How Proposed and Current Regulations May Affect Your Hemp Business.

Federal Regulation of Hemp

In 2014, US Congress passed the Farm Bill, which authorized states to implement pilot programs to study the cultivation of and market for industrial hemp. Within the Farm Bill, Congress defined industrial hemp as “Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Congress then passed the Spending Bill, which prohibited the US Government from spending federal funds in contravention of the Farm Bill. This prohibition includes prohibiting the DEA from interfering with the interstate transportation of industrial hemp grown pursuant to the Farm Bill.

In March 2018, Congress extended this protection when it passed the Consolidated Appropriations Act, which explicitly states in Sec. 729 that “None of the funds made available by this Act or any other Act may be used… to prohibit the transportation, processing, sale, or use of industrial hemp, or seeds of such plant, that is grown or cultivated in accordance with subsection section 7606 of the Agricultural Act of 2014, within or outside the State in which the industrial hemp is grown or cultivated.” Additionally, Section 537 states that “None of the funds made available by this Act may be used in contravention of section 7606 (“Legitimacy of Industrial Hemp Research”) of the Agricultural Act of 2014 (Public Law 113–79) by the Department of Justice or the Drug Enforcement Administration.”

Hemp is a topic of much discussion for inclusion within the new Farm Bill (as the Hemp Farming Act of 2018), which is currently pending before Congress. The Senate’s language in regard to hemp would remove hemp’s designation as a controlled substances under the Controlled Substances Act and would also remove the current requirement that hemp is grown as part of a pilot program; however, the House version does not mention expanding or continuing the current hemp program.

That said, in November 2018, Republican Senator Mitch McConnell (and Senate Majority Leader) said that expansion of hemp is “guaranteed” to be in the final version of the new Farm Bill, which Congress hopes will pass before the end of the 2018 calendar year.

California’s Regulation of Industrial Hemp

Important developments within the hemp industry have also been occurring in California. Prior to October 2018, California’s Industrial Hemp Program was not promulgated in accordance with the Federal Farm Bill. The California Department of Food and Agriculture’s (CDFA’s) FAQ page stated that: “California law does not provide for CDFA to establish a pilot program or to participate in or promote research projects.” Therefore, any industrial hemp cultivation, processing, or marketing within California was likely not protected by the provisions of the Farm Bill and the Spending Bill.

Recently, however, it is clear that steps are being taken to move California’s hemp regulatory program forward. In October 2018, Senate Bill 1409 (“SB 1409”) was signed into law by Governor Brown. SB 1409 allows farmers to grow and produce hemp, and to produce hemp seed oil, fiber, and extract for commercial and industrial uses, in accordance with the 2014 Farm Bill. This new law will go into effect January 1, 2019.

Before farmers can plant hemp seeds, however, farmers must register with their local county agricultural commissioner. (Note that this registration process is different than the permitting process undertaken by those in the cannabis industry.) However, the registration process has not yet been opened by the CDFA. The CDFA’s website currently states that “[r]egistration to grow industrial hemp is not yet available,” “CDFA has not yet determined the date when registration will be available,” and that “[r]egistration fees to grow industrial hemp have not yet been established.” Please contact Rogoway Law Group if you’d like to discuss how proposed and current regulations may affect your hemp business.

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