hemp tradeoffs

New federal regulations have created benefits for hemp farmers, but they come with tradeoffs.

Access to USDA benefits may prove a tough trade-off for hemp farmers whose crop will face stricter testing protocols under new federal regulations.

Next year, hemp growers will be able to take advantage of crop insurance, farm loans and conservation programs offered by the USDA due to interim rules for the crop set to become effective Oct. 31.

Because hemp had long been considered a type of federally illegal marijuana until now, growers haven’t been able to use those USDA programs even in states where the crop is legal.

In exchange for federal legitimacy, hemp will eventually come under USDA testing protocols that may be less forgiving of THC, the psychoactive substance found in cannabis, than regulations established by some state governments.

“It’s just more of the regulations that are just crippling,” said Rick Bush, a hemp grower near Salem, Ore. “It makes it impossible to comply because there is not a hemp strain that will meet that criteria.”

Exceeding the USDA’s limit of 0.3% THC would cause a hemp crop to be considered marijuana, which remains illegal under federal law and would then have to be destroyed under the new USDA regulations.

State governments have also set the limit for hemp at 0.3% THC, but they vary in how the level of that substance is calculated.

In Oregon, for example, cannabis has been considered hemp as long as its level of “delta-9” THC is below 0.3%.

In 2020, however, the state is changing its standard to require less than 0.3 percent of delta-9 THC combined with THCA, which converts into the mind-altering delta-9 form when exposed to heat.

Basically, the change means some cannabis that qualified as hemp in previous years based on delta-9 THC alone will now be considered “hot” because the added level of THCA will make the crop exceed the 0.3% limit.

Oregon revised its testing protocol in anticipation of the new USDA rules, which turned out to be prescient because the federal government will also require the testing of “total” THC, rather than the delta-9 form alone.

It’s unclear how much of Oregon’s previous hemp crops would have been too “hot” to sell under the new protocol, since farmers were only required to test for delta-9, not THCA, said Sunny Summers, cannabis policy coordinator for the Oregon Department of Agriculture.

The new USDA regulations implement provisions of the 2018 Farm Bill, which effectively legalized hemp nationwide. Before that, state governments were able to enact pilot programs for growing hemp under the 2014 Farm Bill.

State governments will have one year from the effective date of the new federal rules to clear their plans for overseeing hemp with the USDA. Until then, they will be able to continue operating under their pilot program rules.

Oregon’s shift to the stricter THC testing protocol in 2020 raised concerns that hemp harvested this autumn would have to be destroyed in January if it contains enough THCA to push it across the 0.3% limit for THC.

However, the Oregon Department of Agriculture’s new protocol will not apply retroactively to hemp grown in 2019, only to crops produced after the change became effective, said Courtney Moran, an attorney and president of the Oregon Industrial Hemp Farmers Association.

“It doesn’t change to non-compliant hemp,” she said. “If it’s harvested as hemp, it stays as hemp.”

Realistically, the stricter USDA standards will likely force hemp farmers to harvest the crop earlier to avoid having it cross the threshold into marijuana, which in turn will reduce the levels of cannabidiol, or CBD, contained in the plant, Moran said.

While CBD isn’t psychoactive and is considered to have healthful properties, such as treating inflammation, concentrations of the substance tend to be associated with higher levels of THC.

“There’s definitely a correlation between the two,” she said.

Early harvesting will be an immediate solution to the problem until hemp cultivars are developed with high levels of CBD that remain low in THC, Moran said. “Breeders have been working on it and farmers have been looking for it.”

Rick Bush, the hemp farmer near Salem, said he’s disappointed in the hype about hemp and it’s profit-earning potential when there’s insufficient capacity to process Oregon’s 60,000-acre crop.

The stricter testing protocols for THC will result in farmers growing hemp to maturity that turns out too “hot” to be salable, he said. “They poured money on the ground and expected it to multiply, but it’s not that simple.”

While Bush considers the USDA’s testing standard arbitrary, he acknowledges the transition to federal regulation may cool the eagerness to invest in hemp.

“At least we have one year to figure out whether we’re going to get in or get out,” he said.

Barry Cook, a hemp grower near Boring, Ore., said he’s still reading the USDA rules but is concerned about how hemp will be regulated after harvest.

Limiting the total THC level to 0.3% may be justified for “smokeable flower” that is sold directly to consumers, he said.

However, hemp is often further processed to extract CBD, which in turn also elevates the THC levels beyond 0.3%, Cook said.

This “crude oil” is further processed to remove or dilute the THC, bringing it back into compliance with the 0.3 percent level, he said.

However, the temporary step involving elevated THC and CBD is necessary as the hemp is brought toward the “finish line” of consumable product, which should be understood by regulators, Cook said.

“You can’t penalize the process as we move toward compliance,” he said. “Everything is getting lumped together, and that’s the problem.”

Under the Oregon Department of Agriculture’s existing regulations, the elevated level of THC in hemp extracts is considered allowable as long as it’s eventually stripped out or sufficiently diluted, said Summers, the agency’s cannabis policy coordinator.

“Right now, as long as it’s not sold to an end consumer, it is legal,” she said.

Under the interim federal rules, extracts and derivatives of cannabis with more than 0.3% THC are considered marijuana.

How the USDA will approach the issue of hemp processing for CBD is unknown at this point, Summers said. “The USDA doesn’t really address what happens when it leaves the farm. They don’t cover processing.”

I've been working at Capital Press since 2006 and I primarily cover legislative, regulatory and legal issues.

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