Politics
USDA Unveils Guidelines For Federal Loans To Hemp Business
The U.S. Department of Agriculture (USDA) recently released guidelines for processing federal loans for the hemp industry.
Since hemp was federally legalized under the 2018 Farm Bill, it is now considered an agricultural commodity like any other crop, and USDA has taken several steps to sync the market with its various programs and services. And the department’s new memo to state and county offices provides clarity on how to process direct or guaranteed loan applications for hemp producers.
The seven-page document, which was released last month, describes the various requirements a hemp business must satisfy in order to access USDA’s lending services. Chief among those requirements is for a prospective borrower to be licensed under a USDA-approved state or tribal hemp program, or under USDA’s basic regulations if the jurisdiction the business operates in has not submitted its own rules.
“While it’s understood that this new commodity will likely produce some servicing challenges because of State and Federal regulations, it should be treated as closely as possible to any other agricultural commodity and serviced in the same manner,” the memo states. “Hemp will be considered like any other borrower produced commodity, if the hemp was produced under a license authorized by the 2014 or 2018 farm bills, and provided the crop is not abandoned or destroyed.”
Borrowers who are not licensed to grow hemp will be considered in non-monetary default and any losses will not be covered.
While the document emphasizes that hemp should generally be treated the same as other crops, it also acknowledges unique requirements and challenges that the market continues to face.
For example, hemp that contains more than 0.3 percent THC must be disposed of under the department’s rules. And, the memo says, USDA’s Farm Service Agency (FSA) “will not pay for these services for direct loans and FSA will not cover a lender’s advance to the borrower to cover the cost as part of any guaranteed loan loss claim.”
Officials should also be cognizant of ongoing problems with banking access for the industry, as some financial institutions still decline to service businesses that produce the crop despite its federal legalization.
“Applicants should ensure the availability of a banking institution authorizing these financial transactions to ensure availability of proceeds to support payment of expenses and debts,” USDA said. “Additionally, producers will be required to assign their sale proceeds to FSA in an amount not to exceed their annual payment.”
For direct and guaranteed loans, hemp businesses must have a contract with FSA laying out termination policies and their ability to repay the loans. Part of that calculus should involve looking at the “intended use of hemp being produced,” whether that’s fiber, seed or CBD oil.
The Farm Bill doesn’t allow for hemp licenses to be transferred, which also has some lending service implications, USDA wrote.
The memo says that “if the borrower defaults on the loan, dies, or abandons the operation, under no circumstance could another legal individual, lender, or FSA Agency official obtain the right to the commodity and attempt to liquidate it as a full or partial income recovery attempt.”
This latest document seems to build off the establishment of loan programs for hemp businesses that was described in a memo released in February. The purpose of that notice, which itself was an update to one published last October, was to provide “updated guidance on the analysis and evaluation of Direct Loan applications and/or requests for guaranteed loans for industrial hemp growers, especially as it relates to contracts.”
USDA announced last year that producers operating under the 2014 Farm Bill could access certain federal loans, but it said regulations had to be developed for those growing hemp under the latest agriculture legislation. In the time since, the department has been systematically approving state and tribal hemp plans on a rolling basis while at the same time pushing to normalize the industry—by providing hemp businesses with access to federal crop insurance, for example.
More recently, the hemp industry scored a victory after Congress passed legislation last month stipulating for the first time that farmers who cultivate the crop are eligible for federal coronavirus relief programs through the Small Business Administration.
Photo courtesy of Pixabay.
A bill to decriminalize marijuana possession in Texas—as well as a separate proposal to reduce penalties for possessing cannabis concentrates—advanced out of a key House committee on Friday.
These are the latest developments that have come after a week where Texas lawmakers have considered a medley of marijuana reform measures. But arguably the most significant piece of cannabis legislation to move out of committee would make possession of up to an ounce of marijuana a class C misdemeanor that carries a fine but no threat of jail time.
The full House of Representatives approved a cannabis decriminalization bill in 2019, but it did not advance in the Senate that session.
This time around, the House Criminal Jurisprudence Committee approved the decriminalization bill, which would also prevent law enforcement from making arrests over low-level possession. Other decriminalization proposals that were under consideration by the panel this week would not prohibit that enforcement action, which is key because police are currently able to incarcerate people who are arrested for class C misdemeanors even though the charge itself does not carry the risk of jail time in sentencing.
The advancing legislation, HB 441, sponsored by Rep. Erin Zwiener (D), would also prevent the loss of a driver’s license or the creation of a criminal record for possession of up to one ounce.
