On May 28, 2019, the United States Department of Agriculture’s (“USDA”) Office of the General Counsel issued a Legal Opinion, which attempts to address open questions relating to interstate transport of hemp. While the 2018 Farm Bill legalized hemp production, the current state of the law as to whether it is legal to transport hemp through states that do not currently allow the production or sale of hemp is unclear. We recently published an article describing this very issue and analyzing the conflicting case law stemming from the 2018 Farm Bill.
The USDA’s Legal Opinion made the following three pertinent conclusions:
1. As of the enactment of the 2018 Farm Bill, hemp is no longer a schedule 1 drug under schedule I of the Controlled Substances Act. Hemp and is therefore no longer a controlled substance.
2. After USDA publishes regulations implementing the new hemp production provisions of the 2018 Farm Bill, states and Indian tribes may no longer prohibit the interstate transport of hemp lawfully produced under a state or tribal plan or under a license issued under the USDA’s plans.
3. Currently, states and Indian tribes may not prohibit the interstate transport or shipment of hemp lawfully produced under the 2014 Farm Bill.
USDA’s opinion that de-scheduling is self-executing is notable and the agency goes to some length to ensure its position is clear and explain its rationale. The Legal Opinion states, in part:
“It is important to note that this decontrolling of hemp (and THC in hemp) is self-executing. Although the CSA implementing regulations must be updated to reflect the 2018 Farm Bill amendments to the CSA, neither the publication of those updated regulations nor any other action is necessary to execute this removal.”
USDA then goes through the primary objections to this position and explains why they are invalid. The first objection is that rulemaking is required to modify the CSA. To that, USDA responds that rulemaking is not required. Congress has authority to amend the CSA and has done so several times. The second objection is that because the change is not yet reflected in the regulations, 21 C.F.R. § 1308.11, the change is not effective. USDA argues that where Congress amends the schedules to add or remove a controlled substance, that change is effective immediately upon enactment.
Regarding transport specifically, as discussed in our article, there is conflicting case law regarding whether hemp produced pursuant to the 2014 Farm Bill provides an adequate safe harbor allowing the interstate transport of that hemp, notwithstanding any state law prohibiting hemp’s transport or sale. It has been addressed by district courts in California and West Virginia, both of which held that the transport in question was allowed. The issue is before the Ninth Circuit currently and is likely to be decided this Fall.
In the meantime, the USDA’s Legal Opinion provides some much needed clarity as to the agency’s position, allowing the interstate transport of hemp produced pursuant to the 2014 Farm Bill. The Legal Opinion confirms the USDA’s position that while states and Indian tribes will still be able to regulate the production of hemp in their jurisdictions, they are preempted from regulating the interstate transport of hemp produced in accordance with either the 2014 Farm Bill or the 2018 Farm Bill. While courts will not necessarily follow the USDA’s Legal Opinion – and are not beholden to it – it is certainly important dicta that courts should and likely will pay attention to when dealing with the issue of the interstate transport of hemp in the coming months.