GOP House Leaders Propose Reducing Regulatory Barriers For Some Hemp Growers In Draft Farm Bill

GOP House leaders have released a draft version of large-scale agriculture legislation that could reduce regulatory barriers for certain hemp farmers and scale-back a ban on industry participation by people with prior drug felony convictions. The legislation also omits any provisions that would ban hemp-derived cannabinoid products that some parties have pushed for.

The House Agriculture Committee unveiled the draft 2024 Farm Bill on Friday—just days before a scheduled markup next week. It would build upon the federal legalization of the crop under the 2018 version of the legislation in several meaningful ways, though hemp stakeholders caution there may be attempts to undermine the industry with amendments.

One of the key changes that’s included in the current draft would revise the definition of hemp, creating separate categories for producers who grow the crop for cannabinoid extraction for human and animal consumption and for “industrial hemp” producers who cultivate it for fiber, grain, oil and seed not intended for consumption.

Under the draft legislation, those who are licensed as “industrial hemp” producers could see reduced regulatory restrictions, with the U.S. Department of Agriculture (USDA), states and Indian tribes empowered to authorize visual inspections and “performance-based sampling methodologies” for compliance purposes.

Farmers growing hemp to extract cannabinoids for human or animal consumption, however, would continue to be subject to more intensive inspections and laboratory testing as prescribed under the 2018 Farm Bill.

The revised inspection and testing provisions were “inspired” by a bipartisan bill titled the “Industrial Hemp Act” that was introduced last year by Reps. Matt Rosendale (R-MT) and Chrissy Houlahan (D-PA), a section-by-section summary says.

Also, the newly released legislation would allow USDA to independently accredit laboratories to conduct the sample testing. That would help resolve bottlenecking issues that’s beleaguered the industry, as the current law requires farmers to have their products tested only by a limited number of Drug Enforcement Administration- (DEA) certified labs.

Another proposed change to federal hemp statute would make it so USDA, states and tribal entities could choose to eliminate a policy that prevents people with felony drug convictions in the past 10 years from being licensed to produce industrial hemp.

However, advocates are hoping to see more expansive language, such as what’s described in Senate Democrats’ recent summary of their forthcoming Farm Bill draft. Under that plan, there would be a mandate to eliminate the ban, rather than simply authorizing it, and it would cover all hemp producers, not just those growing it for non-extraction purposes.

That said, the Senate Agriculture Committee has not yet released the draft text of their bill, so it remains to be seen if the summary description matches what will ultimately be released. Bipartisan House lawmakers filed standalone legislation last year that would broadly lift the felony ban for would-be hemp producers.

While the House bill contains a number of priorities that a coalition of hemp organizations and businesses had put forth, the industry is especially encouraged by what’s not in the draft legislation: a ban on most hemp-derived cannabinoids.

Paradoxically, select marijuana businesses have found themselves on the same side as prohibitionists in pushing such a ban. In a letter to congressional leaders last month, the U.S. Cannabis Council (USCC) proposed specific language they wanted to see included that would place hemp-derived cannabinoids containing any amount of THC under the definition of federally illegal marijuana.

While they’ve focused on the need to address public safety concerns related to unregulated “intoxicating” cannabinoid products such as delta-8 THC, some hemp industry advocates say the effect of the proposed language could be a ban on virtually all non-intoxicating CBD products as well, as most on the market contain at least trace levels of THC, consistent with the Farm Bill definition of hemp that allows for up to 0.3 percent THC by dry weight.

Hemp industry stakeholders have recognized that there’s a need to address legitimate concerns related to the unregulated market that’s proliferated since hemp was federally legalized, but the solution they’ve put forward is to enact strategic regulations to ensure product safety and prevent youth access.

“We are very pleased with this draft,” Jonathan Miller, general counsel for the U.S. Hemp Roundtable, told Marijuana Moment on Friday. “Four of our top priorities that we joined with 33 other organizations on are found in this bill, which is really exciting.”

He added that his organization is particularly pleased to see that there’s “nothing negative” in the draft text that “could potentially ban popular hemp products, as has been rumored.”

“However, there is an amendment process, and we’re going to be vigilant to try to oppose anything that would wreak havoc on that product industry,” Miller said.

First, on the positive side: The newly-released Farm Bill draft includes 4 major priorities of the Roundtable and the coalition of 33 hemp non-profit organizations that joined several months ago to share the industry’s consensus agenda.

— US Hemp Roundtable (@HempRoundtable) May 17, 2024

The House Appropriations Committee draft bill also includes a provision that says businesses that “knowingly” misidentify themselves as “industrial hemp” producers potentially subjected to reduced restrictions “shall be ineligible to participate in the program established under this section for a period of 5 years beginning on the date of the violation.”

Another component of the legislation would prevent state agencies from denying public assistance benefits to people simply because they have a felony drug conviction or because they’ve failed to “satisfy an action required under a Federal, State, or local law relating to a means-tested public assistance program that was required as a result of a felony drug conviction.”

Meanwhile, state marijuana regulators have proposed updating the agriculture legislation with provisions clarifying states’ rights to enact their own regulations for hemp-based intoxicating cannabinoids, citing instances where there’s been litigation asserting that federal law preempts such rulemaking.

“Federal clarification of states’ existing authority is thus essential to allow states to continue to protect public health and integrity in the hemp industry—as the 2018 Farm Bill always intended,” three executives with the Cannabis Regulators Association (CANNRA) said in a recent letter to congressional leaders.

CANNRA had previously recommended to Congress in a letter last year that lawmakers adjust the federal definition of hemp and modify rules around hemp-derived cannabinoids.

Lawmakers and stakeholders have also been eyeing a number of other proposals that could be incorporated into the Farm Bill—and which could come up as proposed amendments as the proposal moves through the legislative process—including measures to free up hemp businesses to legally market products like CBD as dietary supplements or in the food supply.

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Meanwhile, the hemp market started to rebound in 2023 after suffering significant losses the prior year, the latest annual industry report from the U.S. Department of Agriculture (USDA) that was released last month found.

The data is the result of a survey that USDA mailed to thousands of hemp farmers across the U.S. in January. The first version of the department’s hemp report was released in early 2022, setting a “benchmark” to compare to as the industry matures.

Bipartisan lawmakers and industry stakeholders have sharply criticized FDA for declining to enact regulations for hemp-derived CBD, which they say is largely responsible for the economic stagnation.

To that end, FDA Commissioner Robert Califf testified before the House Oversight and Accountability Committee last month, where he faced questions about the agency’s position that it needed additional congressional authorization to regulate the non-intoxicating cannabinoid.

USDA is also reportedly revoking hemp licenses for farmers who are simultaneously growing marijuana under state-approved programs, underscoring yet another policy conflict stemming from the ongoing federal prohibition of some forms of the cannabis plant.

For the time being, the hemp industry continues to face unique regulatory hurdles that stakeholders blame for the crop’s value plummeting in the short years since its legalization. Despite the economic conditions, however, a recent report found that the hemp market in 2022 was larger than all state marijuana markets, and it roughly equaled sales for craft beer nationally.

Meanwhile, internally at USDA, food safety workers are being encouraged to exercise caution and avoid cannabis products, including federally legal CBD, as the agency observes an “uptick” in positive THC tests amid “confusion” as more states enact legalization.

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