$LXRP Why States Are Opting to Retain Their Hemp Pilot Programs in 2020

January 24, 2020

It has emerged that a number of U.S. states are opting to apply the 2014 hemp pilot program law this despite the USDA publishing interim final rules for hemp.

For example, Maine’s state horticulturist, Gary Fish, said that after observing the uncertainty within the USDA rules, they decided that it would be better for their growers if they maintained their pilot program. Fish further noted that after the agency has finalized the interim final rule, then they would create and submit their plan.

Discussed below are the reasons why some states are opting to retain their hemp pilot program in 2020.

• USDA released the interim final rules late

When the USDA published the Interim final rule on October 31, 2019, state officials felt that it was too late to create plans that would meet the federal requirements and implement the USDA rules during the 2020 growing season.

Minnesota’s deputy agriculture commissioner, Whitney Place, said that implementation of the USDA rules during the 2020 growing season would have been a challenge because the state officials are not in agreement with some of the rules.

The officials also found that rewriting their hemp production rules was lengthy and time-consuming; therefore, they opted to operate under the 2014 pilot program while they rewrite their rules. The Arkansas agriculture division manager overseeing the state hemp program, Mike Stage, said that it took them nine months to finalize rewriting the first rule.

• The new testing rules are stringent

The state officials have also expressed their concerns about the strict THC testing rules, especially the 15-day pre-harvest sampling test that must be done by the state or local law enforcement. The tests are to be conducted by laboratories registered by the U.S. Drug Enforcement Administration (DEA), and very few states have DEA-registered labs. For instance, in New Mexico, there are no DEA-registered labs; therefore, they would be forced to have the test done out of state, said Jeff  Witte, the state’s agriculture secretary.

Some of the states are worried about the added number of samples required for testing, which would increase their workload because they have been doing composite sampling.

• Destroying crops

Some states are concerned about the lack of guidelines and funding required in the destruction of crops whose THC level has exceeded the stipulated limit of 0.5%. They wonder if the plants can be destroyed on-site or if they will incur additional cost to dispose of the crop with more than 0.5% THC, said Stage.

Stage further noted that the USDA interim final rules do not allow removal of THC from plants that have been harvested. He hopes that it will get to a time where the USDA will be regulating the products instead of the plant.

The program administrator for the Missouri industrial hemp program, Alan Freeman, said that this year, Missouri is accepting applications for commercial cultivation of hemp. Previously the state was growing hemp for research purposes. So far, it has received more than 100 requests.

According to Whitney Place, the USDA interim final rules are interrupting state programs and yet the states have worked on those programs for years since hemp was legalized under the 2014 Farm Bill. He added that they are trying to operate a program that adheres to the law and boosts the hemp industry.

Place further said that he is hoping that the USDA will take into consideration their feedback when finalizing the rules.

Analysts say it is highly likely that hemp-related companies, such as Dama Financial and Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP), could also be unhappy about those federal rules since what affects the farmers trickles up the entire value chain.

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