On Feb. 27, 2020, the U.S. Department of Agriculture (USDA) sent a flash update to the hemp industry announcing changes to some of the more complex aspects of the interim final rule for the establishment of a U.S. Domestic Hemp Production Program. This update provides welcome relief as it loosens certain immediate requirements related to lab testing and clarifies other areas, such as appropriate methods of disposal.
Here are key highlights for lab testing and methods for crop disposal in USDA’s industry update:
- Lab Testing. Until Oct. 31, 2021, or until the interim final rule is finalized and published, U.S. hemp producers will no longer need to hunt down a U.S. Drug Enforcement Administration laboratory to test a hemp crop for compliance with THC levels. USDA cited the lack of available DEA labs to test the hemp crops in conjunction with its loosening of this restriction. Nonetheless, USDA emphasized that any laboratory testing hemp crops must still follow the requirements outlined in the interim final rule; most notably post-decarboxylation or other reliable methods to test for total THC. Unregistered labs, in the meantime, should begin the registration process with DEA.
- Methods for Disposal. Farmers will be able to dispose of a “hot crop” on-site in accordance with state, federal or tribal law. In a nod to logistical difficulties, USDA admitted that involving state, tribal and local law enforcement would be a burden and negative resource impact. Within the alert, USDA provides additional information regarding appropriate methods of disposal. For lenders, investors and purchasers, this change could signal a relaxation of diligence surrounding use of outside vendors and disposal policies temporarily when evaluating hemp operations. For states and tribes, it relaxes potential resource drain in the immediacy as USDA works to finalize the interim final rule and states and tribes begin implementing or submitting their programs to USDA.
At the time of this publication, USDA has received more than 4,685 comments in response to the interim final rule, a number of which highlighted the compliance difficulties with testing and disposal. While the USDA did not specify the reasoning for its decision to provide this update, the decision is likely in response to some of the comments and could further indicate the lack of the government’s capacity or readiness to effectively enforce in this emerging industry.
McGuireWoods’ team will continue to monitor and provide updates as the interim final rule proceeds toward finalization.