Key Takeaways from the U.S. Senate Agriculture Committee Hearing on Hemp Production and the 2018 Farm Bill

By Shawn Hauser, Partner; Michelle Bodian, Senior Associate Attorney; Caitlin Wightman, Law Clerk

Aug 23, 2019

Cultivators, food manufacturers, retailers and state regulators eager for federal guidance on hemp got some answers after the U.S. Senate Agriculture Committee’s historic hearing on Thursday, July 25, 2019, where they discussed hemp production and related issues ahead of the release of federal rules governing hemp production.

Industry stakeholders and representatives from various federal agencies served as witnesses at the hearing, answering questions from the committee and offering their comments regarding federal rulemaking, pesticides, FDA regulation of CBD products, testing, and Tribal participation in hemp production. While the federal agencies did not provide much insight into the timing of any proposed rules, previous statements from the USDA indicated that rules for hemp production may be expected this fall. Read on for highlights from the key testimonies.

Rulemaking Process Outline and Update

Witness: Greg Ibach, Under Secretary for Marketing and Regulatory Programs, USDA

Mr. Ibach outlined the USDA’s rulemaking process and stated that the final rules for hemp production will:

  • Allow for USDA to approve state plans
  • Establish a federal hemp plan
  • Create a process to maintain information on land where hemp is planted
  • Provide guidelines and requirements for testing THC level
  • Provide guidelines for disposal of non-compliant plants
  • Provide licensing requirements to maintain compliance

Mr. Ibach also disclosed that the USDA final rules are currently undergoing interagency review, and once the rules are published, the USDA will work to quickly establish the program. He assured the committee that the program is farmer-friendly and that the USDA is collaborating with other federal agencies to establish the hemp program. Mr. Ibach also commented on the lack of hemp research to date but acknowledged that the USDA is beginning to take steps to start hemp research, which the agency hopes to expand once the program is in effect.

Clarify on Testing, Crop Insurance and Ensuring Protections for Farmers

Witness: Stephen Alexander Vaden, General Counsel, USDA

Mr. Vaden did not present a formal statement but did answer questions from the committee. When asked about the potential for analytical variances in THC testing, he discussed the USDA’s use of data from states that have been cultivating hemp under the 2014 Farm Bill and plans to establish a farmer-friendly testing protocol that does not punish farmers who are doing their best to comply with the 0.3% THC limit. Mr. Vaden also explained that a whole-farm revenue crop insurance policy will be available for hemp in 2020. The USDA will require that hemp farmers have a contract with a processor to participate in the crop insurance program due to limited price data availability.

FDA Process to Review Data to Make a Science-Based Decision Regarding Cannabinoids in Human and Animal Food and Supplements

Witness: Dr. Amy P. Abernethy, Principal Deputy Commissioner of Food and Drugs, Office of the Commissioner, FDA

In her testimony, Dr. Abernethy discussed the FDA’s efforts to address the regulation of CBD products in food and products marketed as dietary supplements. She explained that the FDA approved CBD-based drug Epidiolex, and therefore, CBD can only be added to food or marketed as a dietary supplement if the FDA makes an exception through rulemaking. Because the FDA has not yet exercised this exception, FDA takes the position that CBD is not currently permitted as an ingredient in foods or dietary supplements. Dr. Abernethy further explained that the agency established a working group and is looking through all the available data to make a science-based decision. She encouraged anyone with data regarding CBD safety to submit it to the agency.

Dr. Abernethy mentioned that the FDA is currently reviewing the 4,000+ comments received during the FDA’s recent public hearing and call for public comment on the topic of cannabis and cannabis-derived compound regulation. She also discussed the need for data regarding the use of hemp in animal feed, as many of the comments the FDA received have been about animals. Dr. Abernethy did not provide any timeline by which the FDA will complete its review of the data.

