USDA Threatens To Revoke Hemp Licenses For Farmers Who Also Grow Marijuana Under State Programs

The U.S. Department of Agriculture (USDA) is 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.

After hemp was federally legalized under the 2018 Farm Bill, states quickly got to work developing rules to allow farmers to enter the market, while others opted for USDA’s generic plan. Farmers in states operating under that latter category say they’ve faced threats to abandon any plans to cultivate both hemp and marijuana.

It’s not clear how many farmers have been contacted by USDA regarding the issue, but Vermont-based farmer Sam Bellavance told Seven Days that, months after he began growing marijuana under his state’s program, he received an email from a USDA official that said “regulations don’t allow for a hemp-licensee to also be producing marijuana, even if licensed to do so by a state program.”

James Pepper, chair of the Vermont Cannabis Control Board (CCB), said that it’s not just hemp farmers who are confused by the policy.

“I think there’s confusion at the USDA about if this is possible or not,” he said.

USDA recognized that the state-federal marijuana policy conflict has created a “complex” regulatory environment. But a spokesperson told Marijuana Moment on Monday that the federal rules banning marijuana cultivation are “very clear.”

“Since the Farm Bill was passed in 2018, and since our regulations were promulgated, state and tribal laws pertaining to both hemp production and marijuana production and possession have evolved rapidly,” they said. “This creates a complex jurisdictional and regulatory landscape that is unique to these emerging industries.”

“USDA recognizes that this is a rapidly evolving area of dual state and federal regulation, and we will continue to monitor our policies to keep pace,” the spokesperson added. “Additionally, we will continue working to educate farmers on the current laws and regulations so they can make the best choices for their operations.”

Vermont is one of eight states that operate under USDA’s hemp regulatory plan—the majority of which have also established medical or recreational marijuana programs. Farmers in those states seem uniquely at risk of losing their hemp licenses if they grow both crops.

A USDA spokesperson seemed to push back on that idea, however, telling Politico that the agency regulates “all states and growers in the [hemp] program in the same way.”

“While the 2018 Farm Bill legalized hemp production, marijuana remains a Schedule I controlled substance under federal law,” he told the outlet. “This presents a unique jurisdictional and regulatory landscape that producers of more traditional agricultural commodities do not have to navigate.”

It’s not clear how the issue is being administratively managed. Chris Beerman, a farmer based in Missouri, told Politico that he received a phone call from a USDA official warning him about the risk of losing his hemp license if he tried to enter the state’s nascent marijuana program.

In Mississippi, farmer Eric Sorenson said he was notified by USDA that he’d be losing his hemp license shortly after he became approved to grow medical marijuana under the state law.

“While Medical Cannabis is not federally legal, we will not be able to allow you to maintain your current hemp license in addition to the medical cannabis cultivator license,” an agency representative told him, according to Politico.

Jonathan Miller, general counsel to the U.S. Hemp Roundtable, told Marijuana Moment that the situation is “not only very unfortunate, but it’s also counterintuitive.”

“The expertise gained by growing one plant is very transferable to the other—they basically are the same species—and having a black-and-white bar like this is bad public policy,” he said. “I would hope that USDA would revisit this, and if they believe their hands are tied by statute, then is something we should fix in the Farm Bill.”

Lawmakers and industry stakeholders have been considering a number of potential changes to the next iteration of the large-scale agriculture legislation to better serve hemp farmers. That includes proposals to free up hemp businesses to legally market products like CBD as dietary supplements or in the food supply and to remove restrictions on participation in the industry by people with certain prior drug convictions.

If hemp farmers are getting pressured out of state marijuana markets because of USDA’s interpretation of its statutory obligations, that could be another area to address as lawmakers draft the next version of the bill. Congress was expected to tackle the updated legislation this year, but the current version has been extended by a year under a stopgap spend bill that President Joe Biden signed earlier this month.

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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Photo courtesy of Brendan Cleak.