Mid-Atlantic states weigh effects of new hemp guidelines

The USDA predicts domestic hemp producers will see returns rise from $362 million this year to $570 million in 2022. (Photo by Jonathan Cribbs)

State officials in Maryland, Delaware and Virginia said last week they were weighing the ramifications of the U.S. Department of Agriculture’s recently released hemp guidelines.

The proposed regulations, published in the Federal Register Oct. 31 for public comment, lay out how hemp — now an official U.S. crop — can be legally raised, tested, processed and sold to consumers.

The guidelines legitimize and open the country’s surging hemp market. The federal government legalized cultivation of the crop in the 2014 Farm Bill, but only for research purposes.

The crop can be processed into many products, including rope, building materials, auto parts, animal feed, cosmetics, oil and food additives. The USDA predicts domestic hemp producers will see returns rise from $362 million this year to $570 million in 2022.

Virginia, which has already legalized hemp production for all growers, was drafting a federally mandated plan for hemp production last week, said Erin Williams, a senior policy analyst at the state’s agriculture department.

“We are encouraged that the USDA has put out the rules because this helps us move toward the 2020 growing season,” she said. “I’m hopeful the growers won’t have too many adjustments to make.”

Under the guidelines, all farmers must be licensed or authorized under a federal, state or tribal hemp program, all of which must be approved by the USDA. Farmers may not grow hemp in states that haven’t legalized it. (Maryland and Delaware are in the first year of a pilot program that pairs select growers with research universities.)

But the guidelines’ new THC regulations are the biggest concern among growers nationally, industry leaders said. Hemp is a form of cannabis sativa, along with marijuana, but growers are required to limit its THC level to 0.3 percent. THC, short for tetrahydrocannabinol, is the primary psychoactive compound in marijuana. Regulators will force farmers to destroy a hemp crop whose THC level exceeds that limit.

THC levels are volatile, however, and seeds grown in different geographic areas can produce crops with varying THC levels. Other factors such as soil, weather and a grower’s inexperience can impact THC as well. Questions also remain about the lack of testing uniformity across the country.

The guidelines are too strict, said Erica Stark, executive director of the National Hemp Association. It’s easy for a hemp farmer to accidentally produce a crop of, say, 0.5 percent THC, she said. THC levels in illegal marijuana typically hovered between 3 and 4 percent in the 1990s, though concentrations have been steadily rising since.

“Even up to 1 percent, no reasonable person would consider that marijuana,” she said. “In my view, they are treating hemp farmers like they are guilty of being marijuana farmers until they prove that they are not.”

All hemp will need to be tested at labs certified by the federal Drug Enforcement Agency. There are only about 150 such labs across the country, Stark said, and the new guidelines require that hemp samples are tested 15 days before harvest. Both Stark and the American Farm Bureau Federation have expressed concern that backups could occur.

“The THC concentration typically increases as the plants mature, so a crop could potentially rise above the threshold if the testing process isn’t completed early enough in those 15 days,” wrote Michael Nepvuex, a Farm Bureau economist, in an Oct. 31 article on the bureau’s website. “Additionally, does the 15-day window mark the beginning of harvest or the end of harvest? Some fields may take multiple days to harvest and could conceivably be started before but finished after the 15-day window closes.”

A spokesperson for the Maryland Department of Agriculture said the department was still reviewing the guidelines and declined to comment. But changes to the way THC is calculated could be a significant problem for Maryland growers, said Barry Pritchard, owner of SunX Analytical, an industrial hemp processing and testing lab in Cambridge, Md. SunX tested nearly half of the state’s 65 hemp farms this year, he said.

“If one follows the strict definition of the law, every farm in Maryland that was compliant this year growing the same crop would be noncompliant next year,” Pritchard said. “So it’s a real challenge.”

Some states, he said, see loopholes in the guidelines that will allow them to proceed next year as they did this year.

“That’s not how I read it,” Pritchard said. “So it’s really up in the air.”

Delaware’s agriculture department is wrapping up its first pilot program, which included 15 growers, said Stacey Hoffman, a department spokesperson. The state limited each grower to just 10 acres.

“I think Delaware was very wise to limit to the 10 acres per grower because it reduces the risk for the grower,” she said. “Farmers have thanked us actually for keeping it to the 10.”

The USDA guidelines are interim rules that will be replaced by permanent guidelines in two years. The USDA is taking public comments for 60 days starting Oct. 31. Information about submitting comments can be found at https://www.ams.usda.gov/rules-regulations/establishment-domestic-hemp-production-program.