How Will the USDA Hemp Rules Affect California?

In mid-October, California Governor Gavin Newsom approved a bill (SB-153) that dramatically changed California’s hemp cultivation laws. The bill was clearly intended to bring California closer into harmony with the 2014 and 2018 Farm Bills, in anticipation for the state’s ultimate submission of a statewide hemp production plan to the U.S. Department of Food and Agriculture (“USDA”) following the USDA’s issuance of interim hemp regulations. Unfortunately for the California legislature, those USDA interim rules (you can read the full text here) were released a few weeks later, and are very, very different from California’s new hemp cultivation regime.

The difference between California law and the USDA interim rule matters because the USDA interim rules require that any state hemp production plan be at least as restrictive as the USDA interim rules. In practice, that means that many of the existing California laws and regulations that are less restrictive than the USDA interim rules will need to be changed when California’s hemp production plan is submitted to the USDA (most likely sometime in early 2020). And there are a few key areas where the USDA interim rules and California law differ , including:

• Testing Times: Under SB-153, required sampling for testing must occur “no more than 30 days before harvest”. The USDA interim rules require that sampling be done within 15 days prior to the anticipated harvest. This 15-day gap is significant because THC levels tend to rise the closer plants get to harvest.
• Total THC Testing: Under SB-153, testing is only required for delta-9 tetrahydrocannabinol.  Under the USDA interim regulations, labs will have to test for “total THC“, which is the molar sum of delta-9 THC and delta-9 tetrahydrocannabinolic acid (“THCA”). This generally increases the THC concentration in hemp sample and pushes it over the 0.3 percent limit, and in effect limits what kinds of hemp breeds that cultivators can use or which harvests can move down the stream of commerce. Not surprisingly, the USDA has faced some pretty heavy backlash. What this means for California is that hemp that may otherwise be legal under SB-153 may no longer be if total THC testing is required.
• DEA Registrations: The USDA interim rules require testing laboratories to register with the DEA. This is not a requirement under current California law and could pose problems for testing labs who want to work in both the cannabis and hemp space.

For the next year or so, while states are compiling and submitting plans to the USDA, the USDA interim rules make clear that hemp may still be produced under the 2014 Farm Bill. The 2014 Farm Bill really only applies to narrow hemp cultivation by state departments of agriculture or institutions of higher education. And it’s arguable that in many cases, California allows much broader hemp cultivation than the 2014 Farm Bill. To date, the California Department of Food and Agriculture (the agency that oversees hemp cultivation in the state) has not commented on the interplay between SB-153 and the 2014 Farm Bill given the new USDA interim rules. It will certainly be interesting to see what the agency’s position is, and how it instructs registered cultivators in the future.

One thing that’s important to note is that the USDA interim rules really only relate to cultivation. While they make a few references to processing, they don’t explicitly require a license or authorize it in every state. Notably, the USDA interim rules allow states to prohibit hemp cultivation, so the fact that they don’t really mention processing should not be viewed as any kind of implication that states are no longer authorized to prohibit hemp processing or the sale of hemp-derived cannabidiol (“Hemp CBD”) products. The FDA has not changed its nearly year-long position that some Hemp CBD products are unlawful, and California legislation aimed at legalizing Hemp CBD as an additive to foods (AB-228) stalled out in a legislative committee earlier this year. So for the time being, nothing has really changed regarding CA laws (or the lack thereof) on processing or the California Department of Public Health’s position on Hemp CBD sales.

As always, stay tuned to the Canna Law Blog for more updates on the interplay between federal laws and regulations and California’s complex hemp rules.