In October 2019, the U.S. Department of Agriculture (USDA) released the much-awaited interim final rule on hemp, finally giving the budding hemp industry a comprehensive regulatory structure. However, as hemp producers went through the interim final rule, they realized that it wasn’t the Hail Mary many thought it would be. In the following months, there have been numerous complaints that the federal rules are too tough, and they might spell doom for the sector.
In response, a number of states have opted out of implementing the USDA’s hemp rules, instead choosing to run their hemp programs under the 2014 pilot research program, or their individual hemp rules which will expire this year.
Colorado is now the latest hemp state to withdraw its request to win federal approval to regulate hemp in 2020. According to the state’s governor, attorney general, and agriculture commissioner, the state will use its old hemp rules until they expire this fall. This comes after the officials sent a letter to the USDA registering their complaints against the agency’s interim final rule on hemp.
“Rather than serve the public interest, the USDA rule subverts it by precluding experienced stakeholders from shaping the regulatory scheme upon which their livelihoods depend,” the officials wrote.
The officials also added a list of complaints against the interim rules, with most of them applying to most hemp producers who have spoken against the new federal hemp rules. They talked about the lack of seed breeding guidance to the fact that the USDA hasn’t set up a system to document the cash crop for interstate transportation. According to the officials, many of these rules are ‘unnecessary, burdensome and may potentially have a devastating impact on the industry.’
Gary Fish, Maine’s state horticulturist, says that they looked at the uncertainty of what’s going on at the USDA and decided that it would be better for the state’s hemp growers if they went on with the previous state program, instead of implementing the federal hemp rules. “Then hopefully after they figure out what they’re going to do over the summer, we would then react to whatever changes they make and submit a plan after they’ve made their potential amendments to the interim final rule.”
Apart from complaints that the rules are too stringent, state officials have also stated that they wouldn’t be able to pull together plans that would meet federal requirements in time to implement the rules in 2020. Whitney Place, Minnesota’s Deputy Agriculture Commissioner, says it’s even more difficult since the USDA included rules that state officials opposed.
“It became really clear that there’s no way we’d be able to stand up a program that would meet the current interim final rule this year,” she says.
Experts say stakeholders in the industry, such as Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) and Dama Financial, will be watching keenly to see how the USDA responds to this pushback against the federal hemp rules.
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