After continued pressure from government officials and industry players to regulate the hemp industry, the United States Department of Agriculture finally released its interim final rule on hemp. On top of the actual rules, States and Tribes were instructed to create their own state plans and submit them to the USDA for approval.
Although the USDA issued the hemp rules in October, the agency put a pause on approving individual federal applications to give time to State and Tribal governments to draw up their plans. Farmers interested in cultivating industrial hemp in 2020 can now submit their applications directly to the USDA for approval.
Those interested in planting hemp but live in a state that doesn’t have a hemp program will also be allowed to submit their applications after November 30, and they will be granted a USDA hemp production license.
However, producers living in states that have banned hemp cultivation outright such as Mississippi, Idaho, New Hampshire and South Dakota, will not be issued federal licenses.
Also, individuals who have been convicted of a felony related to a controlled substance in the last 10 years aren’t eligible for a license from any state, tribe and the USDA. Each USDA Hemp Program Application has to be accompanied by an FBI criminal history report.
Before the USDA published its interim final rule on hemp, farmers were cultivating hemp under the 2018 Farm Bill. The bill, passed in December, classified cannabis with less than 0.3% THC (delta-9 tetrahydrocannabinol) content as legal industrial hemp and gave farmers in all states and tribes the green light to farm the cash crop.
While this was a monumental stride for the hemp industry, the legislation provided barely any regulatory framework for the raging industry that was sure to grow. Quite a number of the farmers who planted hemp under the 2018 Farm Bill had a hard time. Banking and insurance institutions refused to work with them, and they had to deal with police who didn’t know the difference between legal hemp and illegal marijuana.
Hemp grown under the 2018 Farm Bill will not be affected by the USDA’s new hemp rules. But, farmers who wish to cultivate the cash crop in 2020 will have to apply for a license under a State hemp program, Tribal hemp program or the USDA hemp program.
The USDA has published a list of submitted State and Tribal hemp production programs that are pending approval or have been approved. Applications for the hemp cultivation license can either be sent electronically or through the mail.
Experts say industry players like SinglePoint Inc. (OTCQB: SING) and HTC Extraction Systems (TSX.V: HTC) will heave a sigh of relief now that the federal regulator has availed an extra option for farmers who wish to be licensed to grow hemp.
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