Separately, the committee advanced legislation to make possession of up to two ounces of cannabis concentrates a class B misdemeanor.
Both bills were among the subjects a lengthy hearing the panel held on Tuesday.
“Marijuana bills are moving through the committee process at record speed this session,” Heather Fazio, director of Texans for Responsible Marijuana Policy, told Marijuana Moment. “There’s good reason to be optimistic about the upcoming votes and the House and advocates will be doubling down their efforts to influence senators.”
This action comes one day after the House Public Health Committee unanimously approved a bill to significantly expand the state’s medical marijuana program.
Sponsored by Chairwoman Stephanie Klick (R), the bill would add cancer, chronic pain and post-traumatic stress disorder (for veterans only) as conditions that could qualify people for the state’s limited medical cannabis program.
It would further allow the Department of State Health Services to add more qualifying conditions via administrative rulemaking. And it would also raise the THC cap for medical marijuana products from 0.5 percent to five percent.
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Marijuana Moment is already tracking more than 900 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
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On Thursday, the House Agriculture and Livestock Committee also discussed legislation that would make certain changes to the state’s hemp program, including imposing rules related to the transportation and testing of consumable hemp products.
While the Texas legislature has historically resisted most cannabis reforms, there are signs that this session may be different.
House Speaker Dade Phelan (R) said during a Texas Young Republicans event last month that while he wouldn’t be able to distinguish marijuana from oregano, he said, “I understand the issue.”
The speaker said that he voted for a limited medical cannabis legalization bill during his freshman year in the legislature, and his support for the reform is partly based on the fact that he has a “sister with severe epilepsy, and small amounts of CBD oil makes a big difference in people’s lives.”
Phelan also noted that he was a “joint author—no pun intended” of cannabis decriminalization legislation last session.
“I was able to go back home and explain it, and it wasn’t a big deal,” he said. “To me, it’s a reasonable criminal justice reform issue.”
Texans’ support for legalizing marijuana has grown significantly over the past decade, according to a poll released last month.
Sixty percent of state voters now back making cannabis legal “for any use,” the University of Texas and Texas Tribune survey found. That compares to just 42 percent who said the same back in 2010.
Leaders in both chambers of the legislature have recently indicated that they anticipate more modest proposals to be taken up and potentially approved this session, particularly as it concerns expanding the state’s limited medical cannabis program.
Phelan said he thinks “the House will look at” reform measures this year, including bills to legalize for adult use. He said the lawmakers will likely “review those again, and some will get traction, some will not.” However, the Senate remains an obstacle for comprehensive reform.
Legislators in the state prefiled more than a dozen pieces of cannabis legislation ahead of the new session. That includes bills that would legalize recreational marijuana, allow high-THC cannabis for medical use and decriminalize low-level possession of marijuana.
That said, Lt. Gov. Dan Patrick (R), who presides over the Senate, has killed prior efforts to enact reform in the state, raising questions about the prospects of far-reaching changes advancing in the chamber.
Nevada Lawmakers Approve Marijuana Bill To Allow On-Site Consumption Lounges
A bill to allow on-site marijuana consumption lounges advanced through a Nevada Assembly committee on Friday. The panel separately passed a measure making it so the concentration of THC in a person’s blood cannot be singularly used to determine impairment while driving.
The social use legislation, sponsored by Speaker Pro Tempore Steve Yeager (D), would create two new licensing categories for cannabis businesses in the state. One would be for “retail cannabis consumption lounges” and the other would be an “independent cannabis consumption lounge.”
Existing retailers could apply for the former license and sell products that could be consumed on-site by adults 21 and older. Independent lounges would not be permitted to sell cannabis on their own, but would need to have marijuana products delivered to consumers from another source.
That said, independent licensees could submit a request to regulators to sell cannabis that they produce or to enter into a contract with an adult-use retailer to sell their products.
The state’s Cannabis Compliance Board would also be responsible for creating regulations for on-site facilities and setting fees for license applicants. Businesses that qualify as social equity applicants would have a reduced fee.
Under the legislation, a person “who has been adversely affected by provisions of previous laws which criminalized activity relating to cannabis, including, without limitation, adverse effects on an owner, officer or board member of the applicant or on the geographic area in which the applicant will operate” is considered a social equity applicant.
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Marijuana Moment is already tracking more than 900 cannabis, psychedelics and drug policy bills in state legislatures and Congress this year. Patreon supporters pledging at least $25/month get access to our interactive maps, charts and hearing calendar so they don’t miss any developments.
Learn more about our marijuana bill tracker and become a supporter on Patreon to get access.
