The Agriculture Department released details Tuesday of a long-awaited regulatory process to guide states in the production and transportation of industrial hemp. 

An interim final rule, which fulfills a mandate of the 2018 farm bill, lays out regulations for approval of plans submitted by states and Indian tribes for the domestic production of hemp. 

The rule establishes a federal plan for producers in states or on reservations that won’t have USDA-approved plans. States will no longer be allowed to stop the interstate shipment of hemp that is lawfully produced under the regulations.

However, under the farm bill, states can continue to ban production of the crop within their borders; hemp farming is currently legal in 46. South Dakota, Idaho, Mississippi and New Hampshire are the only states that have not legalized it.

The rule includes procedures for tracking the land where hemp is grown, testing for concentration levels of THC, the psychoactive compound found in higher amounts in marijuana, and for disposing of non-compliant plants. There also are procedures for sharing information with law enforcement.

The rule will take effect when it is published in the Federal Register on Thursday. 

USDA sought to “provide a fair, consistent and science-based” regulatory framework for states, tribes and individual producers to follow, said Agriculture Secretary Sonny Perdue. Perdue said the rule is being issued, as promised, in time for the 2020 season. 

“At USDA, we are always excited when there are new economic opportunities for our farmers, and we hope the ability to grow hemp will pave the way for new products and markets," he said. 

Perdue said the testing protocols will “ensure that hemp grown under this program is hemp and nothing else." Under the farm bill, hemp cannot contain more than 0.3% THC. Hemp would have to be tested at labs registered with the Drug Enforcement Administration.

In addition to the rule, USDA is also releasing guidelines with specific steps for sampling and testing hemp for THC. The guidelines provide information for inspectors and hemp-testing laboratories. 

There will be a 30-day waiting period for USDA to start licensing producers whose states do not have their own regulatory plans. 

Once state and tribal plans are in place, hemp producers will be eligible for a number of USDA programs, including insurance coverage through whole farm revenue protection. But Bill Northey, USDA's undersecretary for farm production and conservation programs, said that excessive levels of THC won't be a covered loss under the whole farm policies. 

Many hemp producers also will be eligible for the Non-insured Crop Disaster Assistance Program. 

The Farm Service Agency also will offer operating, ownership and on-farm storage loans for next year, Northey said. 

An estimated 500,000 acres of hemp were grown this year, but the industry's future growth is uncertain, said Greg Ibach, USDA's undersecretary for marketing and regulatory programs. Producers will likely be evaluating their plans based on their experience this year with growing and marketing the crop, he said. 

Senate Majority Leader Mitch McConnell, who singlehandedly ensured that the 2018 farm bill would legalize and facilitate the production of industrial hemp, said he "impressed upon USDA the need to finalize this new framework before the 2020 growing season."

Download and read the rule here

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