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Lawmakers And Industry Stakeholders React To USDA Hemp Rules Announcement

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The U.S. Department of Agriculture (USDA) released much-anticipated proposed rules governing hemp on Tuesday, and the development was promptly met with applause from lawmakers and industry stakeholders.

While USDA said it is waiting until the conclusion of a 60-day public comment period before working to approve state and tribal hemp plans, the draft document it unveiled signals that farmers will soon be able to take full advantage of the newly legal crop—something that members of Congress from both sides of the aisle have been fighting for since it was federally legalized under the 2018 Farm Bill.

Here’s how people are reacting:

Senate Majority Leader Mitch McConnell (R-KY) wasted no time getting to the Senate floor to celebrate USDA’s announcement. As the chief proponent of the farm bill’s hemp legalization provision, the senator has repeatedly pushed the department to quickly implement regulations to unleash the industry’s potential.

Agriculture Secretary Sonny Perdue “will release a new USDA regulation to implement my initiative and move hemp closer to being treated just like every other commodity,” he said. “This new policy will help farmers around the country continue pioneering this crop into the 21st century. And I’m proud to say Kentucky is prepared to take the lead.”

“This year alone, hemp is growing on more than 26,000 acres in Kentucky across 101 of our 120 counties. It supports hundreds of jobs and tens of millions in sales. So I impressed upon USDA the need to finalize this new framework before the 2020 growing season. And I’d like to thank Secretary Perdue and the USDA for fulfilling this commitment with the announcement we are expecting later this morning.”

McConnell stressed that “our work to support the future of hemp is hardly over,” noting ongoing conversations within the Food and Drug Administration (FDA) about developing rules providing for the lawful marketing of hemp-derived CBD products.

“There will inevitably be ups and downs as this new industry develops, but today’s announcement is another crucial step,” he said. “So, it’s a privilege for me to stand with Kentucky farmers every step of the way. Together, we’ll continue charting hemp’s course into the future.”

Sen. Ron Wyden (D-OR), another vocal advocate for hemp, also weighed in on USDA’s interim rule.

“I’ve long said that if you can make and sell hemp products in America, you should be able to grow hemp in America,” he said in a statement. “Congress passed my bipartisan Hemp Farming Act, and now federal regulations must be updated to reflect hemp’s legal status.”

“The USDA interim rule is an important first step to ending uncertainty for farmers, and I now look forward to reviewing the rule and working with the USDA and FDA to ensure farmers in Oregon and nationwide can fully realize this crop’s economic job-creating potential,” he said.

That sentiment was echoed by Sen. Steve Daines (R-MT), who said that hemp represents “a great opportunity to create jobs and grow Montana [agriculture].” He thanked Purdue and USDA for their “leadership on this issue.”

Sen. Kevin Cramer (R-ND) said his state has “led the way in research and development of hemp for years” and said that the plant is “a new cash crop which is drought resistant, good for our land, & allows for more diversification.”

“I’m happy to see this program from USDA is developing the industrial hemp rules and regulations,” Rep. James Comer (R-KY) said in a press release. “This is a key step in helping this emerging industry move forward.”

The congressman also mentioned that legalization hemp was one of his campaign promises when running for agriculture commissioner in Kentucky in 2011.

Another congressman from Kentucky, Rep. Andy Barr (R-KY), touted the role hemp has played in the state’s economy and said USDA’s announcement “will provide certainty to farmers and allow the industry to develop even further.”

“I will continue to work in Congress to ensure our hemp farmers have the resources they need to grow their businesses,” he said.

Rep. Chellie Pingree (D-ME) said she’s pushed for months to have USDA “establish federal rules clarifying legal pathways for #hemp growers” because the lack of regulations caused the industry’s success to be “hindered.”

I look forward to working with USDA to ensure this interim final rule works for Maine hemp growers and provides them with eligibility for the full range of USDA programs,” the congresswoman said.

