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.
The state treasurer, House majority floor leader and House Judiciary Committee chairman testified in support of the farmers.
By Andrew Graham, WyoFile.com
CHEYENNE—A Laramie County judge threw out drug trafficking charges against hemp advocates and farmers Debra Palm-Egle and Joshua Egle Thursday, finding prosecutors lacked probable cause that the mother-and-son duo intended to grow and distribute marijuana.
At the conclusion of the preliminary hearing, Laramie County Circuit Court Judge Antoinette Williams also dismissed charges against a contractor and his wife, Brock and Shannon Dyke, who worked for the farmers and were on the property when the Wyoming Division of Criminal Investigation raided it in November 2019.
Prosecutors sought to charge all four with conspiracy to manufacture, deliver or possess marijuana; possession with intent to deliver marijuana; possession of marijuana and planting or cultivating marijuana. All but the last are felonies. The judge dismissed all charges, including a misdemeanor marijuana charge, a court clerk said Friday.
Lawyers for the defendant argued, and the judge ultimately ruled, that the farmers had intended to produce hemp, not marijuana. The day of the raid, Brock Dykes showed DCI agents the results of tests conducted on the crop that indicated it contained less than 0.3% THC.
Under Wyoming’s hemp statutes, the crop has to have a THC-concentration limit below 0.3%. Marijuana and hemp are derived from the same plant. Tetrahydrocannabinol, or THC, is the chemical in marijuana that gets users high. Its low presence in hemp keeps the crop from being categorized a drug.
Acting on a tip, DCI ultimately seized 700 pounds of hemp from the Egles’ farm. When agents ran it through a series of their own tests, most test results came back with THC concentrations higher than 0.3%. The highest result was 0.6%.
Laramie County Assistant District Attorney David Singleton, who prosecuted the case, argued that any plant testing over 0.3% is marijuana, not hemp. The judge, however, said it was clear the farmers intended to grow hemp, citing as evidence Dyke’s presentation of earlier test results to DCI and the Egles’ long history as hemp farmers.
Reached by phone Friday, Laramie County District Attorney Leigh Anne Manlove declined to comment on the case.
The dismissal of the case at such an early stage in criminal procedures — during a preliminary hearing — is unusual. Tom Jubin, a lawyer for the Egles, said that during his decades-long career this was only the third of his cases to end at that early stage.
“It’s pretty rare but it’s also pretty rare that a prosecutor would take a case like this and push it,” Jubin told WyoFile after the judge’s verdict.
“Please, have the courage to get these people home,” Jubin asked the judge during his closing remarks. In June, a different judge restricted Deborah Palm-Egle to Laramie County, though her home is in Colorado, her son told WyoFile.
Judge Williams’ own comments before her verdict were brief.
She understood why prosecutors had chosen to bring the case, she said, but did not believe they had probable cause. She also reprimanded the Egles, who had begun growing their hemp crop without a license while state and federal authorities were still developing rules for the newly legalized crop.
The Egles were prominent activists in front of the Legislature who helped push Wyoming’s hemp bill through. House Majority Floor Leader Eric Barlow (R-Gillette), who took the witness stand Thursday, testified that he knew the Egles and understood them to be hemp farmers with no intention of growing marijuana. House Judiciary Committee Chairman Dan Kirkbride (R-Chugwater) and Wyoming State Treasurer Curt Meier submitted statements with similar testimony in support of the Egles.
As such, the Egles “knew the law as well as anyone,” Williams said, and should have been licensed.
Under Wyoming statute, the Egles could face a $750 fine for growing hemp without a license. Such a penalty is a far cry from the decades of prison time they could have gotten if convicted on prosecutors’ charges.
After the judge’s ruling, Shannon Dykes rushed to tearfully embrace Palm-Egle, who is in a wheelchair. “Thank God it’s over,” Palm-Egle said.
Joshua Egle began growing what he described as a test crop of hemp for research purposes before he got his license, he told WyoFile after the hearing. Working in unfamiliar soil, it would take time for farmers to understand how to harvest the plants at the right time to keep THC concentrations legal, he said.
At the time, he was betting officials would soon work out the new industry regulation kinks and allow him to license the crop, he said. In the meantime, “we had to get going,” he said.
The Egles, and other hemp proponents, have pitched the crop as a new outlet for Wyoming’s farmers, and a viable path for economic diversification for a state struggling with its dependence on the energy industry. Egle will continue to pursue hemp farming in Wyoming, he said.
The raid
On Nov. 4, the Dykes were at the Egles’ property in Albin, a farming village in eastern Laramie County near the Nebraska line. The Egles, who live principally in Colorado, were not home. Brock Dykes was taking advantage of fresh snow to burn some waste wood, he told WyoFile in an interview after the judge’s verdict Thursday.
