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Our Comment to USDA regarding the Interim Final Rule on Hemp

Click here for full PDF of comment to USDA

POLICY BRIEF: Recommended changes to USDA Hemp Regulations (7 CFR 990), 11/13/2020 

Hemp is a new commodity that is as challenging to regulate as it is to produce.  USDA has confronted these challenges in drafting its Interim Final Rule (IFR) for domestic hemp production, but the resulting regulation contains substantive technical errors that are putting farmers at immense and unnecessary financial risk.  These errors also expose the Department to alleged APA violations for arbitrary and capricious rulemaking, for exceeding statutory authority, and for sanctions that fail to meet the agency’s burden of proof according to APA evidentiary standards.

These problems might have been avoided had the IFR been promulgated with APA-required advance notice and comment, but the Rule was put into effect immediately in October 2019 without that step.  To USDA’s credit, the Department has since acknowledged the concerns arising from these errors in its 9/8/2020 solicitation for a post hoc 30-day comment period on the IFR, but it remains unclear whether or how these concerns will be addressed in drafting of a Final Rule sometime next year.   In the meantime, confusion and consternation reign with the IFR in its current form and we fear this year’s harvest will yield a bumper crop of bankruptcies and lawsuits rather than fiber, flower and food. 

Thus the most urgent recommendation is to delay enforcement of the provisions containing these errors until the Final Rule is promulgated.  In February, USDA made a similar decision to delay enforcement of two other IFR provisions in response to significant stakeholder concerns.  Given that USDA has now acknowledged serious concerns relating to the additional provisions outlined below, the Department should quickly apply the precedent it set in February and delay enforcement of these provisions, at §990.3(a)(2)(i), §990.3(a)(2)(ii), §990.3(a)(3), §990.25(b) and related references elsewhere in the IFR.

This immediate relief would aid immensely in the paramount task before USDA and its stakeholders, which is to improve upon the IFR with a Final Rule that lays a sound foundation for the industry’s long-term viability while meeting the Department’s statutory mandates.  The following recommendations, which are further detailed and substantiated in the comment we recently submitted to USDA (Docket #AMS–SC–19–0042), would accomplish this by correcting the Rule’s most egregious errors and relieving stakeholders and regulators of the associated risks.

  1. Factual errors in sampling methods threaten farmers with false non-compliance sanctions. Fundamental errors in the IFR’s statistical methods are placing farmers at risk of false non-compliance findings that do not meet the agency’s statutory burden of proof for sanctioning persons and property.  990.3(a)(2)(ii) should provide for statistically valid measures of sampling uncertainty and report such uncertainty in the margin of error for THC levels.
  1. Calculation of post-decarboxylated THC contradicts scientific evidence, vastly overestimating THC levels and threatening farmers with false non-compliance sanctions. Contrary to peer-reviewed research, the IFR assumes 100% decarboxylation of other compounds to Δ9-THC, whereas the literature demonstrates a conversion rate of 30%.  As a result, the IFR overestimates the amount of Δ9-THC in crops and renders non-compliance findings scientifically and legally unsupportable based on the Department’s statutory authority.  The calculation formula in §990.25(b) and related sections should be revised to accurately reflect the 30% conversion rate.
  1. Harvesting within 15 days of sampling is impracticable according to testing labs and farmers throughout the country. 990.3(a)(2)(i) should be revised to provide a window of 30 business days.
  1. Sampling of only flowering tops contradicts the scientific and legal definition of hemp, vastly overestimating THC levels and threatening farmers with false non-compliance sanctions. The IFR requires samples to be taken from only the flowering tops of plants, contradicting the scientific basis for the legal definition of hemp and the 0.3% threshold, which was explicitly established for testing of leaves, not flowers. As a result, this direction overestimates the amount of Δ9-THC in the plant and renders non-compliance findings scientifically and legally unsupportable.  990.3(a)(2)(i) and related sections should specify sampling of leaves, not flowers.
  1. The negligence threshold should be set no lower than 5% THC. Since THC levels in hemp can fluctuate dramatically based on numerous factors beyond farmers’ control, and since cannabis cultivated for marijuana production contains THC levels much higher than 5%, it would be difficult if not impossible to establish that a farmer who planted cannabis containing less than 5% THC did so negligently, let alone with culpable intent.
  1. The Rule should establish hemp grown for flower as a Specialty Crop. USDA’s current guidance on specialty crops establishes hemp to be a fiber crop, and thus ineligible for specialty crop funding, but over 75% of the hemp planted in the US is grown not for fiber production, but for flowers and other uses consistent with the statutory definition of specialty crops. USDA has established a precedent of dual-designation with its treatment of amaranth (designated a commodity if grown for grain production and designated a specialty crop if grown for leafy greens) and other multiple-use crops variously designated as specialty crops or not, depending on their use. This precedent can clearly be applied to hemp as well.