Oregon Hemp: The Permanent Rules Are Now In Effect

While Oregon legalized hemp production in 2015, the Beaver State has seen a huge influx of hemp grower and handler registrations since the enactment of the 2018 Farm Bill, which legalized hemp under federal law.

To keep up with the growing interest in the crop and its derivatives, the Oregon Department of Agriculture (“ODA”) has been actively revising its rules and finally adopted their permanent version on May 15^th.

Specifically, the rules make permanent the temporary rules that were filed around March 1 and the proposed rules that were filed at the end of March. They should be in place for a while, or at least until the state legislature adopts HB 2740 or yet another hemp statute.

Many of our hemp clients have been asking how these rules would impact their businesses. Because it’s been a while since we ran through program basics, we thought it might be helpful to summarize them here on the blog.

Overall, the permanent rules do the following:

• Update the testing rules to conform to the changes made by the Oregon Health Authority in December 2018. The rules impose specific testing requirements based on the type of products involved, which include:
  (1) industrial hemp for human consumption and hemp items;
  (2) industrial hemp for human consumption and usable hemp;
  (3) hemp concentrate or extract intended for use by a person to make a hemp cannabinoid product;
  (4) finished hemp concentrate or extract; and
  (5) finished hemp cannabinoid products.

• Clarify and update recordkeeping and reporting requirements imposed on registrants. The proposed rules put a few additional reporting and recordkeeping requirements on the registrants’ shoulders, but nothing too demanding.
• Clarify the option registered growers have to resample in the event a harvest lot fails pre-harvest testing. Under the new rules, both samples and filed duplicate samples must be reanalyzed if they fail testing.
• Establish a fee for the submission of a change form. Under the new rules, registrants who wish to update their registration, such as adding a grow site to an existing registration, will be charged a $125 fee.
• Adopt a fee schedule for pre-harvest THC testing provided by the ODA. The new hemp sampling fees would be increased by approximately 33 percent to cover the ODA’s cost associated with collecting regulatory samples. The proposed rules include additional fees, including travel time and overtime charges for services performed by the Department of Administrative Services.
• Clarify requirements for individuals making retail sale of industrial hemp in the state. Those who sell industrial hemp items to consumers will no longer be required to test the item for potency before sale so long as the hemp ingredient used in the product has a compliance test at or below 0.3 percent total THC (THCA converted to delta9 and delta9 THC).
• Change testing requirements for THC and CBD potency in final products. A finished hemp cannabinoid product must be tested for THC and CBD concentration in the same manner as cannabinoid products under OAR 333-007-0340 before it can be sold or transferred to a consumer.

In addition, the permanent rules address issues that shall go into effect on January 1, 2020. These issues include:

• Revision of sampling procedures for pre-harvest THC testing. Specifically, the rules require that the total THC be tested, as required by the 2018 Farm Bill, and thus, USDA requirements.
• Restructure of handler registration application process and fees, which adds the option for registration by reciprocity for OLCC-licensed processors who hold a hemp endorsement to process hemp with the OLCC Recreational Market.
• Restructure the grower registration application and fees. In lieu of a $1,300 hemp grower application fee, the permanent rules provide for two separate fees and applications: (1) a fee of $250 for a grower registration application, and (2) a fee of $500 for each grow site registration application. Under this new structure, the average grower would pay lower registration fees ($750-1,250) because a majority of registered growers currently farm two or fewer fields.

For more information on the new permanent rules, don’t hesitate to contact our team of cannabis and CBD attorneys.