Hemp industry stakeholders are celebrating the introduction of a House of Representatives funding bill that would extend a 2014 pilot program for the crop until 2021.
While the 2018 Farm Bill more broadly legalized hemp, it required the U.S. Department of Agriculture (USDA) to develop regulations for the market—and many farmers and processors have expressed concern about certain proposed rules. Industry groups, lawmakers and producers have been asking USDA to extend the earlier, 2014 Farm Bill pilot program, which they consider to be more flexible.
That program is set to expire on October 31. But if the new continuing resolution to keep the government funded and avoid a shutdown is approved, it would stay in effect until at least September 2021, also pushing back the implementation of USDA’s interim final rule on hemp and its derivatives.
Here’s the text of the hemp provision in the new funding bill:
“SEC. 122. Section 7605(b) of the Agriculture Improvement Act of 2018 (7 U.S.C. 5940 note; Public Law 115–334) is amended by striking ‘the date that is 1 year after the date on which the Secretary establishes a plan under section 297C of the Agricultural Marketing Act of 1946’ and inserting ‘September 30, 2021.'”
Stakeholders would then have more time to push USDA to adopt changes before it finalizes its hemp rules under the 2018 bill. They’ve said that testing and disposal requirements, as well as limitations on THC content, are particularly concerning provisions that threaten to inhibit the industry’s growth.
“We are very excited to see this language added into the House’s continuing resolution, and we will be enlisting our grassroots army behind an advocacy campaign to urge the Senate to concur,” Jonathan Miller, general counsel at the U.S. Hemp Roundtable, told Marijuana Moment. “This is a critical step to ensure full flexibility for hemp farmers as the USDA irons out its final rule during these difficult economic circumstances.”
Earlier this month, USDA reopened a public comment period for 30 days on its interim final rule (IFR) for the crop, soliciting public input on a series of specific provisions. The federal Small Business Administration recently asked the agency to extend that window by another 30 days.
“We see this as a positive development for hemp farmers across the country,” Patrick Atagi, board chairman of the National Industrial Hemp Council (NIHC), said in a press release. “The hemp industry isn’t any different from other facets of our economy that have been adversely affected by COVID. We’ve continued to tell Congress that a global pandemic has made it increasingly difficult for states to meet and develop plans to be submitted to the USDA for approval before the expiration of the pilot program.”
Colorado Gov. Jared Polis (D) said the new legislation “provides USDA and the states another year to work together on any challenges with the USDA’s proposed regulations.”
“Colorado is proud to be a national leader in the hemp industry and the continuation of this program will help support our local farmers and ranchers who are the foundation of this industry in our state,” he said. “I welcome the extension of the 2014 Farm Bill in the Continuing Resolution because it provides Colorado with additional time to engage stakeholders and federal agencies before finalizing our State’s hemp plan with the U.S. Department of Agriculture.”
It remains to be seen whether the Senate will introduce identical language. Senate Republicans and the White House have already voiced general opposition to the proposed continuing resolution in general, without discussing the specific hemp provision. That said, a coalition of hemp associations wrote to Sen. Cory Gardner (R-CO) last week, imploring him to advocate for an extension of the 2014 pilot program and also delay implementation of USDA’s IFR.
“As you are aware, stakeholders throughout Colorado (and nationwide), including both government and industry, continue to voice their numerous concerns related to several untenable standards contained in the USDA IFR,” the letter, led by led by Vicente Sederberg LLP and Hoban Law Group, states.
“To this end, Colorado is one of a number of states which has delayed the promulgation of a state plan in accordance with the 2018 Farm Bill, to allow Colorado’s hemp industry to remain in operation in accordance with the 2014 Farm Bill for at least the 2020 season, while USDA and its sister agencies are afforded the opportunity to meaningfully address the industry’s stated concerns,” it continues.
The letter was also signed by Buscher Law, Colorado Hemp Industries Association, National Cannabis Industry Association, Hemp Industries Association and Functional Remedies, LLC.
“I think it’s an important protection for the hemp industry to allow them to operate under a state regulated program, while there’s more time to address the problematic provisions under the federal IFR,” Shawn Hauser of Vicente Sederberg LLP told Marijuana Moment. “Especially given the difficulty and transitioning operations with the challenges of COVID and the time and work that needs to be done to address the federal rules, it’s important that these state programs be able to continue, and this is going to allow the hemp industry to succeed.”
