USDA's Final Rule on Hemp: Harvest-Window Dressing
Harvest-Window Dressing: The Final Rule is a rush-job that makes a few superficial changes but remains fatally flawed for most farmers.
With less than 5 days left in the Trump Administration, USDA has promulgated a Final Rule that retains many of the Interim Final Rule’s most fundamental errors, continuing to put hemp farmers as well as regulators at immense and unnecessary risk. We call upon the new Administration’s USDA leadership to delay enforcement of the provisions relating to Total THC and sampling (§990.3(a)(2), §990.3(a)(3), §990.25(g) and related references elsewhere in the Rule) until these errors can be corrected. Otherwise, we fear this year’s harvest will yield a bumper crop of bankruptcies and lawsuits rather than fiber, flower and food.
Most importantly, the Final Rule still retains scientifically and legally unsupportable provisions for sampling and measuring THC that threaten farmers with financial ruin and continue to expose the Department and State and Tribal regulators to allegations of unlawful sanctions. Despite substantive public comment and scientific input about these problems upon their first appearance in the Interim Final Rule (including our 14-page comment to USDA in October 2020 with citations to peer-reviewed research, which is also summarized here), the Department has declined to correct—and in some cases evidently ignored—these errors in its headlong rush to issue a Final Rule before the change in Administration, leaving the industry in limbo yet again:
- Exclusion of sampling uncertainty from the margin of error for THC reporting and other erroneous statistical methodologies 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.
- Calculation of Total THC assuming 100% conversion of THCA to Δ9-THC contradicts scientific evidence, vastly overestimating THC levels and threatening farmers with non-compliance sanctions that exceed the Department’s statutory authority.
- Sampling of only flowering tops contradicts the scientific and legal definition of hemp, vastly overestimating THC levels and threatening farmers with false non-compliance findings. The scientific basis for the legal definition of hemp at the 0.3% threshold 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.
As for the revisions made in the Final Rule, upon first glance they may appear promising, but they do little to reduce the risks that most farmers face. Moreover, by punting key decisions on sampling methodologies to States and Tribes with vague and inadequate direction, the Final Rule actually increases regulators’ exposure to claims of unlawful takings, and it sets the stage for even more confusion in the industry than before:
- The 30-day harvest window should be counted from testing date, not sampling date: The extension of the window from 15 to 30 days is an improvement, but the days are still counted from the date of sampling rather than the date of testing. With backlogs at testing labs, this still deprives farmers of enough time to plan their harvests and exposes labs to tortious claims for damages resulting from delays in lab processing.
- The 1% negligence threshold is insufficient and largely inconsequential: The increase from 0.5% to 1% is a positive change, but 1% remains insufficient, arbitrary and unsupportable, and its significance to most farmers is minimal. A finding of negligence triggers no criminal prosecution, and it has no bearing on the marketability of a crop since compliance is still based on the same unsupportable Total THC requirement as before.
- Performance-based sampling direction is vague and will create confusion: The addition of performance-based sampling is an optimistic development that partially—though not sufficiently—addresses the IFR’s erroneous application of basic statistics, but it is only offered to States and Tribes as an optional alternative and leaves room for too much inconsistency and confusion in implementation. It also leaves farmers who are without access to such alternatives subject to the same scientifically and legally unsupportable sampling requirements that are otherwise retained from the IFR.
- THC Remediation helps some larger, vertically integrated farming operations but is of little use to most farmers: The Final Rule notably adds allowances for remediation of non-compliant crops by disposing of flowering tops, or shredding whole plants to biomass, and then re-testing for THC. While this will enable farm operations to recoup some value if they are affiliated with large-scale food, fiber and CBD processing, such remediation is of little benefit to farmers who are unaffiliated with processors, as open-market prices for these commodities represent a fraction of their cost in smaller-scale production. The most effective way to protect all farmers against undue losses from ‘hot’ crops is to ensure that THC is properly sampled and measured, as outlined in the bullet points above.
Taken together, these fundamental errors and half-hearted revisions render the Final Rule fatally flawed. Most farmers still face immense and unnecessary risks of financial ruin, and regulators are still exposed to alleged violations of the Administrative Procedures Act and similar laws because the Rule promulgates arbitrary and capricious decisions, exceeds statutory authority, and institutes sanctions that fail to meet the agency’s burden of proof.
Fortunately, the incoming Administration has ample opportunity to correct the Rule by exercising USDA’s administrative discretion to delay enforcement of its most egregious provisions. This would leave the rest of the Rule in place for those States and Tribes that have moved forward with USDA-approved plans, while those States opting to proceed under the previous 2014 Farm Bill authorities can continue to do so through 12/31/2021. This gives the new Administration plenty of time to issue a Rule that will allow hemp production to fulfill its promise as a keystone crop that supports recovery, equity and climate-smart agriculture while reconnecting and revitalizing rural America.