industrial hemp

By: Ellen Essman, Thursday, December 27th, 2018

Hemp is one of the most talked-about provisions of the new Farm Bill passed earlier this month by Congress and signed by the President on December 20.   There’s a lot of excitement about the removal of federal restrictions on hemp production and the economic opportunities for growing hemp.  But what exactly does the Farm Bill say about hemp?  Can Ohioans now grow, use and sell hemp and hemp products?  We dove into the 807 pages of the Farm Bill Conference Report (available here for your reading pleasure) to find answers to your questions about the new legal status of hemp and hemp cultivation.

What is hemp?

Before we go much further in this discussion, it’s important to understand that both hemp and marijuana are species of cannabis, but they have different properties.  Of particular note is the fact that marijuana contains much more tetrahydrocannabinol (THC) than hemp.  THC is the part of a cannabis plant that can cause a psychoactive effect in certain concentrations, but hemp plants generally do not contain enough THC to produce a “high.”  Hemp has many uses— it can be used for construction materials, fabrics and clothing, and animal bedding.  It has even been discussed as a potential cover crop.  Cannabidiol, or CBD, is a very popular extract of the hemp plant that is alleged to help those with anxiety, pain, inflammation, and other ailments, but not much research has been done to verify its effectiveness for medical use.  Note that CBD is also an extract of the higher THC marijuana plant.

Hemp is removed from the federal list of controlled substances—but only if it meets certain requirements

First and foremost, the Farm Bill removes hemp from the federal list of controlled substances.  Section 12619 of the bill removes hemp from the definition of marijuana, which is still an illegal drug under federal law.  In the same section, the bill federally decriminalizes tetrahydrocannabinols (THC) in hemp.  Not all hemp, however, is subject to this exemption.  Only hemp and THC as defined in the Farm Bill and as grown under the conditions set forth in the Farm Bill are accorded the exemption.

So, how does the Farm Bill change the definition of hemp?  The main hemp provision of the bill, Section 10113, separates hemp from the definition of marijuana and redefines hemp as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”

Coming soon: state and federal hemp production plans

The new law doesn’t allow a producer to start growing hemp today.  Instead, Section 10113 of the Farm Bill describes the two situations under which a producer will be able to engage in legal hemp production in the future.  In the first situation, the States or Indian tribes may take charge of the regulation of hemp production within their boundaries.  To do this, a State must first submit a plan to the USDA through their state department of agriculture.  A State plan must include: 

  1. A way to keep track of land where hemp is produced within the state;
  2. Methods the state will use to test how much THC is in hemp plants;  
  3. A way to dispose of plants or products that have a higher THC concentration than is legally allowed;
  4. A procedure for inspecting hemp producers;
  5. A plan for enforcing the law;
  6. A system for dissemination of a hemp producer’s information to the USDA; and
  7. Assurances that the state has the resources to carry out the plan. 

A producer who wants to cultivate hemp in a State that has an approved hemp production plan must first comply with the State’s plan before beginning to grow hemp.   Predictions are that it may take a State about a year to create its hemp production plan and obtain the required USDA approval for the plan.

The second situation for growing hemp comes into play if a State or Tribe does not submit a hemp plan to USDA.  In this case, as long as the State has not limited the regulation or production of hemp under state law, the Secretary of Agriculture for the USDA may establish a plan “to monitor and regulate” hemp production within that State.  A plan established by the USDA must meet the same criteria as a plan written by a State, and the law also requires the USDA to establish a licensing procedure for producers.   Thus, a producer in a State that doesn’t have a hemp plan could legally grow hemp by obtaining a USDA hemp license through the hemp regulations that the USDA will develop, unless the State has prohibited hemp cultivation.  Section 10113 specifically states that it does not preempt or limit any state law that “regulates the production of hemp” as well as any state law that is “more stringent” than federal law in regulating hemp production.  Thus, a State can outlaw hemp production within its boundaries or include additional restrictions and requirements in its State plan as long as the plan complies with the federal law requirements.  

Handling producer violations

What if a hemp producer doesn’t comply with the new law or with the State or USDA hemp production plan?  Section 10113 also describes how violations of the law will be handled.  If a hemp producer negligently violates a State or USDA hemp production plan, the producer could be subject to enforcement.  One negligent violation of the plan would not trigger criminal punishment, but the violator would have to comply with a corrective action plan prescribed by the State or USDA.  However, if a producer negligently violates a plan three times in five years, the producer will be banned from producing hemp for five years. Examples of negligent violations in the law include: not providing a legal description of the land where hemp is produced, growing hemp without obtaining a license “or other required authorization” from the State, Tribe, or USDA, or producing hemp with a THC concentration higher than 0.3 percent. If a producer violates a State or USDA plan “with a culpable mental state greater than negligence” (that is, purposely, knowingly, or recklessly), then the State or USDA must report the violation to law enforcement authorities.  Furthermore, persons convicted of a felony relating to a controlled substance under state or federal law are generally barred from hemp production for ten years following the date of their conviction, with the exception of persons convicted of a controlled substances felony but lawfully participating in a pilot program under the 2014 Farm Bill.  Finally, if a person falsifies an application to participate in hemp production, that person will be totally barred from producing hemp. 