Dykes and his wife were standing outside and saw a line of unmarked cars, and one Wyoming Highway Patrol car, coming toward the property, he said. Their first thought was someone had called in concern about the smoke, he said. His two sons, then 11 and 12 years old, were inside the farmhouse.
Law enforcement officers, who ultimately turned out to be DCI agents, came out of the cars in tactical gear and with rifles pointed at the couple, the Dykes said, yelling at them to “put their fucking hands up.” Brock Dykes saw “five or six officers with a battering ram” approaching the door of the house where his sons were, he said. He yelled that it was unlocked and they didn’t use the ram.
Officers trained guns on the two boys as well, the Dykes said. It was 45 minutes to an hour before Shannon Dykes was able to see her sons, she said.
The investigation had begun when a “reliable source of information” called DCI concerned that the Egles were growing marijuana, according to the charging documents. DCI agents visited the farm several times and spotted what they believed to be marijuana plants drying in an open barn.
DCI agents never contacted the Egles, either before the raid or during the five months between the raid and pressing felony charges, according to the DCI investigator’s testimony during the trial.
“You sought charges against these farmers for crimes that carry decades of prison time without ever talking to them?” Jubin asked DCI Special Agent John Briggs, who led the investigation, during the hearings.
“I did not interview them, no sir,” the investigator answered.
The Dykes were never handcuffed during the raid, they said. Testimony during the preliminary hearing, which took place over two afternoons in July and August, established that Brock Dykes tried to explain the Egles were growing hemp. He showed officers the THC testing results Joshua Egle had sent him, which were on his cellphone.
Briggs was not interested in those results at the time of the raid, Dykes told WyoFile. Briggs told Dykes “I’m not going to argue with you about the technical difference between hemp and marijuana,” Dykes said.
The Dykes’ attorney, Michael Bennett, asked the judge to consider what kind of criminal would “show [testing] proof to agents, as if it were some elaborate ruse to grow the worst marijuana in the entire universe.”
DCI agents confiscated 722 pounds of plants, according to the affidavit. During the court hearings, Briggs testified that then-agency director Steve Woodson, and then assistant-director Forrest Williams drove a vehicle to the farm to collect the crop. Woodson retired in early 2020, and Williams is today the agency’s interim director.
Though relieved at the judge’s action Thursday, the Dykes remain angry at the DCI agents and prosecutors who brought such heavy charges against them. The young couple and small business owners have had to pay for weekly drug tests since early June, and spent considerable money on a lawyer, they said.
“This is all very, very surreal,” Dykes said.
The hemp industry has now progressed in Wyoming, and a number of people around him are growing the crop, he said. “How many more people are growing right now whose neighbor is going to call the police?” he said.
WyoFile is an independent nonprofit news organization focused on Wyoming people, places and policy.
Arizona Marijuana Legalization Initiative Officially Qualifies For November Ballot
Photo courtesy of Pixabay.
The attorney general of New Jersey announced on Tuesday that the state will immediately begin allowing patients to obtain medical marijuana recommendations remotely via telehealth services amid the coronavirus pandemic.
This comes months before voters in the state are set to decide on a referendum to legalize cannabis for adult use.
“Today, we are making it easier for patients to choose telehealth services for any reason, including to avoid an in-person visit due to the continuing risk of COVID-19,” Attorney General Gurbir Grewal (D) said in a press release.
In-person healthcare services are being offered again in NJ, but telehealth remains a vital option. We’re making it easier for patients – including those with chronic pain & those qualifying for medical marijuana – to choose telehealth during #COVID19: https://t.co/VroRidnqIc
— AG Gurbir Grewal (@NewJerseyOAG) August 11, 2020
“New Jersey health care practices are again offering in-person services, but telehealth remains an important option for patients and providers,” he said. “Doctors who use telemedicine to prescribe CDS or authorize medical marijuana will be held to the same professional standards as for in-person visits and must comply with all of the important safeguards we have adopted to prevent diversion and misuse.”
The new administrative order on telehealth also applies to the prescription of controlled substances for chronic pain and it is set to last until the end of New Jersey’s coronavirus state of emergency or the end of a federal telemedicine allowance, whichever comes first.
New Jersey’s Department of Health also took a step to mitigate the spread of the virus in June by allowing medical cannabis dispensaries to deliver products to patients.
Delaware, Louisiana, Washington, D.C. and Jamaica have each made similar moves to free up medical marijuana deliveries amid the pandemic.
Gov. Phil Murphy (D) is supportive of more broadly legalizing marijuana and said last month that the policy change could simultaneously help the state recover economically from the COVID-19 outbreak while also promoting racial justice.
Voters in the state appear ready to make the change too, with nearly seven-in-10 residents voicing support for the referendum in a recent poll.