Last month Gardner called on USDA to delay the implementation of the proposed hemp rules, citing concerns about certain restrictive policies that stakeholders oppose.
While Senate leadership might not be amenable to the House proposal overall, it’s still the case the Senate Majority Leader Mitch McConnell (R-KY) is a strong advocate for hemp and has made much of his alliance with the industry throughout his reelection campaign.
Pressure is on to get a continuing resolution approved, as the deadline to keep the government funded is in less than 10 days, at the end of this month.
For USDA’s part, it does seem to be taking seriously the feedback it’s received and may be willing to make certain accommodations on these particular policies. At the same time, it’s been in the process of approving hemp regulatory proposals—or requesting resubmissions with edits—from states that are moving ahead despite ongoing concerns about the 2018 provisions.
Certain states like North Carolina and Rhode Island have notified USDA that they intend to continue operating under the 2014 pilot program.
In July, two senators representing Oregon sent a letter to Agriculture Secretary Sonny Perdue, expressing concern that hemp testing requirements that were temporarily lifted will be reinstated in the agency’s final rule. They made a series of requests for policy changes.
Senate Minority Leader Chuck Schumer (D-NY) last month wrote to Perdue, similarly asking that USDA delay issuing final regulations for the crop until 2022 and allow states to continue operating under the 2014 Farm Bill hemp pilot program in the meantime.
State agriculture departments and a NIHC made a similar request to both Congress and USDA last month.
Perdue has said on several occasions that the Drug Enforcement Administration (DEA) influenced certain rules, adding that the narcotics agency wasn’t pleased with the overall legalization of hemp.
Separately, USDA announced last week that it is expanding its coronavirus relief program for farmers—and this time around, hemp cultivators are eligible for benefits.
Earlier this month, DEA released proposed rules to comply with USDA’s hemp rules. However, some industry players suspect that they’re really setting the stage to crack down on the newly legal market.
Read the letter the hemp groups sent to Gardner below:
This story was updated to include comment from Polis.
Photo courtesy of Brendan Cleak.
Congressman Files New Marijuana Banking Reform Amendment To Large-Scale House Bill
The House sponsor of a bill to protect banks that work with state-legal marijuana businesses announced on Friday that he is seeking to attach an amendment containing the reform to a broader bill dealing with research and innovation in the tech and manufacturing sectors.
Rep. Ed Perlmutter (D-CO), sponsor of the Secure and Fair Enforcement (SAFE) Banking Act, has expressed interest in finding another vehicle to pursue his proposal after it was stripped from a separate defense bill late last year. The congressman’s legislation has cleared the House in five forms at this point, only to stall in the Senate.
His latest attempt to get the reform enacted is by filing an amendment with the SAFE Banking language to the America COMPETES Act, which does not deal specifically with cannabis issues as drafted but was introduced in the House this week.
“Cannabis-related businesses—big and small—and their employees are in desperate need of access to the banking system and access to capital in order to operate in an efficient, safe manner and compete in the growing global cannabis marketplace,” Perlmutter, who is retiring from Congress after this session and committed to passing his bill first, said in a press release.
I have filed #SAFEBanking as an amendment to #AmericaCOMPETES b/c cannabis-related businesses – big and small – are in desperate need of access to capital & the banking system in order to operate in an efficient, safe manner & compete in the growing global cannabis marketplace.
— Rep. Ed Perlmutter (@RepPerlmutter) January 28, 2022
“The SAFE Banking Act is the best opportunity to enact some type of federal cannabis reform this year and will serve as the first of many steps to help ensure cannabis businesses are treated the same as any other legal, legitimate business,” he said. “I will continue to pursue every possible avenue to get SAFE Banking over the finish line and signed into law.”
It remains to be seen whether the America COMPETES Act will serve as a more effective vehicle for the cannabis banking bill than the National Defense Authorization Act (NDAA), where the language was successfully attached on the House side but later removed amid bicameral negotiations. Perlmutter said at the time that Senate leadership, which is working on comprehensive legalization legislation, was to blame for the decision to remove his amendment from the proposal.
The new SAFE Banking Act amendment will still need to be made in order by the House Rules Committee in order to be formally be considered on the House floor when the body takes up the research and innovation package. The deadline to file amendments was Friday, and the panel is set to take them up starting on Tuesday.