Legal hemp not to be prohibited in interstate commerce

The new law also allows for the interstate commerce of legally produced hemp and hemp products. Section 10114 says that a State or Indian Tribe cannot prevent the transportation or shipment of legally produced hemp through its state or territory.  While a State may ban the sale of hemp or hemp products solely within its borders, it must allow hemp products to move freely through the State.  For example, imagine that Pennsylvania allows hemp production but Ohio does not.  Producers of legal hemp in Pennsylvania could not sell the hemp within Ohio, but Ohio could not prohibit a truck, train, or other type of transport from carrying the hemp through Ohio to a destination outside of Ohio. 

Hemp becomes eligible for crop insurance

Importantly, the Farm Bill also addresses hemp production risk by amending the Federal Crop Insurance Act to include hemp.  Section 11119 adds hemp to the definition of “agricultural commodities” that can be insured and section 11106 adds legally produced hemp to the list of crops that can be insured even after harvested.  Other provisions in Title XI waive marketability requirements for researching hemp. 

Making way for hemp research funding

Several provisions in the Farm Bill ensure that it is legally permissible to fund hemp research.  Section 7129 amends the National Agricultural Research, Extension, and Teaching Policy Act to allow the Secretary of Agriculture to award grants for researching hemp and the development of hemp products.  In section 7501, the bill amends the Critical Agricultural Materials Act to allow research on hemp, meaning that Congress believes hemp has the “potential of producing critical materials for strategic and industrial purposes.” 

Finally, section 7605 amends the hemp pilot program language from the 2014 Farm Bill (for information on the pilot program, see our previous blog post).  The Secretary of Agriculture is tasked with conducting a study on the pilot program and submitting a report on the study to Congress within a year.  Section 7605 also repeals the hemp pilot programs, but only one year after final regulation on hemp production under section 10113 is published. 

How does current Ohio law treat hemp production?

Ohio law defines marijuana as “all parts of a plant of the genus cannabis…” in Ohio Revised Code section 3719.01.  Hemp is in the genus cannabis, as discussed earlier in this post.  Therefore, under current Ohio law, hemp is the same as marijuana.  Marijuana is a controlled substance under Ohio law, and the law states that “[n]o person shall knowingly obtain, possess, or use a controlled substance.” 

What about hemp-derived CBD oil?  Ohio enacted a medical marijuana law in 2016, although dispensaries in the state have yet to open (so far, only one dispensary in the state has been licensed).  In order to obtain medical marijuana in Ohio, it would have to be prescribed by a physician with which the patient has a “bona fide physician-client relationship,” and the patient would have to have a qualifying medical condition.  Medical marijuana can be prescribed and used in oil form under the law.  Since Ohio law lumps hemp in with marijuana, this means that in order to obtain CBD oil derived from hemp, a person would also have to follow the steps to obtain medical marijuana. Hemp-derived CBD oil also does not fall under any exceptions in Ohio’s definition of marijuana.  Ohio’s State Board of Pharmacy specifically stated in a guidance document that CBD oil can only be legally dispensed from a licensed dispensary.  In releasing this guidance, the Board of Pharmacy is purporting to act under the rulemaking authority granted under ORC 3796.04.

Note, however, that there are exceptions to Ohio’s definition of marijuana.  According to Ohio law, marijuana “does not include the mature stalks of the plant, fiber produced from the stalks, oils or cake made from the seeds of the plant, or any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted from the mature stalks, fiber, oil or cake, or the sterilized seed of the plant that is incapable of germination.”  Since hemp falls under the definition of marijuana, it is possible that some of these exceptions could also apply to certain hemp products made from stalks or seeds. Thus, it is plausible that some hemp products could be sold and used in Ohio.  The law also states, however, that no person (other than those licensed under the medical marijuana law) “shall knowingly cultivate” marijuana.  Again, since hemp is part of the state’s definition of marijuana, under the law, that means that nobody can “knowingly cultivate” hemp, either. 