Separately, the Assembly approved a bill in June to decriminalize possession of up to two ounces of marijuana, though the Senate hasn’t acted on the proposal.
Arizona Marijuana Legalization Initiative Officially Qualifies For November Ballot
Photo courtesy of Brian Shamblen.
Rep. Earl Blumenauer (D-OR), a chief advocate for marijuana reform in Congress, told Marijuana Moment in a new interview that sees the finish line to get a comprehensive legalization bill through the House coming up in the near future.
And in the meantime, he’s secured another victory in the House after his spending bill amendment to protect all state, territory and tribal cannabis programs from federal intervention cleared the chamber in a notably bipartisan vote this month.
While the congressman is focused on advancing federal marijuana policy change, he’s also paying close attention to broader drug policy reform movements that have materialized in his home state of Oregon, where voters will be deciding on historic ballot measures to decriminalize all illicit drug possession and legalize psilocybin mushrooms for therapeutic purposes this November.
Blumenauer is supportive of all these efforts, he said. Congress might be generally preoccupied with coronavirus relief and policing reform legislation, but he’s working behind the scenes to see through his step-by-step blueprint to end federal marijuana prohibition—while maintaining a focus on racial equity for communities targeted by the war on drugs.
In a phone interview, the Cannabis Caucus co-chair discussed his work on marijuana policy, his thoughts on presumptive Democratic presidential nominee Joe Biden’s ongoing opposition to legalization, drug reform beyond cannabis and more.
Marijuana Moment’s Patreon supporters can listen to the audio recording of our conversation with Blumenauer. In addition to the topics covered in this publicly available writeup of the interview, the congressman also talks about reports that the House could vote on a standalone bill to deschedule cannabis next month and how that could procedurally happen.
The exclusive audio clip is available for supporters who help make our cannabis journalism possible with monthly pledges of $10 or more.
The following interview has been lightly edited for length and clarity.
Marijuana Moment: To start things off, I wanted to hear about next steps since the House passage of your amendment to protect state marijuana laws from federal interference.
Earl Blumenauer: We were quite pleased with the vote… The next steps as far as I’m concerned, first and foremost, we’ve been working so that the racial justice package should include legalization of cannabis. The latest year’s statistics were available, over 700,000 people were arrested or cited for something that now more than two-thirds of the American public thinks should be fully legal. That point of intersection has a whole host of negative consequences for black lives. And I’ve been pretty relentless arguing that this needs to be in the justice package. Now, this was the result, as you know, of black leadership and I respect them. I have quietly lobbied that this be included.
I’ve taken it to the caucus, saying, ‘remember this.’ It is probably the single most profound thing we could do to protect black lives. I mean, there are repeated examples of where a point of contact with police for cannabis goes bad with tragic consequences. Even if it doesn’t result in some sort of violent altercation, getting primarily black young men involved with the criminal justice system is not a healthy circumstance, particularly when there’s no reason for it to happen.
We’re arguing that it’s time. We also have, as you know, seen the passage of the MORE Act through the Judiciary Committee. It’s actually ready to come to the floor. And so I’m lobbying to not go through the other subsequent referrals of other committees. But let’s just bite the bullet and pass this. I think this is something that is supported. I know it’s supported by the chair of the Judiciary Committee, and we have areas of support for the legislation from Commerce and Ways and Means, arguing we just cut to the chase and get this passed.
We’ve got the SAFE Banking Act that House leadership was kind enough to make part of our last COVID package and sent to the Senate in the HEROES Act—a relatively small step and it is strongly supported by a number of Republicans in the Senate. This is something that will make a big difference to allow the industry to be able to function normally. It’s of particular interest to the smaller operators—people who are literally the mom and pop, many minority license holders. It’s really tough for them to go through the rigmarole. We’re working, taking care of the banking, supporting our amendment in the appropriations process and arguing that this ought to be included in the package for racial justice.
MM: Have you been talking to any Senate offices about introducing identical language to your protect-states amendment in their chamber’s version of the Justice Department spending bill?
EB: I have not yet, but I’m planning on it.
MM: I think you might agree with me that one of the more surprising vote flips this year compared to last came from Rep. Debbie Wasserman Schultz (D-FL), the former Democratic National Committee chair. We observed you have a fairly animated conversation with the congresswoman on the House floor just prior to her vote—is there anything you can share about the arguments you made that might’ve convinced her to vote favorably?
EB: You know, I don’t feel that it’s useful to talk about conversations with colleagues. This has been an area that Debbie and I have talked about over the years, just in terms of substance, but I don’t really have any comment.
Marijuana Moment asked Blumenauer about our recent report about congressional leaders’ plans to advance a cannabis descheduling bill to the House floor in September.