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Yeager proposed a large-scale amendment to the proposal before it was approved by the Assembly Judiciary Committee. It builds on the definition and scoring system for social equity applicants, revises public safety requirements for lounges and ensures that products purchased at lounges cannot be removed from the facility, among other changes.
The Las Vegas City Council in 2019 approved an ordinance allowing for social consumption sites within city limits.
That year, Alaska became the first state to enact regulations that provide for the on-site use option at dispensaries. Colorado followed suit with legislation approved that legalized cannabis “tasting rooms” and “marijuana hospitality establishments” where adults could freely use cannabis. Social consumption sites are also provided for in New York’s recently enacted marijuana legalization law.
In Nevada, adding new license types and giving consumers this option—especially in the tourist-centric state—could further boost marijuana and other tax revenues. And Gov. Steve Sisolak (D) has had a particular interest in ensuring that those tax dollars support public education, which he talked about during a State of the State address in January.
Sisolak has also committed to promoting equity and justice in the state’s marijuana law. Last year, for example, he pardoned more than 15,000 people who were convicted for low-level cannabis possession.
That action was made possible under a resolution the governor introduced that was unanimously approved by the state’s Board of Pardons Commissioners.
Under the impaired driving bill that separately cleared the committee on Friday, the per se blood test for THC would no longer be used in determining impairment.
Advocates have argued that the limit is arbitrary and there’s a lack of scientific evidence demonstrating a link between the amount of THC metabolites present in the blood and active impairment.
Photo courtesy of Martin Alonso.
President Joe Biden has received yet another letter from a lawmaker demanding answers about his administration’s practice of firing or otherwise punishing staffers for prior marijuana use.
Rep. Angie Craig (D-MN) noted the national push to end prohibition and how the White House’s actions reveal a troubling disconnect.
“Cannabis is legal for either medical or adult use in 36 states, with numerous states pursuing efforts to further legalize for adult use,” the congresswoman wrote. “In Minnesota, our state legislature is expected to vote on measures to legalize cannabis in the coming months following years of political and community organizing by activists throughout the state.”
Today, I sent a letter to President Biden regarding my concerns with the administration’s policies regarding @WhiteHouse employees who disclose past marijuana use. I urge the Administration to reverse course. pic.twitter.com/P4AgS58Hr5
— Angie Craig (@RepAngieCraig) April 9, 2021
“Minnesotans and the American people are demanding change to our harsh and unequally applied cannabis laws,” she wrote. “I look forward to seeing your Administration reverse course on this harmful and unnecessary hurdle to hiring diverse and talented public servants.”
Craig also mentioned efforts to legalize marijuana at the federal level and commented on Biden’s prior statements on more modest reforms.
“I stand ready to work with you as we revisit our country’s drug laws, including the descheduling of cannabis as a Class 1 drug at the federal level,” she said. “You have previously expressed your commitment to decriminalizing cannabis in acknowledgement that a cannabis conviction or even the stigma of cannabis use can ruin lives and prevent people from voting, gaining employment and contributing to society.”
This is the third letter from lawmakers that Biden has been sent regarding the federal marijuana employment controversy.
A coalition of 30 members of Congress sent a letter last month that sharply criticizes the administration for terminating or punishing multiple White House staffers who disclosed their prior cannabis use. They pointed out that Vice President Kamala Harris and at least one one other Cabinet member are on record about their own marijuana use experiences.
Prior to that, Rep. David Joyce (R-OH) sent a similar message to the president condemning news of the marijuana-related firings for people who were honest about their history with cannabis on a federal form that’s required as part of the background check process.
“Simply put, in a nation where the truth is considered malleable, we need to demonstrate to our young public servants that telling the truth is an honorable trait, not one to be punished,” the congressman wrote. “I respectfully request that your administration discontinue punishment of staff for being honest about their prior cannabis use and reinstate otherwise qualified individuals to their posts.”
White House Press Secretary Jen Psaki addressed the controversy last month, saying during a press briefing that while Biden could theoretically end the policy of firing staff over prior marijuana use himself, that’s not happening as long as cannabis is federally illegal.
She later said that the president’s stance on marijuana legalization “has not changed,” meaning he’s still opposed to the comprehensive reform.
Psaki has previously attempted to minimize the fallout over the cannabis firings, with not much success, and so her office released a statement last month stipulating that nobody was fired for “marijuana usage from years ago,” nor has anyone been terminated “due to casual or infrequent use during the prior 12 months.”
Read the new letter to Biden on White House marijuana employment policy below:Â
Letter to Biden Regarding C… by Marijuana Moment
