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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

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

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Lindsey Graham Challenger Jaime Harrison Backs Legalizing Marijuana

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The Democrat mounting a well-funded bid to oust Senate Judiciary Committee Chairman Lindsey Graham (R-SC) says he supports legalizing marijuana.

“I think we should legalize, regulate and tax marijuana like we do alcohol and tobacco,” Jaime Harrison argued this week. “There is simply no medical reason to lock people up over this issue. In essence, this is about common sense.”

The former South Carolina Democratic Party chairman said that the issue is also a matter of criminal justice reform.

“We know that marijuana arrests, including those for simple possession, account for a large number of drug arrests. The racial disparities in marijuana enforcement—black men and white men smoke marijuana the same rates, but black men are much more likely to be arrested for marijuana possession—is just unacceptable,” he said in an interview with CNBC. “Across the country, we are finding that states are legalizing marijuana and medical marijuana, and it’s just time for South Carolina to lead on this issue.”

Federal campaign finance disclosures filed on Wednesday show that Harrison, who also served as an aide to Rep. Jim Clyburn (D-SC) and a lobbyist with the Podesta Group, outraised Graham for the second quarter in a row.

The state Democratic party, on Harrison’s last day in office as chair in 2017, approved a resolution endorsing a pending medical cannabis bill in the South Carolina legislature.

“Caregivers and patients are searching for treatment options for unmet medical needs, particularly for epilepsy, Alzheimer’s disease, cancers, and the effects of chemotherapy,” the measure said. “The cannabis plant in various forms including oils, creams, drops and liquids has shown some promise in treating these medical conditions.”

A South Carolina Senate committee advanced a medical marijuana bill last year but it never ended up advancing to a floor vote.

In 2018, the state’s Democratic primary voters approved an advisory medical cannabis ballot question by an 82 percent to 18 percent margin.

Graham, for his part, opposes marijuana legalization and hasn’t brought any pending cannabis legislation up for hearings or votes in his panel, which handles criminal justice issues.

That said, he has cosponsored a handful of reform bills in past years. For example, in 2016 he signed onto legislation to protect medical marijuana states from federal interference and reschedule cannabis, and in 2017 he cosponsored a bill to remove CBD from the list of federally banned substances.

He has a mixed record when it comes to votes on cannabis amendments.

In 2015, Graham voted against an Appropriations Committee amendment that would have allowed the U.S. Department of Veterans Affairs to recommend medical cannabis to patients; but the next year he reversed himself and supported a similar measure. Also in 2016, he backed an amendment to prevent the Department of Justice from spending money to interfere with state medical cannabis laws.

Shortly after it was announced he would be taking over the Judiciary panel’s gavel, Sen. Cory Booker (D-NJ) joked that he would be sending marijuana-infused brownies to congratulate Graham, a quip that the incoming chairman seemed to appreciate.

While South Carolina typically isn’t seen as a state where Democrats are likely to pick up a U.S. Senate seat, this year’s contest between Harrison and Graham is attracting attention from national political observers due to the outsized funding haul the challenger has been able to bring in so far.

Illinois Collects $52 Million In Marijuana Tax Revenue In First Six Months Of Legal Sales

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GOP Congressman Withdraws Amendment To Block D.C. Psychedelics Decriminalization

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A GOP congressman filed an amendment to a spending bill on Wednesday, seeking to undermine a local Washington, D.C. ballot initiative to deprioritize enforcement of laws against a broad class of psychedelics.

But while Rep. Andy Harris (R-MD) made the case that his proposed measure represented a reasonable compromise—making it so only psilocybin mushrooms would be low police priorities and only if a doctor recommended them for medical reasons—he ultimately withdrew the amendment rather than force a vote.

“This amendment deals with Initiative 81…which would make the use of hallucinogenic drugs a low priority for enforcement in the District of Columbia,” Harris said in his opening remarks before the House Appropriations Committee.

