho courtroom in an ongoing case that sharply focuses on hemp producers’ interstate commerce concerns. Idaho state police had arrested a Portland-based truck driver while he was transporting more than 6,700 pounds of hemp from Oregon to Colorado. These two states both have pilot hemp-growing programs allowed under the federal 2014 Farm Bill. But Idaho is one of a few states in the U.S. still holding out on legalizing hemp.

In the Idaho case, the attorney for the hemp producer argued that transporting hemp across Idaho is implicitly allowed under the 2014 farm bill and bolstered by the USDA’s interim final rule, which was released October 31. Under the new U.S. Domestic Hemp Production Program, the issue is addressed clearly under its sixth article, stating, “No State or Indian Tribe may prohibit the transportation or shipment of hemp produced in accordance” with the new program and its guidelines. It also goes on to note that both the 2018 Farm Bill and a legal memo issued by the Department of Agriculture affirmed states’ rights to enact their own laws to regulate hemp but forbade any state from prohibiting or restricting the interstate commerce of hemp.

The new hemp program’s clarity on interstate commerce may be welcomed by most, but other aspects of the new rules have already have brought some criticism, especially regarding federal testing requirements.

In late November, Oregon senators Ron Wyden and Jeff Merkley expressed concern to the USDA over multiple topics covered by the new guidelines. One of their specific concerns was over the requirement that only U.S. Drug Enforcement Administration labs — and no others — are to be used for the crucial task of THC testing. Both lawmakers argue that the DEA does not have authority on this issue because the 2018 Farm Bill gave it only to the USDA and FDA.

Perhaps more importantly, though, the lawmakers raised a concern that is increasingly reflected in comments overheard in the industry: The current DEA lab network may not be adequately staffed or available for today’s needs — nor is it ready for the tsunami of new testing demands to come as the popular program matures nationwide.

Relying solely on DEA analysis will lead to “tremendous bottlenecks” in testing, the senators cautioned, because of the number of available labs.

The threat of breakdowns at the testing level is important for all states participating in the industry. But perhaps none should be more concerned than Colorado, which has one of the nation’s most mature and well-functioning hemp industries. If the marketplace gets backed up — and if financial losses mount as THC-hot crops are destroyed — Colorado hemp growers could experience challenges ahead.

So what should the state’s growers know now? And importantly, what should they do now that federal proposals have been established?

Colorado is currently developing its own hemp program rules. Given the state’s long history of legally and successfully growing hemp, it’s a practical certainty that Colorado will promulgate its unique regulations instead of copying anything from federal efforts.

Though that is a generally positive development for Colorado hemp growers, they still need to immerse themselves in the particulars of the new federal proposals to determine what works and what does not. As such, it would be wise for them to look at the regulations being proposed for federal and tribal lands and imagine how those rules could affect them for better or worse. They then can use their observations on the federal plan to voice concerns to Colorado’s lawmakers, ensuring that the state develops a program that will uniquely protect and promote the industry.

Right now, industry stakeholders are voicing their observations and concerns on the new interim program, and it’s important that Colorado’s industry concerns are heard, too. After all, the state has spent the past five years making its hemp industry well regarded and profitable. And its hard-earned lessons could help set the course for the rest of the nation’s hemp-production efforts.

Jennifer Tierney

Jennifer Tierney

Jennifer comes from a discipline of Operations, including Finance and Technology. Having worked in operational and financial management for more than fifteen years, Jen has a distinct set of skills and is known for complex analysis of operations, finance, and technology to improve core business strategies.

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