Why should I care about USDA's hemp rule?
Meristem Farms, like many small-to-medium sized farms across the country are committed to farming artisanal, organically-farmed hemp with a very high plant-to-love ratio. For this way of cultivation to survive, USDA's hemp rule must be friendly for small and medium sized-farms.
Meristem believes that active engagement in the political and rule-making process is critical to protect our industry and establish a strong foundation for both food and fiber hemp as well as high cannabinoid hemp.
Our CEO, Rick Fox, has been in Washington DC meeting with USDA and members of Congress to help build support for changes in the rules. He and a collaborative band of companies have worked hard to develop a list of what it is possible to change. What we found with our time in DC after hours of meetings on Capitol Hill and with USDA was that very little scientific justification in their rules. We aim to provide science-based direction to guide future rule making. The goal is to get an adjustment to the rules as quickly as possible to provide some predictability for the coming season.
Hemp is as challenging to regulate as it is to produce. Under pressure to expedite regulations in time for the 2020 growing season, USDA has bravely tackled many of these challenges head-on in the Interim Rule, despite the difficulty presented by building a new industry with so many complex factors. But in the rush to meet an arbitrary deadline and despite the continued availability of 2014 Farm Bill authorities, the rule jumps to conclusions in setting standards that contradict available science and inadequately analyze the resulting stakeholder impact. Clearly, as shown by the alarms to this effect raised by thousands of public comments, it was a mistake to begin implementation of the rule without the requisite consideration of public comment and proper analysis of issues and alternatives. As a result, the rule brings destructive disarray to the hemp industry and exposes USDA to answering for failed crops and unlawful regulatory takings.
- The failure to account for sampling error in compliance testing gravely endangers law-abiding farms with false findings of non-compliance. The rule requires that Acceptable Hemp THC Level include a margin of error to account for Measurement Uncertainty, but the only uncertainty provided for is that resulting from the devices used to test the samples collected. Nowhere does the rule provide for the error resulting from the sampling of the crop in the field, which accounts for the largest source of variability in estimating the THC in the crop1. The margin of error for Acceptable Hemp THC Level must account for sampling uncertainty based on valid statistical methods.
- The rule’s requirements to sample flowering tops is unsupported by science. The requirement to sample flowering tops arbitrarily contradicts the scientific basis for the 0.3% Δ9-THC threshold, which was established in Small and Cronquist (1976) for use in measuring THC in the leaves of young, vigorous plants—not flowers. Sampling must be based on leaves or whole plants, not flowering tops.
- The 15-day testing window prevents farms from reacting to variable weather, genetic variation2 and growing conditions. Much if not most hemp cultivated in 2019 was under regulations providing a 28- or 30-day testing window using samples taken from whole plants, and farmers commonly had to wait more than 15 days just to receive test results back from the lab. There is insufficient evidence that lab capacity will markedly increase for the 2020 season, particularly with the requirement for DEA certification of labs (see below), and labs will be exposed to tortious claims for failing to meet legally mandated deadlines in their reporting. The testing window must be revised to 30 days, and specified to begin on the date the test results are reported by the lab.
- The assumption that all THCA converts to Δ9-THC post-decarboxylation overestimates the amount of Δ9-THC in hemp crops and results in false findings of non-compliance. By assuming that decarboxylation fully converts all THCA in a sample solely to Δ9-THC and to no other substances, the rule excludes consideration of available evidence to the contrary3. According to the rule’s definition of decarboxylation, THC levels must be determined as a theoretical maximum based on the fact that a molecule of Δ9-THC has 87.7% of the molar mass of THCA, without regard to how many of the THCA molecules will actually convert to Δ9-THC post-decarboxylation. In doing this, the rule places the burden of proof on compliance, whereas the law clearly places the burden of proof on non-compliance by defining hemp as not in excess of 0.3% Δ9-THC. If the intent of Congress was to place the burden on proving compliance, it would have drafted the definition of hemp as less than 0.3%. In order to prove non-compliance beyond a reasonable doubt, it is necessary to determine the amount of total THC (Δ9- THC+THCA) that must be present in a hemp sample to reasonably conclude that it will produce levels of Δ9-THC in excess of 0.3% post-decarboxylation, not just that it could. This has already devastated farms as crop purchasers are backing out of their contracts due to misperceptions of risk4 associated with theoretical estimates of THC rather than real data. It renders useless about 82% of the hemp flower and 74% of hemp biomass produced in the U.S.5, and it excludes 68% of all the varieties planted6. Essentially presuming farmers guilty until proven innocent, it also exceeds the authority of the Controlled Substances Act, contradicts Congressional intent in the 2018 Farm Bill, risks unlawful regulatory takings7, and restricts competition8. The rule’s definition of post-decarboxylation and associated references to total THC must be revised to use reasonable estimates of the actual conversion rate of THCA to Δ9-THC, as intended by the law.
- The requirement that testing be conducted by DEA-certified laboratories will strangle the industry and reduce competitiveness. With as few as 200 DEA-certified labs nationwide, there are not enough DEA labs to test the amount of hemp being grown in the US. This will restrict market access for many farms, especially those independent of well-capitalized verticals that are able to build their own DEA labs and offer services preferentially to their own subsidiaries and suppliers. The DEA requirement must be replaced with State accreditation of labs based on standards such as ISO or ASTM.
