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USDA Receives Hemp Legalization Feedback From States And Stakeholders

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On Wednesday, the U.S. Department of Agriculture (USDA) gave stakeholders in the nation’s hemp economy an opportunity to provide input on rules to legally regulate the crop that are currently being developed.

Hemp, which was federally legalized as part of the 2018 Farm Bill signed by President Trump in December, had previously been restricted by the Justice Department as a controlled substance. Now USDA has primary responsibility for overseeing legal cultivation of marijuana’s non-psychoactive cannabis cousin.

But the agency is still in the process of establishing a set of regulations covering areas such as land use, certification, product testing and disposal of hemp containing excess THC. After those federal rules are in place, USDA will begin reviewing proposed hemp plans submitted by state agriculture departments.

Officials from at least seven state governments and a number of Indian tribes gave testimony during the roughly three-hour online feedback session, which was occasionally interrupted by technical difficulties, as did several hemp industry operators.

All told, more than 3,000 people tuned in to the webinar to hear three-minute presentations from some 50 scheduled speakers.

The stakeholders registered concerns about testing procedures for hemp, shipping parts of the plant and its derivatives between states, access to banking and hemp’s relation to its still-Schedule-I counterpart, marijuana.

States speak up

After the 2018 Farm Bill was signed into law, Kentucky’s Commissioner of Agriculture Ryan Quarles headed to Washington, D.C. to personally deliver to USDA a plan to regulate hemp, making his state the first to take formal action under the new federal legalization provisions.

“We don’t know if it can replace tobacco,” Quarles said during Wednesday’s event. “But we know it’s becoming part of our greater agriculture portfolio.”

The Kentucky Agriculture Department received more than 1,000 applications to participate this year in the state’s limited industrial hemp research pilot program that is authorized under the prior 2014 Farm Bill.

As Kentucky looks toward broader industrialization, Quarles said the state is particularly concerned about hemp farmers’ access to banking.

“These farmers and companies need access to capital just like any other farmer or agri-business,” he said.

Quarles also called for guidance from the Food and Drug Administration (FDA) and Congress about what the federal government plans to do about CBD and other derivatives of industrial hemp—an area of focus for Kentucky’s hemp program.

“If the FDA regulates too hard against CBD, it would really harm small Kentucky family farms,” he said. “We’ve got to develop rules that allow our farmers an opportunity to continue supporting this crop and benefitting economically from it, especially during a period of depressed farm cash receipts.”

Sara Walling, an administrator at the Wisconsin Department of Agriculture, Trade and Consumer Protection, oversees the department where the state’s hemp program resides. She said the application period for growing hemp in the 2019 season yielded 1,461 grower applications and 711 processor applications under the state’s research program.

She described the Badger State’s relation to hemp as “enthusiastic and energetic” but said there is still some confusion among state regulators about how to proceed.

“We’re optimistic about the future of hemp as an agricultural crop but we’re in a chicken-and-the-egg process: Which comes first, processing or production?” she said.

Regulatory and legislative officials from Colorado, Kansas, Missouri, North Dakota and Pennsylvania also provided testimony.

Tribal officials weigh in

At least six representatives from groups of indigenous people described their visions for a regulated and equitable industrial hemp program. Angie Kennedy, of the Seneca Nation of Indians, sought clarification on how tribes and sovereign nations can participate in the 2019 planting season. The 2018 Farm Bill allows continued planting of hemp under the earlier 2014 legislation’s research provisions.

“But the 2014 Farm Bill, it does not allow that [tribes] can grow under those requirements,” she said. “When the USDA comes out with the regulations, it’ll be too late for this farming season.”

That concern was echoed in other speakers’ remarks as well.

Ben Fenner, an attorney with Fredericks, Peebles & Morgan LLP, spoke on behalf of the tribal attorney for the Flandro Sanchi Sioux Tribe in North Dakota. Fenner said that as more hemp is cultivated, tribes cannot afford to miss out on access the market.

“Delaying this out to 2020 or beyond is going to hurt tribes,” he said.

USDA staff listen to webinar feedback from hemp stakeholders.

Supply chain concerns

Wednesday’s listening session also included testimony from groups that transport hemp and related products, along with vendors that sell the goods.

Federal regulations for interstate transportation of hemp have not yet been issued and, while the federal agriculture legislation covers the whole nation, hemp production and processing is still illegal under the laws of some states.

Collin Mooney is the executive director of the Commercial Vehicle Safety Alliance, which represents the local, provincial, state and territorial agencies responsible for commercial motor vehicle enforcement throughout the U.S., Mexico and Canada.

“States will need to make the necessary regulatory changes and to make officials aware of those changes,” Mooney said.

Aside from changing the legal status of hemp, Mooney said the roadside enforcement community would face other challenges. While industrial hemp is defined federally as cannabis that is comprised of 0.3 percent or less of THC, it can look and smell similar to marijuana, and available field kits only demonstrate whether THC is present in a sample, regardless of the concentration.

“Since the state drug labs that can make this distinction already have a backlog of work, this can lead to unavoidable delays in traffic stops and maybe even mistaken arrests,” Mooney said.

Regardless of the legal challenges of transporting hemp and hemp products, Peter Matz of the Food Marketing Institute, a lobbying group that represents grocery stores and pharmacies around the country, said the demand for these products is “already pretty staggering, and we know that it’s growing.”

“The fact remains that our members are seeking clarity on everything—which kinds of products can be sold and where, as well as the labeling requirements, as well as sourcing and transporting the ingredients,” he said.

Looking ahead

Until USDA’s rules are formalized, hemp farmers are still able to grow under their respective state’s hemp research pilot programs under the 2014 Farm Bill.

Secretary of Agriculture Sonny Perdue said last month that his agency is working to create the new regulatory framework by the 2020 growing season.

“We’re proceeding very judiciously obviously because of the uniqueness of the crop hemp and its relationship to other crops that we’re not encouraging. It’s complex,” he told the House Agriculture Committee.

Dr. Scott Gottlieb, outgoing head of the FDA announced that his agency will hold a similar listening session next month to discuss plans for regulating hemp-derived CBD. FDA is considering pathways to allow cannabis and its derivatives in food and dietary supplements and to permit those products to be marketed and transported between states.

The DEA Wants Help Differentiating Marijuana From Hemp

Photo courtesy of Brendan Cleak.

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Congressman Files New Marijuana Banking Reform Amendment To Large-Scale House Bill

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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.

“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

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Ohio Lawmakers Will Be Forced To Consider Marijuana Legalization As State Validates Activist Signatures

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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.

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.

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Top Federal Drug Official Says Marijuana Use ‘Stable’ Among Youth At Prohibitionist-Hosted Panel Sponsored By D.A.R.E.

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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.

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.

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.

USDA Teams Up With Cornell University For Hemp Education Webinar Series

Photo courtesy of Philip Steffan.

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