Pesticides Update

Witness: Alexandra Dapolito Dunn, Assistant Administrator, Office of Chemical Safety and Pollution Prevention, EPA

Ms. Dunn discussed the need for pesticides for use on hemp and the EPA’s role in approving pesticides. She explained the EPA’s efforts to approve new pesticides in a timely fashion and stated that since May 2019, the EPA has received several requests to label existing pesticides for use on hemp. The pending requests involve biological and microbial chemicals, and Ms. Dunn explained that these chemicals tend to have a low environmental impact so the approval process can be completed more quickly.

Practical Farming Considerations and Key Issues

Witness: Bryan Furnish, Hemp Farmer

During his formal statement, Mr. Furnish shared how he converted his Kentucky tobacco farm into a hemp farm. He also explained the different types of hemp crop (seed, fiber, and CBD) and the different farming practices associated with each type. He discussed some of the challenges of hemp production, including the need for approved herbicides and fungicides, the complications associated with the uncertainty surrounding FDA regulation of CBD products, and the need for reliable, certified seed. When asked how hemp farming best practices can be determined, Mr. Furnish encouraged agencies to visit a working hemp farm and contact the Kentucky Department of Agriculture for data on production, profitability, and destruction of crops due to weeds. In response to a question asking how farmers can ensure their crop is below the 0.3% THC threshold, Mr. Furnish explained the importance of finding a reputable seed source.

Uniformity in Testing and Other Key Industry Issues

Witness: Erica Stark, Executive Director of The National Hemp Association

In her testimony, Ms. Stark discussed THC testing and the need for uniform testing protocols, emphasizing the fundamental need for federal uniformity. She explained that the only way to eliminate the state-to-state legal uncertainties is to establish uniform testing protocols, as well as standards for calibration and control samples. With respect to pesticides and herbicides, Ms. Stark explained that the National Hemp Association is supportive of organic practices; however, at full commercial scale, particularly for fiber, pesticides will be an important issue. She also explained that more research is needed in this area because hemp crops tend to absorb pesticides. Ms. Stark confirmed that CBD currently has the largest market demand and best profit margins and that although there will be a fiber market, the infrastructure to support that market is not yet in place.

Important Considerations for Indian Tribes

Witness: Daryll Seki, Tribal Chairman, Red Lake Band of Chippewa Indians

Mr. Seki spoke from the perspective of Tribal authorities, emphasizing the economic impact and job opportunities that hemp could bring. He explained that common roadblocks for Tribes to participate in hemp farming include the large startup costs for testing equipment and other components of hemp production, for which Mr. Seki requested that the USDA consult with Tribal governments to develop a model Tribal plan. He explained that a model Tribal plan will help Tribes get involved in hemp production despite being left out of production under the 2014 Farm Bill.

Key Takeaways

While no major revelations regarding the federal agencies’ progress on regulating hemp production and CBD were revealed at the committee hearing, the presentations and questions from committee members highlighted the major topics of discussion and federal lawmakers’ understanding of important issues. Federal agencies are clearly working to have informed discussions to ensure hemp is regulated like an agricultural crop and not a controlled substance, while acknowledging challenges and areas where more information is needed.

The primary areas of federal focus are clear:

  • Expand hemp research
  • Create and implement federal testing protocols and standards
  • Clear FDA regulation over CBD and other cannabinoids
  • Need for hemp crop insurance
  • Need for hemp-specific pesticides and herbicides
  • Ensure hemp farmers do not continue to face undue barriers

With the industry eager to truly come out of prohibition and have an operable 2020 growing season, time is certainly of the essence. The USDA’s final rules regarding hemp production will likely be published sometime in Fall 2019 and should shed some light on the federal government’s approach to many of the topics discussed. However, the FDA’s timeline for any final rules or guidance on cannabinoids in human and animal products is certainly not imminent, and its ultimate regulatory structure is anything but certain. This undoubtedly creates uncertainty and risk for the industry. Vicente Sederberg will continue to monitor and provide updates on these important issues and the development of rules.