The congressman added that he’s particularly concerned about the scope of the ballot measure, acknowledging that “there is limited data that psilocybin may be useful in some circumstances” but asserting that the same can’t be said of the other entheogenic substances such as mescaline that would be covered under the activist-driven initiative.

Watch the debate over Harris’s D.C. psychedelics amendment below: 

It should be noted that while activists behind the initiative submitted their signatures last week and believe they have more than enough to qualify for the November ballot in the nation’s capital, the Board of Elections has yet to certify them. Harris acknowledged that but said “I suspect it might be [qualified for the ballot] by the time” the spending bill goes to a bicameral House and Senate conference committee that will finalize the Fiscal Year 2021 Financial Services and General Government bill for delivery to the president’s desk later this year.

It’s not clear if he was signaling that he planned to reintroduce his amendment, which also stipulates that driving under the influence of psychedelics would be prosecutable, on the House floor or if he plans to work to get a senator to tack it onto that chamber’s version of the legislation, which deals with funding for D.C.

“I think the District of Columbia is different from other cities because we have people coming in from all over the country—and we certainly, I would hope, don’t want to be known as the drug capital of the world,” he said.

There was some debate on the measure by the panel. House Appropriations Financial Services and General Government Subcommittee Chairman Mike Quigley (D-IL) and Rep. Betty McCollum (D-MN) voiced opposition while the subcommittee ranking member, Rep. Tom Graves (R-GA), and Rep. Robert Aderholt (R-AL) spoke in favor of the proposal.

“If the district residents want to make mushrooms a lower priority and focus limited law enforcement resources on other issues, that is their prerogative,” Quigley said. “Congress has allowed jurisdictions in California and Colorado to exercise their sovereign right to set policy on mushrooms, the District of Columbia too should be allowed to use their local funds to support their local needs and their priorities.”

Graves argued that “we all can agree that policies that increase the availability of psychedelic drugs in our nation’s capital, that’s dangerous.”

“As the nation’s capital, the District of Columbia, it should be a place where Americans come to see their government at work, for history, maybe go to a Braves-Nats game—it shouldn’t be a destination for illegal drugs,” he said.

McCollum said the amendment serves as another example of Congress attempting to impose excess regulations on D.C. and argued in favor of statehood for the district.

“Now we’re not even allowing the District of Columbia to move forward and decide whether or not this is a good idea,” she said. “I oppose the amendment.”

Rep. Eleanor Holmes Norton (D-DC) celebrated the amendment’s withdrawal with a taunt on Twitter, saying, “Regular #homerule offender @RepAndyHarrisMD tried to bar DC from using its own funds to enact a proposed ballot initiative on entheogenic plants + fungi or any similar law, but then withdrew it before the committee could defeat it.”

That prompted Harris to reply that the “process of educating Congress about how dangerous this initiative is has begun. DC has enough of a drug abuse problem without becoming the drug capital of the country.”

Harris’s office didn’t respond to Marijuana Moment’s request for comment about whether he withdrew the amendment because he sensed he didn’t have the votes to pass it in committee.

In his closing remarks at the markup, the congressman said that his measure “is more than just mushrooms. That’s my whole point.”

“Mushrooms is psilocybin—that has a medical use. This includes mescaline, peyote, three other substances [that] have no medical use at all,” he said.

Melissa Lavasani, who proposed the D.C. ballot measure and is part of the Decriminalize Nature D.C. group working to pass it, said in a press release that “our campaign is about helping D.C. residents by enacting common sense reforms to police priorities that ensure that those using healing plant and fungi medicines are not law enforcement targets.”

This isn’t Harris’s first go at pushing for legislation that leverages Congress’s control over the D.C. budget to interfere in local drug policy issues.

Harris has been a consistent opponent of cannabis reform, repeatedly backing a long-standing congressional rider that bars D.C. from using its tax dollars to implement a legal marijuana marketplace. Last year, however, it was not included in the annual spending bill as introduced by House Democratic leaders and the congressmen didn’t attempt to introduce an amendment to reinsert it. It was included in the Senate version and was included in the final enacted bill following conference committee negotiations, however.

