Now that the White House Office of Management and Budget (OMB) has given the go-ahead to the U.S. Department of Agriculture’s (USDA) federal hemp regulations, the draft of interim rules for the industry is live.
Even with the 2018 Farm Bill legalizing hemp as a crop, the lack of federal guardrails has dragged several prohibition-era problems into the present. Licensed hemp businesses continue to have trouble holding down relationships with banks and insurance providers. A snafu in Maine last week led to a strongly worded letter from the governor, who urged the approval of these long-awaited rules.
The USDA published its draft on Tuesday morning, and already industry stakeholders and observers are looking ahead to a new era in the business.
“The USDA’s issuance of federal hemp regulations represents a major agricultural, economic, and environmental milestone for our country,” Shawn Hauser, partner and chair of the hemp and cannabinoids practice group at Vicente Sederberg LLP, said in a public statement. “The USDA has established a regulatory framework that will serve as an infrastructure for the U.S. hemp economy. These interim rules provide long-awaited clarity, not only for farmers, but also for regulators and service providers like banks and insurance companies, who were hesitant to work with hemp-related businesses without federal guidelines.
“The rules also provide hemp farmers with important safeguards and benefits generally afforded to agricultural program participants,” Hauser continued, “such as protection against state interference of interstate commerce, and eligibility for federal grants and programs. While the hemp industry has seen incredible growth since the passage of the 2014 farm bill, it has been stifled by the lack of federal regulation. The establishment of federal regulations governing hemp as an agricultural crop is a watershed moment for the entire cannabis industry.”
A major theme in the release of these rules is standardization. Now, the newly legal U.S. hemp industry can look to the USDA for guidance across a spectrum of issues.
While the 2018 Farm Bill legalized hemp cultivation, processing, transport and sales on a federal level, the bill also allowed states to develop their own regulations for this new industry. Some states elected to carry on their 2014 Farm Bill-era industrial hemp pilot program rules; others set up guidelines that were far more restrictive than what even Congress had envisioned.
The goal was to have some sort of clarity from the federal government in time for the 2020 growing season. Now that the document is approved and published, these rules provide not just a