Even some Republicans are scratching their heads about how Democrats have so far failed to pass the modest banking reform with majorities in both chambers and control of the White House. For example, Rep. Rand Paul (R-KY) criticized his Democratic colleagues over the issue last month.
In the interim, federal financial regulator Rodney Hood—a board member and former chairman of the federal National Credit Union Administration (NCUA)—recently said that marijuana legalization is not a question of “if” but “when,” and he’s again offering advice on how to navigate the federal-state conflict that has left many banks reluctant to work with cannabis businesses.
Ohio Lawmakers Will Be Forced To Consider Marijuana Legalization As State Validates Activist Signatures
Ohio activists have collected enough signatures to force the legislature to take up the issue of marijuana legalization, the secretary of state’s office confirmed on Friday.
This comes about two weeks after the Coalition to Regulate Marijuana Like Alcohol (CTRMLA) submitted a final round of signatures for the measure. The petitions’ formal validation triggers the legislative review of legalization, but it does not require lawmakers to enact the reform.
The legislature now has four months to consider the campaign’s cannabis reform proposal. Lawmakers can adopt the measure, reject it or pass an amended version. If they do not pass the measure, organizers can then collect an additional 132,887 valid signatures from registered voters to place the issue on the ballot in November.
CTRMLA previously submitted petitions for the initiative but the state said they were short some 13,000 signatures, requiring activists to go back and make up the difference.
“We are ready and eager to work with Ohio legislators over the next four months to legalize the adult use of marijuana in Ohio,” CTRMLA spokesman Tom Haren said in a press release. “We are also fully prepared to collect additional signatures and take this issue directly to voters on November 8, 2022, if legislators fail to act.”
The measure that lawmakers will be required to consider would legalize possession of up to 2.5 ounces of cannabis for adults 21 and older, and they could also have up to 15 grams of marijuana concentrates. Individuals could grow up to six plants for personal use, with a maximum 12 plants per household.
A 10 percent sales tax would be imposed on cannabis sales, with revenue being divided up to support social equity and jobs programs (36 percent), localities that allow adult-use marijuana enterprises to operate in their area (36 percent), education and substance misuse programs (25 percent) and administrative costs of implementing the system (three percent).
A Division of Cannabis Control would be established under the state Department of Commerce. It would have authority to “license, regulate, investigate, and penalize adult use cannabis operators, adult use testing laboratories, and individuals required to be licensed.”
The measure gives current medical cannabis businesses a head start in the recreational market. Regulators would need to begin issuing adult-use licenses to qualified applicants who operate existing medical operations within nine months of enactment.
The division would also be required to issue 40 recreational cultivator licenses and 50 adult-use retailer licenses “with a preference to applications who are participants under the cannabis social equity and jobs program.” And it would authorize regulators to issue additional licenses for the recreational market two years after the first operator is approved.
Individual municipalities would be able to opt out of allowing new recreational cannabis companies from opening in their area, but they could not block existing medical marijuana firms even if they want to add co-located adult-use operations. Employers could also maintain policies prohibiting workers from consuming cannabis for adult use.
Further, regulators would be required to “enter into an agreement with the Department of Mental Health and Addiction Services” to provide “cannabis addiction services,” which would involve “education and treatment for individuals with addiction issues related to cannabis or other controlled substances including opioids.”
With respect to social equity, some advocate are concerned about the lack of specific language on automatic expungements to clear the records of people with convictions for offenses that would be made legal under the legislation. That said, it does include a provision requiring regulators to “study and fund” criminal justice reform initiatives including expungements.
Ohio voters rejected a 2015 legalization initiative that faced criticism from many reform advocates because of an oligopolistic model that would’ve granted exclusive control over cannabis production to the very funders who paid to put the measure on the ballot.
Activists suspended a campaign to place another measure on the 2020 ballot due to the coronavirus pandemic.
Aside from the new voter initiative, state lawmakers from both parties are separately working to advance marijuana reform.
A legalization bill that was the first of its kind to be introduced in the Ohio legislature last year would legalize the possession, sale and cultivation of cannabis by adults. It’s being championed by Reps. Casey Weinstein (D) and Terrence Upchurch (D).
