USDA Secretary Sonny Perdue testified yesterday at a subcommittee hearing of the Senate Appropriations Committee.  USDA’s 2021 budget request was the reason for the hearing, but there was also key discussion around the agency’s hemp rules.   Excerpted highlights include the following:

Sen. Merkley (D-OR). Hemp has many issues on how we adjust to the testing. We forwarded a series of recommendations from Oregon Commerce, similar to Kentucky Commerce – regarding flexibility on how many days out from harvest you test, what part of the stem you test. A lot comes down to whether you go over the 0.3 standard or don’t… A lot of concern that the rules are designed to make it very hard to farm hemp. I don’t think that’s the intent, but we need to work with your team to get a little more flexibility; because clearly, if it’s 0.3 or 0.4, it’s still clearly hemp and not cannabis, not recreational cannabis.

Sec. Perdue. Certainly true. While we fought for a little more flexibility of widening those standards, I believe statutorily the law was constraining in that 0.3. In the regulations, we also had some pushback from DEA that clearly didn’t like the whole program to begin with, and from a lab testing and others. We made a few modifications as we were able to under the legal statutes in our interim final rule. This is a new and unusual crop as you understand. And we’ll be very open to ongoing comments as we go forward about what those other flexibilities – and make sure we make it as available as possible for people who want to grow hemp in that regard. Our hands were constrained many times by the interagency process.

Sen. Merkley. It isn’t so much the statutory concern on the 0.3 as it is the rules of exactly how you test…

Sec. Perdue. Certainly.

Sen. Merkley. We’ll work with you. It’s very clear this is hemp and not marijuana. We need to make that clear to the DEA community.

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Sen. Merkley.  Under the interim production rule, USDA has said it will delay enforcement over the disposal portion of the rule and a requirement of using DEA labs. USDA is going through a 2 year process of evaluating information under the interim rule to develop a final plan. Is appropriate to refer to this interim rule as a draft plan given the evolving changes?

Perdue.  I would think you would. The problem is, under an interim final rule, as our lawyers have explained to me, once it’s set … unless there are minor changes, you can’t change it until you go to NPRM. I would functionally say it is a draft plan. This is a very unique crop. We were learning as we were going. We tried to nail it as best we could. We had some pushback in other agencies. But I think your characterization as a draft is a good one.

Merkley.  Question about states under 2014 hemp pilots. Language was that they could be under the pilot until one year after secretary establishes a plan. Your interpretation as a draft or final plan affects the 2021 growing season. 2020 growing season, everyone agrees, can be under 2014 pilot. Very helpful to KY, OR, ND, CO, VT, etc. – about 10 states – hoping to operating in the 2021 growing season under the 2014 rule, so we can work out these issues I was raising. The 15 days, the how much exactly, what part of the plant you test, whether you count a molecule that is being counted as THC that isn’t quite THC – a series of things that could turn 0.3 to 0.4 and have people destroying very valuable crops that are clearly hemp. Wanted to see if we could work with you to get those states an additional growing season as we work out the details around this.

Sec. Perdue. My preference would be to resolve the issues from our federal rule by that 2021 growing season, certainly for the Oregons and Kentuckys that have had experience, if we could. If we cannot, I would be absolutely as flexible as the law allows in order to perpetuate 2021 under the state rules of 2014 in that area. If we can’t resolve the main issues that the states with those 2014 laws resolved.

Sen. Merkley. That would be very helpful, thank you. Vast amount of production happening in a few states. So crazy right now because it is very expensive to plant a crop. Not knowing how it will be nailed down, so a lot of uncertainty about whether people should invest.

Sec. Perdue. We’ve asked Undersecretary Ibach and market regulatory program to continue to look at things we feel like we can do under the guise of the interim final rule to match up with where the states were in their ’14 rules in order to reconcile any differences and resolve those. Our goal was to have all the states under the federal umbrella, but we understood why some states chose not to.

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