The United States’ hemp industry is a constant work-in-progress; however, the country has made significant strides in establishing a domestic hemp production program. The United States Department of Agriculture (“USDA”) recently released its final rule, which has been long-awaited by the hemp community. Read below for a recap of recent progress as a reminder to continue putting forth effort and energy toward uniform cannabis legislation in the United States.
On January 19, 2021, the United States Department of Agriculture (USDA) put forth a final rule to concretely establish a domestic hemp production program. This final rule becomes effective on March 22, 2021, and puts forth structured rules, regulations, and guidelines regarding the production of hemp nationwide. The USDA’s final rule is a provisional response to the Agriculture Improvement Act of 2018 (the 2018 Farm Bill), which permitted states and tribal nations to participate in hemp production programs and removed hemp from the Controlled Substances Act’s (CSA) definition of marijuana. Until the issuance of this final ruling, the USDA had previously only released an interim final rule, which was open to public comments and suggested revisions. Below, we break down the distinguishing and notable provisions the USDA incorporated into this new framework.
Although Texas has a medical marijuana program, as established by the Texas Compassionate Use Act in 2015, only three “Dispensing Organizations” have been granted licenses by the Texas Department of Safety (“DPS”) to cultivate, process, and dispense low-THC cannabis (up to a 0.5 percent THC limit as of the date of this blog) in Texas to prescribed patients. See 37 Tex. Admin. Code § 12.1. Texas is a vertically integrated state, meaning that the Dispensing Organization must cultivate, process, package, and dispense the medical marijuana.
In June of 2019, the state of Texas passed HB 1325, which, in part, authorizes and directs the Texas Department of State Health Services (“DSHS”) to enact rules regarding the processing and manufacturing of smokable hemp products. See Tex. Health & Safety Code § 443.204(4). In August of 2020, DSHS banned the processing, manufacturing, distribution, and retail sale of smokable hemp products throughout the state of Texas. See Tex. Admin. Code § 300.104. With its excessive regulations, DSHS essentially stifled the smokable hemp market in Texas, forcing existing companies, such as Crown Distributing LLC (“Crown”), to move their businesses out of state.
The booming cannabidiol (CBD) industry is expanding at a rapid rate and shows no signs of slowing down. The legal cannabis industry also continues to make new strides, as cannabis advocates, reform groups, lobbyists, and lawyers remain active in legislative efforts. As time progresses, more states are adapting and adjusting their respective policies. Cannabis and hemp products, including those which contain hemp-derived CBD, are becoming less taboo and these products are now more legally accessible than ever before.
If you joined us for Parts I through III of this Series, you will know that the Texas Department of State Health Services (“DSHS”) published its proposed rules to govern the Texas consumable hemp program (the “DSHS Proposed Rules”) in the Texas Register on May 8, 2020. The DSHS Proposed Rules are open for public comment for 31 days, meaning the public comment period closes on June 7, 2020. To provide comment on any of the draft rules, you can submit your comments directly to DSHS via email to [email protected]. When emailing comments, you will need to indicate “Comments on Proposed Rule 19R074 Hemp Program” in the subject line. Written comments may also be submitted to Rod Moline, Ph.D., R.S., Section Director, Mail Code 1987, Texas Department of State Health Services, P.O. Box 149347, Austin, Texas 78714-9347.