In a statement, Kentucky Agriculture Commissioner Ryan Quarles said his department will immediately act upon USDA’s regulations by conducting “a comprehensive review of our existing hemp program and the U.S. Department of Agriculture’s interim final rule.”

“We will have open dialogue with our growers, processors, and industry stakeholders about what this plan means for our state,” he said. “I would like to thank the U.S. Department of Agriculture, Secretary Sonny Perdue, and Under Secretary Greg Ibach for their swift movement on putting together a rule for discussion, not even a year after the 2018 Farm Bill was signed.”

Florida Agriculture Commissioner Nikki Fried said that the rules were “welcome news” and that the state’s hemp program “remains on track ahead of the 2020 growing season.”

Iowa Agriculture Secretary Mike Naig said that the state will work to submit a plan to USDA and warned people not to grow hemp in the meantime.

“We look forward to reviewing the proposed hemp program rules provided by the USDA. We will use this information to refine Iowa’s draft hemp plan before we submit it to USDA for approval,” he said. “We are working hard to have Iowa’s hemp program implemented in time for the 2020 growing season. In the meantime, we want to caution people that it is not legal to cultivate, grow or distribute hemp in Iowa until the USDA approves our state plans. We also encourage growers to make sure they have quality seed and a buyer identified before they invest in hemp production.”

Oregon’s Department of Agriculture said it is “reviewing the 161-pages and is working to determine what changes if any need to be made to Oregon’s hemp program.”

The Minnesota Department of Agriculture (MDA) similarly said it will move ahead and submit a regulatory plan for hemp to USDA.

“Just like other states, we’re excited about the potential for industrial hemp,” the department said in a tweet. “The MDA is reviewing the interim rule and will work toward submitting our state plan to USDA.”

Grant Smith, deputy director of national affairs at the Drug Policy Alliance, applauded USDA’s acceptance of a narrow interpretation of the ban on hemp industry participation by people with felony drug convictions that advocates had urged.

“We are pleased that, in the final rules, we were able to get the felony conviction ban removed for hemp workers, so that they can at least participate in the industry,” he said in a press release. “Unfortunately, more work still remains to completely eliminate the ban, so those with felony convictions can—not just work in the industry—but also lead it by being able to obtain licenses of their own. It is inconceivable that those that have been the most harmed by prohibition would then be further inflicted by being barred from taking part in the new legal economy.”

Eric Steenstra, president of Vote Hemp, said the group is “excited to see the long awaited USDA hemp regulations announced this morning and feel USDA has done a good job.”

“We will be reviewing the regulations and providing comments as we expect some minor changes will be needed to ensure that the regulations work well for American farmers,” he said.

Shawn Hauser, partner and chair of the hemp and cannabinoids practice group at Vicente Sederberg LLP, said USDA’s issuance of hemp rules “represents a major agricultural, economic, and environmental milestone for our country.”

“After decades of being inappropriately classified as a narcotic, hemp is finally going to start being treated as an agricultural commodity in the U.S.,” she said. “Because it is one of the most versatile and sustainable crops on Earth, hemp holds significant promise not only for farmers, manufacturers, and consumers, but also for our planet. This is an exceptionally important development, and its historical significance truly cannot be overstated.”

“The USDA has established a regulatory framework that will serve as an infrastructure for the U.S. hemp economy.  These interim rules provide long-awaited clarity, not only for farmers, but also for regulators and service providers like banks and insurance companies, who were hesitant to work with hemp-related businesses without federal guidelines. The rules also provide hemp farmers with important safeguards and benefits generally afforded to agricultural program participants, such as protection against state interference of interstate commerce, and eligibility for federal grants and programs.”

“We are thrilled that the Interim Final Rule has been released, and we are both eagerly poring over the details and encouraging all Hemp Supporters to share their feedback with us,” Jonathan Miller, general counsel for the U.S. Hemp Roundtable, said. “Last Friday, our Board of Directors met privately with USDA Undersecretary Greg Ibach, and we were encouraged by his strong support for the hemp program and his interest in receiving industry feedback. We look forward to working with the USDA to develop the strongest possible domestic hemp program in the months ahead.”