The congressman’s answers to that question, and the full audio of our interview, are available exclusively for Marijuana Moment supporters pledging at least $10/month on Patreon.
MM: Advocates were disappointed last month when the Democratic National Committee’s platform committee rejected an amendment to add legalization as a 2020 party plank. What’s your reaction to that vote?
EB: I’m not particularly concerned. The way that we’re going to be able to end the failed prohibition of cannabis is with legislation. Party platforms, I’m sorry, I’ve been to a number of national conventions. I’ve never read a platform all the way through. I’ve never seen a platform drive legislative achievement. Occasionally, there are things that are in the platform that are targets for weird ads. But platforms? No, I’m sorry, I’m not going to waste any time and energy on the platform.
The majority of people on that platform committee actually support what we’re trying to do. I think you’re going to see, in the course of the next couple months, it’s going to be clear that the Democratic Party supports ending the failed policy of prohibition. I’m quite confident of that and I’m not worried at all about that hiccup. I spent no time on it and don’t think it’s worth it. I think the things we’re working on in terms of moving legislation for research, for banking, for ending prohibition, those are the things that matter, and we can actually get them enacted this Congress.
MM: There are some who suspect delegates on the panel felt pressured to vote against it because former Vice President Biden remains opposed to the policy change. What message would you send him on the need to embrace legalization, especially given supermajority support among Democrats?
EB: I have had conversations with team Biden, talking about the overwhelming support for ending the failed prohibition of marijuana. I’ve talked about the political support. I’ve talked about the criminal justice implications. And I’ve had some encouraging conversations. I think at the end of the day, I don’t think the vice president is going to be opposed to full legalization.
I think when we get to the point where there’s a Biden administration, which I desperately hope for, I don’t think there’s going to be any interference with what we’re doing on the federal level and the state level. I have absolute confidence in that.
Let me just say, the vice president has a long and detailed policy history on hundreds and thousands of issues, and we’ve watched the vice president really be engaged this last year. I’ve been impressed with his genuine effort to understand issues. I’ve seen overwhelming evidence that he and his team are getting behind looking at a variety of things. I’ve witnessed a degree of flexibility and willingness to take in new information and new circumstances. You’re seeing it on an ongoing basis.
I have no doubt that when all is said and done, the Biden administration and a Biden Department of Justice will be a constructive player.
MM: Senate Majority Leader Mitch McConnell (R-KY) has been criticizing House Speaker Nancy Pelosi (D-CA) over her defense of including cannabis banking language in the chamber’s latest coronavirus relief legislation. What do you make of that?
EB: Well, he can check with some of his own endangered Republicans and ask whether or not it’s “germane.” I mean, cannabis was deemed, in state after state, an essential service. We’re talking about $10 billion or more in terms of economic activity. We’ve already talked about the challenges in terms of the safe banking implications. It is real life medicine for millions of people. And the notion that somehow this is just arts and crafts, this is a tangential issue—this is from the guy who stuffed in to the first COVID relief package completely unrelated, $140 billion tax break for people who made a minimum of a half-million dollars, with no showing of impact from the COVID-19 crisis, and he’s going to talk about germaneness? I think there’s a little bit of chutzpah there.
Being able to help this industry stabilize and thrive, reducing a serious public safety threat by having people conduct transactions with duffel bags full of $20 bills, which is an invitation for money laundering, theft, tax evasion. It’s insane and everybody agrees. I was pleased that our leadership took a bill that passed with overwhelming bipartisan support. It wasn’t just that every Democrat but one voted for it. It was 40 percent of the Republicans. There aren’t very many items that would actually help people that have that measure of support.
Finally, I would just note that there are lots of things that Leader McConnell has said. He didn’t want to give any help to state and local governments. Let the states go bankrupt, I believe was his prescription. I think what you’ve seen is that the Senate understands that Democrats are united and that we have a stronger position in terms of doing things that will make a difference for the economy and the health of citizens. He’s got a pretty weak hand. And I don’t take that talk seriously. I mean, it’s not gonna be easy and he has not been helpful except for his Kentucky hemp growers. So you take your help where you get it.
MM: There are two non-marijuana drug policy reform initiatives that qualified for the ballot in your state of Oregon: drug decriminalization and psilocybin legalization for therapeutic use. What can tell me about any plans you have, if any, to help build support for the measures ahead of November?
EB: I think they both have strong merit. I’m going to be making my position clear. I will probably put a voters pamphlet page in, do a little social media, maybe some advertising. I think that the notion of decriminalizing drug use as distinct from legalizing—but dealing with decriminalization, dealing with psilocybin in terms of the research and therapeutic aspects, I think the more attention people pay, the better off we are. And I think it’s important to allow voters to be heard, and I’m certainly going to share my strong feeling that this is a step forward.
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Photo courtesy of Philip Steffan.