In sum, it appears as though some excepted hemp products could be sold in Ohio, but not CBD oil, as it does not fall under the exception.  Even if some hemp products can be sold in Ohio, hemp itself cannot currently be cultivated in Ohio.  The new hemp language in the Farm Bill allows states to be more restrictive with hemp than the federal government, so Ohio can continue its ban on certain hemp products even with the new federal law.  The State cannot, however, stop the transportation of hemp across the State, as explained above.  Conversely, Ohio’s General Assembly could remove hemp from Ohio’s definition of marijuana and redefine hemp according to the Farm Bill’s new definition, which could allow for legal hemp cultivation under the Farm Bill.  For the time being, growing hemp in Ohio is not legal, but that is subject to change. 

Stay tuned to the Ag Law Blog for continuing updates on hemp laws!

 

 

 

 

By: Peggy Kirk Hall, Thursday, January 18th, 2018

Written by Ellen Essman, Sr. Research Assoc., Agricultural & Resource Law Program

We often receive questions about the status of industrial hemp as an agricultural crop in Ohio. Historically, growing industrial hemp has been controversial in the United States because of its close relationship to the marijuana plant—both are members of the same species. Plants used for industrial hemp, however, have a much lower amount of tetrahydrocannabinol (THC) than marijuana and do not have the intoxicating qualities of marijuana plants. Uses for industrial hemp are numerous; ranging from fabrics, to car parts, to bedding for animals. Because of potential usefulness, Congress authorized the growing of industrial hemp in individual states for “purposes of research” in the 2014 Farm Bill.

The 2014 Farm Bill and industrial hemp

The 2014 Farm Bill included a section codified at 7 U.S.C. § 5940 that allows industrial hemp to be grown under certain circumstances. Specifically, industrial hemp can be grown in a state if:

  • It is grown for research purposes;
  • The research is conducted under an agricultural pilot program or other agricultural or academic research; and
  • State law permits the growth of industrial hemp.

The federal law only permits hemp to be grown, cultivated, studied, and marketed under the guidance of institutions of higher education located in the state or the state department of agriculture. Furthermore, the state must certify and register the sites permitted to grow industrial hemp because any substance containing THC is a Schedule I controlled substance under 21 U.S.C. § 812 (c). This means that without a license issued by a state that allows industrial hemp to be grown for research, someone in possession of the plant would be violating federal drug law.

It is also important to note that under the federal law, “industrial hemp” is defined as the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a THC concentration of not more than 0.3 percent on a dry weight basis. Any concentration over that amount is not legal. Even those plants with a THC concentration less than or equal to 0.3 percent are illegal unless the grower has a state license.

State action on industrial hemp research

Since the passage of the 2014 Farm Bill, 26 states have implemented legislation allowing industrial hemp research or pilot programs.  Ohio is not one of these states, but all of the states bordering Ohio have passed laws allowing industrial hemp research. The National Conference of State Legislatures provides a compilation of the state laws here.

Kentucky is an example of a state that is carrying out an industrial hemp pilot program. The program, codified in the Kentucky Revised Statutes §§ 260.850-260.869, allows universities, the state department of agriculture, and those who hold a license from the department of agriculture “to study methods of cultivating, processing, or marketing industrial hemp.” In order to obtain a license, a person must give the Kentucky Department of Agriculture both the legal description and the GPS coordinates of the area where they will grow industrial hemp. Furthermore, applicants for licenses must agree in writing to allow the State to enter the premises for inspection, and receive a yearly background check. Any convicted felon or person with a “drug-related misdemeanor” is barred from becoming licensed.

By implementing this industrial hemp program under state law, Kentucky has stated that it intends to be at the “forefront” of the industry. The state hopes to be in a position to profit from industrial hemp if and when the federal government removes the restrictions on growing and selling industrial hemp.  Information from the Kentucky Department of Agriculture is here and here.

Looking forward

Will the U.S. soon allow hemp to be legally grown as a crop? A bill introduced in the U.S. House of Representatives last July, H.R. 3530, calls for industrial hemp to be removed from the federal definition of marijuana, which would in turn remove it from the list of illegal controlled substances.  A quick search on Congress’ website reveals that similar bills have been introduced many times in the past but have not garnered sufficient support. The possibility that the current proposal will gain enough traction to pass is therefore slim.  But it is possible that continued research could prove the value of industrial hemp as an agricultural crop, which could eventually lead to less regulation in the future. Given Ohio’s lack of legislative interest in allowing industrial hemp research, Ohio farmers may be at a disadvantage if that day arrives.

For more information

Our colleague Harrison Pittman, Director of the National Agricultural Law Center, presented a webinar on industrial hemp and it's recorded here.  A Congressional Research Service report on "Hemp as an Agricultural Commodity" is available here.   A recent article on hemp by Farm and Dairy is available here.  

Posted In: Crop Issues
Tags: industrial hemp, hemp
Comments: 0
Subscribe to RSS - industrial hemp