The American Farm Bureau Federation said USDA’s rules “will provide clarity to hemp producers on everything from crop insurance, testing methods, and crop destruction protocols.”

Prohibitionist organization Smart Approaches to Marijuana said it had several concerns with the rules, including interstate shipping issues and smokable hemp.

 

USDA Releases Proposed Hemp Regulations For Public Comment

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Kyle Jaeger is Marijuana Moment's Los Angeles-based associate editor. His work has also appeared in High Times, VICE and attn.

Politics

Vermont Governor Happy With Process On Marijuana Sales Legalization Bill Expected On His Desk Next Week

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The governor of Vermont said on Friday that he is impressed with how lawmakers approached negotiations over a marijuana sales legalization bill that will likely be sent to his desk next week, though he stopped short of committing to sign it.

Vermont legalized possession of up to one ounce of cannabis and cultivation of two plants in 2018, but there are currently no regulations in place that allow for retail sales. Both chambers of the legislature previously approved the new commercialization bill, S. 54, and a bicameral conference committee worked to hash out differences in recent weeks. And shortly after they finalized a compromise version, it was sent to the House floor, where it was approved on Thursday.

The Senate is expected to take up the final measure next week. If approved there, the bill will head to the desk of Gov. Phil Scott (R).

The governor was asked during a press briefing whether he felt the legislation contains adequate public safety provisions that he’s requested.

“The bill hasn’t been my top priority. [It’s] obviously a priority for the legislature and legislative leadership,” he said. “And so it’s been passed [by the House]. I will give great credit to those who I don’t believe had any thoughts of me and some of my concerns, but they’ve done so. They’ve moved forward.”

He drew a contrast to a climate change bill that he indicated was not thoughtfully constructed to take his input into account and which he vetoed.

“I reflect on the Global Warming Solutions Act and the difference between the two bills, and them addressing the concerns I had with the regulation of marijuana—regulation and taxation bill—versus the Global Warming Solutions Act. It’s a stark difference,” he said.

Watch the governor discuss the marijuana tax-and-regulate bill, starting around 1:13:05 into the audio below:

Scott said he was encouraged by how the conference committee navigated the marijuana bill and reached compromises.

“They created a panel, and maybe advocated some of their position there, but it’s coming back,” he said, referring to a new cannabis regulatory body that would be created by the legislation. “Any suggestions by the marijuana panel that they put into their bill is going to come back to the legislature, and they’re going to vote on it, and they’re going to consider that. I mean, that’s the way to do things.”

“They’ve come a long ways. I’ll be considering that over the next—when we do receive the bill, we haven’t received it yet. But I’ll consider that,” Scott said. “And again, they’ve come a long ways and we’ll see what happens.”

It’s been an open question whether the governor will ultimately sign off on the tax-and-regulate bill given that he vetoed an early version of a non-commercial marijuana legalization bill. He reluctantly approved a revised version after legislators agreed to include a number of provisions he requested.

An outstanding concern for Scott in this latest bill is how to mitigate the risk of impaired driving. He wants police to be able to conduct roadside saliva tests for THC—despite the shaky science about its efficacy and civil rights concerns. In conference, the panel compromised on allowing saliva testing, but officers would have to get a warrant and the tests couldn’t be conducted at roadside.

“I’ve never been philosophically opposed to a retail market, I just have concerns about that,” the governor told WCAX in a separate new interview. If marijuana sales are legalized, Scott said it will be important to “make sure we’re doing this the right way with our eyes wide open and that we’re protecting the citizens of Vermont.”

Meanwhile, Lt. Gov. David Zuckerman (D), who is running against the incumbent governor, has been a strong advocate for establishing a regulated cannabis market in the state. He told the local news outlet that the “hybrid” compromise on saliva testing “doesn’t cross the line for me,” despite his general reservations about the practice.

Under the proposed cannabis sales bill, marijuana would be subject to a 14 percent excise tax, in addition to the state’s six percent sales tax.