Additional action needed by USDA and others in time for the 2020 season, beyond the scope of the Rule:
- Total-loss crop insurance at a reasonable cost that includes coverage of ‘hot’ crops;
- A temporary restriction on imported hemp, including growing stock, to protect public health from poorly regulated imports and ensure the safety of US crops (hemp and many others) from known and unknown viruses until testing and clean stock programs are developed.9
- Implement an Agricultural Marketing Order* to increase demand in textiles, cars, boats, airplanes, and other industrial uses etc.;
- Inclusion of hemp in USDA Specialty Crop programs;**
- Administrative and regulatory measures to remove banking restrictions and alleviate misperceptions of risk by financial institutions from working with hemp businesses.
- A legal opinion by the Justice Department reaffirming that:
- Crops produced legally under 2014 Farm Bill authority remain lawful for interstate commerce without limitation (including after the 2014 Farm Bill authority itself expires);
- No State or Tribe may impede interstate transport of hemp, regardless of state or tribal laws;
- All cannabis not exceeding 0.3% Δ9-THC is legal under Federal law for possession, transport and sale, without limitation and regardless of origin.
1 Though the rule specifies that samples shall be taken to produce 95% confidence that no more than 1% of plants will exceed the Acceptable Hemp THC Level, such calculations are meant for estimating margins of error, and yet the rule makes no provision for such a margin of error. On the contrary, the rule states that “any test of a representative sample resulting in higher than the acceptable hemp THC level shall be conclusive evidence that the lot represented by the sample is not in compliance with this part.”
Sampling error is a basic tenet of statistical mathematics; no sampling application is scientifically sound without it. The effects of this oversight will devastate farms of all sizes, especially smaller farms or farms growing several different varieties. Using the sampling protocol required by the rule, a 5-acre planting would be tested by sampling 5 plants selected by the authorized agent to represent the lot. Consider a realistic example where these 5 plants test for the following THC Levels: 0.20, 0.20, 0.20, 0.20, 0.80. The Acceptable Hemp THC Level resulting from this sample would be equal to 0.32%, which would be deemed non-compliant. However, if the rule’s required 95% confidence level is applied to produce a margin of error for this estimate, that margin would be 0.32 ±0.21, meaning that the actual THC Level would be somewhere between 0.11% and 0.53%, and thus the lot would be deemed compliant. Sampling uncertainty must thus be included to ensure that findings of non-compliance can be established beyond a reasonable doubt. Farmers must be presumed innocent until proven guilty.
2 There is high variability in ratios between CBD, THCA and d9-THC (Taschwer and Schmid 2015).
3 The 87.7% factor for decarboxylation of is based on the molecular mass ratio between the two molecules and does not reflect the actual rate of conversion from THCA to Δ9-THC in practical applications or laboratory settings. The actual conversion rates of THCA to d9-THC under decarboxylation are between approximately 40% and 60% (Dussy et al 2004, Iffland et al 2016);
4 The promulgation of this limit in the rule has already devastated small- to medium-sized hemp farms as processors are backing out of their 2019 crop purchase contracts due to misperceptions of risk associated with marketing product derived from hemp in excess of the newly established limit. This is the case even though such hemp is fully compliant with applicable State and Federal law, and even though the USDA rule is explicitly inapplicable to hemp that was or is cultivated under the 2014 Farm Bill programs (which includes all hemp grown under in 2019 nationwide).
5 HempExchange, 2020
6 Orser, 2019
7 By increasing the likelihood that crops may be incorrectly condemned as non-compliant with the law, the rule inadvertently sets the stage for claims against the Federal government for unlawful regulatory takings. Claimants will have a strong basis to assert that any findings of non-compliance are arbitrary and capricious, including findings that might otherwise have merit (including crops that could be considered marijuana).
8 The Acceptable Hemp THC Level excludes approximately 68% of all resin hemp varieties currently grown in the U.S. (Orser 2019), and especially disadvantages smaller farms which mostly depend on such varieties for their economic viability.
9 We are only beginning to learn about the susceptibility of cannabis to the vast range of diseases that can affect it and other crops. Virus and viroid diseases are causing severe crop loss to hemp growers, and are easily transmitted mechanically, by insects such as aphids or nematodes or more likely by humans during the propagation process, and infect other important crops like grapes and citrus. Once a crop is infected, destruction of the plant is the only option to prevent further spread. A clean stock system much like the one used for citrus or ornamental plants should be considered and large-scale importation of industrial hemp material for planting should be restricted to clonal propagation materials that have undergone qPCR testing to verify that the importation does not pose a phytosanitary risk to US Agriculture, particularly from these pathogens:
Alfalfa mosaic virus, Cannabis cryptic virus, Hop latent virus, Lettuce chlorosis virus, Tobacco ringspot virus, Botrytis cinereal, Apple fruit crinkle viroid, Citrus bark cracking viroid, Hop latent viroid, Sunn-Hemp mosaic virus, Raspberry bushy dwarf virus, Fusarium oxysporum, Arabis mosaic virus, Cucumber mosaic virus Hop stunt viroid, Tobacco mosaic virus, Powdery Mildew Phytoplasma
*Agricultural Marketing Order: https://www.ams.usda.gov/rules-regulations/moa
**Specialty Crop Programs: https://www.ams.usda.gov/services/grants/scbgp