A pair of Ohio Republican lawmakers similarly filed a bill to legalize marijuana in the state in December. Reps. Jamie Callender (R) and Ron Ferguson (R) first announced their plan to push the legislative reform proposal in October and circulated a co-sponsorship memo to build support for the measure.
There are also additional local reform efforts underway in Ohio for 2022.
After voters in seven cities approved ballot measures to decriminalize marijuana possession during last November’s election—which builds on a slew of previous local reforms in the state—campaigns are now looking to enact decriminalization in Marietta, Rushville, Rutland, Shawnee, McArthur and Laurelville.
Ohio marijuana activists already successfully proved that they turned in enough valid signatures to put a local decriminalization initiative before Kent voters after having missed the 2021 ballot due to a verification error on the part of county officials. That measure is now expected to go before voters this November.
Top Federal Drug Official Says Marijuana Use ‘Stable’ Among Youth At Prohibitionist-Hosted Panel Sponsored By D.A.R.E.
A top federal drug official participated in a panel hosted by a prohibitionist group and sponsored by D.A.R.E.—and she again reiterated that data shows youth marijuana use has remained stable “despite the legalization in many states.”
While National Institute on Drug Abuse (NIDA) Director Nora Volkow expressed concerns about certain cannabis trends related to potency, commercialization and use by pregnant women, she affirmed that surveys funded by her own federal agency have demonstrated that adolescent marijuana use is “stable,” despite repeated arguments from prohibitionists that legalization would lead more young people to experiment with cannabis.
The event was hosted by Smart Approaches to Marijuana (SAM), an anti-legalization group. SAM President Kevin Sabet and the organization’s co-founder former Rep. Patrick Kennedy (D-RI) led the discussion.
“The higher the content of THC, the greater the likelihood that you will become addicted to the drug… The content of THC has gone up at least 4-fold.”
– Dr. Nora Volkow, M.D., Director of the National Institute on Drug Abuse (NIDA)
— SAM (@learnaboutsam) January 28, 2022
Sabet said that data on youth use has showed varying results in states that have legalized cannabis and asked Volkow to weigh in on the issue. She replied that federal data “have not been able to see large differences in terms of prevalence” of cannabis consumption among young people in legal and non-legal states.
The official made similar comments in an interview with Marijuana Moment late last year.
That said, Volkow said that they have seen some differences when it comes to consumption rates among adolescents for edible cannabis products.
“But the effects are not large, and one of the things that also certainly surprised me [is] the rate overall, the prevalence rates of marijuana use among teenagers, have been stable despite the legalization in many states,” she said, adding that there are some concerns about increased frequency of use and limitations in data collection with respect to dosages being taken.
Volkow also commented on a recent federally funded survey that found illicit drug use by young people has taken a significant plunge in the last year, though she largely attributed that to the reduced social interaction resulting from COVID-19 policies across the country.
“Interestingly what we’ve observed during the COVID pandemic is, across schools in the United States, the prevalence of drug use has gone down,” she said, “which likely very much reflects the fact that kids don’t have the opportunity to interact with others, and drug taking at that stage is a peer pressure behavior.”
The official also briefly addressed the fact that she feels criminalizing people over drugs in the first place is the wrong policy approach—a point she’s made repeatedly in interviews and blog posts.
She said that “criminalization has created a system for that allows a structural racism to be implemented, you can control people, and that’s a horrible policy. This criminalization actually opens up our eyes that well, yes, we need to change that.”
However, she said that “liberalizing and making the drugs widely available, with no counter messaging,” is not the alternative she would recommend.
“We need to provide them [addicts] with treatment, so just to say ok we are going to liberalize everything… and not support treatment for those people under those conditions, I actually think it is quite irresponsible.”
– Dr. Nora Volkow, M.D., Director of NIDA
— SAM (@learnaboutsam) January 28, 2022
While the SAM-hosted event did not touch specifically on psychedelics policy, Volkow has also recently discussed that issues, especially as data has shown an increase in use of the substances among adults.
She said people are going to keep using substances such as psilocybin—especially as the reform movement expands and there’s increased attention being drawn to the potential therapeutic benefits—and so researchers and regulators will need to keep up.
Volkow also mentioned that NIDA is “pleased” the Drug Enforcement Administration recently announced plans to significantly increase the quota of certain psychedelic drugs to be produced for use in research.
Photo courtesy of Philip Steffan.