S. 54 also contains some social equity provisions such as prioritizing marijuana business licenses for minorities, women and people disproportionately impacted by the war on drugs. An independent regulatory commission would additionally be tasked with promoting small business participation in the market.

A new Cannabis Control Commission would be responsible for issuing licenses for retailers, growers, manufacturers, wholesalers and labs. The body would also take over regulation of the state’s existing medical cannabis industry from the Department of Public Safety .

A 30 percent THC limit would be imposed on cannabis flower, while oils could contain up to 60 percent THC. Flavored vape cartridges would be banned.

Local jurisdictions would have to proactively opt in to allow marijuana businesses to operate in their area. Municipalities would also be able to establish their own regulations and municipal licensing requirements.

A timeline for the legislation states that it would formally take effect on October 1, 2020—but regulators would then have to make a series of determinations about rules and licensing before retail sales would launch. Dispensary licenses would have to be issued on or before October 1, 2022.

A fiscal analysis on the final bill projects that Vermont will generate between $13.3 million and $24.2 million in annual cannabis tax revenue by Fiscal Year 2025. Licensing fees will lead to additional funds for the state, but the regulatory board created by the legislation will set those levels at a later date. For now, the Joint Fiscal Office estimates the fees could lead to another $650,000 in revenue every year. Municipalities hosting marijuana businesses will also be able to levy additional local fees.

Previously, Scott expressed interest in using new cannabis tax revenues to fund an after-school program he’s pursuing.

Outside of the cannabis sales legalization bill, the House approved separate legislation this month that would provide for automatic expungements of marijuana convictions and allow people to possess and grow more cannabis without the threat of jail time than is currently allowed. The Senate could give approval to the latest version next week, setting it up to also head to Scott’s desk.

Majority Of Republicans Support Marijuana Legalization Bill That Democrats In Congress Delayed Vote On

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Hemp Farmers Now Eligible For USDA Coronavirus Relief Program

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The U.S. Department of Agriculture (USDA) announced on Friday that it is expanding its coronavirus relief program for farmers—and this time around, hemp cultivators are eligible for benefits.

In May, USDA said it would be making $19 billion available for agriculture producers to assist them amid the pandemic. But it excluded hemp and several other crops, stating that they don’t qualify because they didn’t experience a five percent or greater price decline from January to April. Industry stakeholders contested that point, arguing that there’s insufficient data to establish that given how young the newly legal market is. They said they were suffering just like other sectors.

It seems the department got that message and chose to accommodate the industry. A new round of funding through USDA’s Coronavirus Food Assistance Program (CFAP) includes a payment category for “flat-rate crops” that lists hemp as eligible.

“Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre,” USDA said in a notice. “These crops include alfalfa, extra long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others.”

Jonathan Miller, general counsel at the U.S. Hemp Roundtable, told Marijuana Moment that the group is “thrilled” to see USDA take this step, though some stakeholders are saying that the calculation the department is using to determine benefits under the program “might not be as generous as for some other crops.”

“This is a very significant development for the industry,” he said. “We just want to be sure that our farmers are treated fairly just like other farmers.”

The office of Senate Majority Leader Mitch McConnell (R-KY), who has championed the industry and helped advance the crop’s legalization, highlighted the policy change.

The Virginia Department of Agriculture also touted the news.

In April, Congress approved a COVID-19 package that made hemp businesses eligible for federal disaster relief through the Small Business Administration (SBA).

For the past two years since hemp was federally legalized through the 2018 Farm Bill, USDA has been hard at work developing regulations and reaching out to the industry to ensure that the market has the resources to thrive.

This month, for example, it reopened a 30-day public comment period on its proposed rules for the crop in order to gain additional feedback on a number of provisions that stakeholders had expressed concern about. SBA recently asked USDA to extend that comment window. The department’s rule for hemp, when finalized, is set to take effect on October 31, 2021.

In July, two senators representing Oregon sent a letter to 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.

