HEMP AND LAW ENFORCEMENT - KNOW YOUR RIGHTS
As hemp and hemp products continue to move into the mainstream of the American and world economies, questions arise over what is legal and what might not yet be so. What does the Agricultural Improvement Act of 2018 (the “Farm Bill”) say about hemp legality and what is the role of law enforcement?
5 Key Takeaways
1. Hemp is not a Controlled Substance under Federal Law.
Passage of the Farm Bill expressly and permanently excludes hemp – including cannabinoids, extracts, and derivatives therefrom – from the Controlled Substances Act. Moreover, the Farm Bill and its incorporated hemp amendments created a framework for federal regulation of commercial hemp cultivation. The Farm Bill established a limited number of broad standards for states, territories and Indian tribes to follow, in creating their own hemp regulatory programs that would be consistent with the new federal framework. The Farm Bill also created the opportunity for the development of vast new markets for hemp and hemp products.
2. The Farm Bill Prohibits States from Interfering with the Interstate Transport of Hemp.
The Farm Bill specifically provides:
“[n]o State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with the [Farm Bill] through the State or the territory of the Indian Tribe, as applicable.”
Thus, for those transporting hemp between states with established programs – Oregon and Colorado, for example – authorities cannot lawfully interfere with that shipment.
3. The USDA Agrees!
On May 28, 2019, the USDA’s Office of General Counsel issued an opinion generally confirming many of the positive and promising components of the Farm Bill including that hemp is not a controlled substance and that states cannot interfere with the interstate transport shipment. USDA specifically condemned recent law enforcement actions as contrary to the Farm Bill, such as those occurring in Idaho (see Big Sky Scientific LLC v. Idaho State Police, Case No. 19-CV-00040). See a full copy of the opinion here.
4. Different laws in different places.
Despite the protections afforded by the Farm Bill, it simply created a framework for federal regulation of cultivation. But, that isn’t the end of the story. USDA still needs to finalize its regulations and many states still need to enact legislation and enact regulations concerning hemp, whether for: (i) a commercial hemp program; (ii) more stringent regulations than contemplated under the emerging federal standards, or (iii) to prohibit hemp cultivation and sales altogether. While the vast majority of states have adopted commercial hemp laws and have created or are in the process of creating hemp regulatory programs, some have done nothing.
5. Protection of interstate commerce in hemp is a work in progress.
Hemp is not out of the woods – yet. Law enforcement and regulatory authorities still present an uneven and often murky picture of what market actors in the hemp industry can and cannot do. The Farm Bill expressly protected hemp that was produced in accordance with federal law or an approved state plan, and allowed shipment of such material across state lines. Meanwhile, a rash of high-profile seizures by state law enforcement authorities of hemp in transit across state lines – such as the aforementioned case in Idaho – has raised contentious issues about the free movement of this valuable commodity in interstate commerce.
6. Be able to prove your material is hemp with supply chain documentation.
At the heart of many of the remaining questions about the legal status of hemp, especially with respect to the movement of hemp and hemp products in interstate commerce, is how to distinguish legal hemp from marijuana. Marijuana remains illegal under federal law and the laws of most states.
Those who wish to transport hemp between states, even between states that have their own very favorable hemp laws, continue to face much risk from law enforcement and regulatory authorities in transit states that are not so friendly. One of the best ways to manage that risk is to always accompany hemp and hemp products in transport with clear and adequate documentation to identify it as legally grown, processed and manufactured hemp, not marijuana. Such documentation could include, among other things:
A shipping manifest describing the hemp or hemp products;
Declarations from the state of origin that the hemp described in the manifest was legally registered, grown and harvested in compliance with that state’s laws;
Laboratory data establishing that the hemp or hemp product is at or below the threshold concentration of THC for marijuana;
Documentation establishing a chain of custody for the hemp or hemp products, allowing regulatory and law enforcement authorities to trace through all of the legally compliant steps that were taken to produce the hemp or hemp products.
In fact, in June 2019, USPS acknowledged hemp and the Farm Bill, by revising its policy to conform with the Farm Bill, requiring that:
The mailer complies with all applicable federal, state, and local laws (such as the Agricultural Act of 2014 and the Agricultural Improvement Act of 2018) pertaining to hemp production, processing, distribution, and sales; and
The mailer retains records establishing compliance with such laws, including laboratory test results, licenses, or compliance reports, for no less than 2 years after the date of mailing.
HEMP IS LEGAL.
President Trump signed the Agricultural Improvement Act of 2018 ( the “2018 Farm Bill”), on December 20, 2018. Now, hemp is defined as an agricultural commodity in §297A of the Agricultural Marketing Act of 1946, as follows:
The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.
What Does the Farm Bill Legally Do?
Specifically, the Farm Bill serves to clarify and affirm the rightful place of raw hemp as an agricultural commodity, alongside corn and wheat. Notably, these hemp provisions in the Farm Bill state, in part:
Hemp is expressly excluded from treatment as “marihuana” under the federal Controlled Substances Act (“CSA”), meaning hemp is not, and cannot be considered, a controlled substance under federal law and that U.S. Drug Enforcement Administration (“DEA”) does not maintain any authority over hemp;
Instead, the U.S. Department of Agriculture (USDA) shall regulate the cultivation of hemp at a federal level (to the exclusion of DEA) and is instructed to implement regulations according to the Farm Bill;
“Hemp” is defined more expansively to include reference to – and protect – cannabinoids, derivatives and extracts;
Individual states retain the right (which many exercised in early 2019 and more are anticipated to do so in early 2020) to enact legislation and promulgate regulations at the state and local level, subject to approval by USDA;
Hemp farmers are specifically authorized to access crop insurance, grants and certifications;
Tribal governments are specifically authorized to cultivate and produce hemp;
Interference with interstate transport of hemp and hemp products is expressly prohibited;
The 2014 version of the Farm Bill is to be repealed within 1 year USDA implements its program; and
The Farm Bill does not affect the Federal Food, Drug and Cosmetic Act, which provides the U.S. Food and Drug Administration (“FDA”) authority to regulate permissible ingredients in ingestible products.
USDA is undergoing a rulemaking process, starting in March 2019 and expected to be finalized in late 2019, ahead of the 2020 planting season, upon the finalization of which, USDA will review and approve state plans submitted by a state department of agriculture;;
Accordingly, a flurry of states enacted hemp legislation in accordance with the 2018 Farm Bill in anticipation of USDA regulation in late 2019, and a number of additional states are expected to enact or amend legislation in early 2020 when many legislatures re-convene;
In the meantime, the 2014 Farm Bill remains intact to serve as a “bridge” to full implementation of the 2018 Farm Bill;
Correspondingly, FDA is undertaking a review and rulemaking process concerning hemp-derived products, including those with cannabinoids, starting with a May 31, 2019 hearing, to ensure such products are appropriately contemplated as permissible ingredients; and
Resolve bumps in the road that are likely to arise as federal, state and local legislators and regulators work to implement the tenets of the Farm Bill over the coming months and years.
HLG Hemp Practice Group