The Drug Policy Alliance sent a letter to committee leadership in advance of Wednesday’s hearing, urging them to oppose any attempts to interfere in D.C.’s ability to vote on the psychedelics reform initiative.

Colorado Marijuana Regulators Propose ‘Franchise’ Business Model For Equity Applicants

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Colorado Marijuana Regulators Propose ‘Franchise’ Business Model For Equity Applicants

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Colorado marijuana regulators are looking for feedback on a proposal to create a franchise cannabis business model to promote equitable participation in the industry by people from communities harmed by the war on drugs.

When legislators initially approved a bill to create an accelerator program for marijuana businesses, it was only designed to give eligible entrepreneurs an opportunity to share a cannabis facility with an existing company. But following stakeholder meetings, regulators laid out a proposal to let those entrepreneurs functionally serve as franchises of current larger marijuana businesses, operating out of separate facilities but sharing branding, advertising and intellectual property under certain conditions.

“The Division contemplates certain components of this alternative ‘separate premises’ model will be similar to a franchisor-franchisee business relationship,” the state’s Marijuana Enforcement Division said in a notice last month.

In order to participate under the new model, the division said it would require a series of disclosures, including initial investments from both parties, terms of any financial arrangements and obligations for the licensee such as non-compete requirements.

Additional requirements could still be developed. For example, the department is considering whether franchisees should be offered reduced or waived rent to use facilities owned by existing businesses that agree to be “endorsement holders.” Regulators are also contemplating limitations for the amount of money a franchise can charge an accelerator licensee as a fee for use of their facilities, as well as liability rules.

“Available incentives for accelerator-endorsed licensees to support the ‘separate premises’ model may also include fee reductions resulting from increased financial assistance and no-cost rent arrangements, and reduced accelerator-endorsed licensee liability,” the division said.

Beyond potentially collecting fees from licensees, the benefit of becoming an endorsement holder under this separate premises model seems to be that they get to indirectly expand their business and exposure while supporting entrepreneurs who might not have the immediate resources to break into the industry.

That said, some advocates are weary of the proposed based on past experience.

“While accelerator programs sound good on paper, they so often create terrible long term power dynamics for smaller businesses that we can not endorse this approach,” Jason Ortiz, president of the Minority Cannabis Business Association, told Marijuana Moment.

“Any relationship that puts a small business owner at the whim of a larger conglomerate makes us concerned that the power dynamic there does not favor the smaller business, who will now have their operation tied to the success of the larger entity,” he said. “We instead encourage any business to invest in grant based programs that allow for smaller businesses to operate on their own premises and to run their business how they see fit.”

At the same time, Morgan Fox, media relations director for the National Cannabis Industry Association, told Marijuana Moment that the proposal “looks like it could create a lot of opportunities for people to get into the industry without having large amounts of capital and could generally lower the barriers of entry significantly.”

“Judging from the comments in the feedback solicitation, it appears that the possibility of predatory or unfair franchise relationships is at the front of the Marijuana Enforcement Division’s priorities and it intends to make it very difficult for endorsement licensees to exploit accelerator licensees,” he said. “However, we’ve learned from the shortcomings and abuses in other equity programs around the country that it is important to continually monitor and assess these programs to ensure their effectiveness.”

Stakeholders can fill out an online form to submit input on the proposal. A hearing to finalize the rulemaking is tentatively set for July 30.

At the same time, the division is also working on the implementation of a bill that defines who qualifies as a social equity cannabis business applicant for the accelerator program. Gov. Jared Polis (D) signed that legislation, which also gives him authority to streamline pardons for prior marijuana convictions, last month.

The division is scheduled to hold a separate hearing on implementing the new bill on July 28.

Illinois Collects $52 Million In Marijuana Tax Revenue In First Six Months Of Legal Sales

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