Sen. Cory Gardner (R-CO) called on USDA to delay the implementation of proposed hemp rules, citing concerns about certain restrictive policies the federal agency has put forward in the interim proposal.

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.

As it stands, the earlier pilot program is set to expire on October 31. The senators aren’t alone in requesting an extension, as state agriculture departments and a major hemp industry group made a similar request to both Congress and USDA last month.

Perdue has said on several occasions that DEA influenced certain rules, adding that the narcotics agency wasn’t pleased with the overall legalization of hemp.

As all of this rulemaking continues, USDA has been systematically approving hemp plans from states and tribes. Utah is the latest state to have its proposal approved.

Majority Of Republicans Support Marijuana Legalization Bill That Democrats In Congress Delayed Vote On

Photo courtesy of Brendan Cleak.

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Majority Of Republicans Support Marijuana Legalization Bill That Democrats In Congress Delayed Vote On

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A majority of U.S. voters across party lines support the passage of a comprehensive federal marijuana legalization bill that was expected to receive a House floor vote before being postponed on Thursday, according to a new poll.

The survey found that 59 percent of Americans—including 53 percent of Republicans and 70 percent of Democrats—favor the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which would federally deschedule cannabis and promote social equity.

Despite that bipartisan support, certain moderate Democratic lawmakers convinced House leadership that holding a vote on the bill next week, as was initially expected, could damage them politically heading into the election. They felt that advancing the reform legislation before passing another coronavirus relief bill looked bad for them—a position that advocates say is nonsensical given the widespread popularity of the issue.

This is the second time Data for Progress and the Justice Collaborative Institute asked Americans about drug policy reform and the MORE Act specifically. Their last poll, which was conducted in May, showed that 62 percent of respondents backed the bill. Support also transcended party lines in the earlier survey, with 60 percent of Republicans and 74 percent of Democrats agreeing it should be passed.

“The decision to push back a vote on the MORE Act not only calls Democrats’ prioritization of racial and criminal justice into question, but it also shows a complete disregard for the will of the majority of the American people who are ready for reform,” the Justice Collaborative said in a press release. “Failing to pass legislation decriminalizing marijuana use could be an electoral risk come November.”

While the House won’t take up the MORE Act next week as initially anticipated, leadership has given the bill’s supporters an “ironclad commitment” that it will get a floor vote in the fall, according to Reps. Earl Blumenauer (D-OR) and Barbara Lee (D-CA). That will likely take place after the election.

House Majority Leader Steny Hoyer (D-MD) said that “the MORE Act remains a critical component of House Democrats’ plan for addressing systemic racism and advancing criminal justice reform, and we are committed to bringing it to the Floor for a vote before the end of the year.”

The new poll—which involved interviews with 1,212 likely voters from September 11-14—also looked at support for more broad drug policy issues. For example, 60 percent said that “we should treat drug use as a public health issue and not a criminal justice issue.”

Sixty-seven percent of voters said the federal government should respect the rights of states to set their own marijuana policies. That support was also bipartisan, with 63 percent of Republicans and 73 percent of Democrats agreeing with the sentiment.

A majority of voters said police shouldn’t be arresting people for possessing cannabis for personal use (59 percent) or selling small quantities of marijuana (55 percent).

Finally, the poll asked people whether they feel that “legalized marijuana has become too corporate and it is only benefiting wealthy investors.” Half said they did feel that way, 26 percent said they disagreed and 23 percent said they didn’t know.

Interestingly, Republicans were more likely to say the industry is being corporatized (57 percent) than Democrats (48 percent).

The survey findings underscore the evolving political reality of drug policy reform: it’s popular with most Americans and it’s increasingly bipartisan. But it also reveals the splintering between public sentiment and congressional action, as evidenced in part by the MORE Act vote postponement. That select centrist Democratic members felt the optics of passing the popular bill would derail their reelection campaigns seems to highlight the disconnect.

Congressional Research Service Highlights Four Consequences Of Federal Marijuana Prohibition

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