By: Paul Stevenson
After learning the application and hemp license holder requirements in Part I of this Series and the rules and procedures regarding the sampling and testing of hemp in Part II, it is now time to turn to the TDA plan’s provisions covering violations, license suspension and revocation, hemp transportation, and hemp seed requirements.
As a hemp license holder, if you violate the TDA plan, it is imperative to comply with any enforcement action or corrective action plan imposed by the TDA in order to avoid any further negative consequences for you and/or your hemp operations.
TDA Enforcement and Negligent Violations
Under the TDA plan, any person may file a complaint with the TDA if they have cause to believe a hemp license holder has not complied with or has violated any of its provisions. If the complaint is deemed valid and acceptable, the TDA will conduct an investigation, compose a written report, and notify the person claimed to be in violation and the “owner or lessee of the land where the incident(s) allegedly occurred of the existence of the complaint.” 4 TAC § 24.32(d).
The TDA appears to adopt the USDA’s regulations regarding its enforcement mechanisms, definitions and examples of negligent violations, and corrective action plans, all of which are thoroughly explained in USDA Hemp Production Plan Part III: Compliance, Violations, and Recordkeeping. Essentially, if a Texas hemp license holder commits a negligent violation of the TDA plan, she will not be subject to any criminal enforcement; however, the hemp license holder will typically have to submit and comply with an approved corrective action plan to cure the negligent violation.
A hemp license holder commits a negligent violation under the TDA plan for reasons, such as:
(b)Negligent violations shall include, but not be limited to:
(1) failure to provide a legal description or geospatial location of the facility on which the license holder produces or stores hemp;
(2) failure to obtain a license or other required authorization from the Department; or
(3) production of cannabis with a delta-9 tetrahydrocannabinol concentration exceeding the acceptable hemp THC level. Id. at § 24.33(b).
However, hemp license holders should be aware that if reasonable efforts are used to grow hemp and it exceeds the acceptable hemp THC level of 0.3 percent but does not have a THC concentration level of 0.5 percent or more, then the TDA will not consider this to be a negligent violation. See id. at § 24.33(c). If a hemp license holder is found to have committed a violation with a higher culpable mental state than negligence (recklessness, knowledge, or intent), the TDA will report this hemp license holder to the Attorney General of the U.S., the Office of the Texas Attorney General, the Texas Department of Public Safety, and law enforcement authorities with proper jurisdiction. See id. at § 24.34.
Corrective action plans last for two years from the date of their approval by the TDA, and they typically consist of information, including the date when each negligent violation must be corrected, the steps required to make such corrections, and written descriptions of how the hemp license holder shall comply with the corrective action plan. See id. at § 24.33(d). The TDA or any U.S. authority must perform inspections to ensure the corrective action plans have actually been implemented. Moreover, if a hemp license holder already has a corrective action plan in place and commits a subsequent violation, then “a new corrective action plan must be submitted with a heightened level of quality control, staff training, and quantifiable action measures.” Id. at § 24.33(f). Lastly, if a hemp license holder commits three negligent violations within five years, she will be ineligible to produce hemp for five years from the most recent violation and will have her license revoked. See id. at § 24.33(g).
License Suspension and Revocation
The TDA appears to have also adopted the USDA’s provisions on the suspension and revocation of hemp producers’ licenses. If the TDA receives credible evidence that a hemp license holder has failed to comply with a written order regarding a negligent violation, the TDA may issue a notice of suspension. See id. at § 24.35(a). If a hemp producer’s license gets suspended, she must not handle or produce hemp from any location, and she may have to complete a corrective action plan. The suspension may be appealed, but if the appeal is denied, the hemp producer’s license may not be restored for at least one year. See id. at § 24.35(e).
The TDA will revoke a hemp producer’s license if she is found guilty of any controlled substance felony, if she falsifies information or documentation with a higher culpable mental state than negligence, or if she is found to be growing cannabis that exceeds the acceptable hemp THC level with a higher culpable mental state than negligence. See id. at § 24.36.
Under the TDA plan, Section 12.020 of the Texas Agriculture Code shall be applied to provide for the assessment of any administrative penalties. See id. at § 24.37. Failure to pay administrative penalties and/or failure to pay final judgments associated with findings of violations “shall constitute a violation of this chapter.” Id.
Hemp license holders may appeal TDA-imposed administrative actions. If the appeal is successful, the person will retain their license and the administrative action will be dropped by the TDA; however, if the TDA denies the appeal, the person’s license will be suspended or revoked, and the administration action will be enforced. See id. at § 24.38(b). In accordance with Chapter 12 of the Texas Agriculture Code, a formal adjudicatory proceeding may then be requested. See id. at § 24.38c).
Hemp Transportation Requirements
Persons transporting hemp must adhere to the requirements imposed by the TDA. When transporting hemp out of a facility where hemp was produced, a TDA-issued transport manifest is required. See id. at § 24.39(a). Furthermore, a TDA-issued transport manifest is mandatory for all hemp samples that are collected and transported to a registered laboratory for testing. See id. at § 24.40. For hemp that is produced outside of Texas and transported in Texas, it “shall be accompanied by valid documentation authorized by another state, Indian Nation, or U.S. territory.” Id. at § 24.39(b).
Any person transporting hemp, whether produced in Texas or outside of Texas, shall not transport hemp “that contains an agricultural pest or disease as listed in Title 4 of the Texas Administrative Code Chapter 19.” Id. at § 24.41. Some of the pests and diseases listed in this chapter of the Texas Administrative Code, include red imported fire ants, pecan weevils, lethal yellowing, and citrus greening. See 4 Tex. Admin. Code Ch. 19. Additionally, any person transporting hemp in Texas “shall not concurrently transport any cargo that is not hemp material.” 4 TAC § 24.43. This provision seems unduly burdensome, so it is important to reemphasize that the rules under the TDA plan have only been proposed, not finalized. Anyone in the hemp industry that is concerned with ambiguous provisions such as this one should raise their concerns during the time period open for public comment, which lasts until Monday, February 10.
Hemp Seed Requirements
The revised proposed rules establish that hemp seed may not be sold or distributed for use in Texas, unless the hemp seed is certified or approved by the TDA. According to the TDA plan, the TDA will make available to hemp license holders a list of businesses whose hemp seed has been certified or approved for sale, distribution, or production in Texas. See id. at § 24.44(a). After May 1, 2020, persons or entities must have a valid TDA-issued hemp license in order to sell, buy, possess, or hold hemp seed. See id. at § 24.45.
A person seeking certification or approval of hemp seed must submit a completed TDA-prescribed form. Along with this form, the following requirements must be fulfilled:
(b) A person requesting for the certification or approval of hemp seed for a particular variety shall provide the following information to the Department:
(1) name of kind and variety;
(2) a statement concerning the variety’s origin, and the breeding procedure used, in its development including evidence on stability (evidence on stability must include any field test reports and sample test results demonstrating the hemp seed was used to grow hemp plants which tested within the acceptable hemp THC Level);
(3) a completed objective form for the crop as provided by the Department Seed Quality Program, if such form is available. The completed objective description form as provided by the U.S. Plant Variety Protection Office may be used in lieu of the Texas form;
(4) a statement delineating the geographic area or areas of adaptation of the variety; and
(5) such other information as may be requested by the Department which may include but is not limited to:
(A) special characteristics of the seed and of the plant as it passes through the seedling stage and flowering stage; and
(B) other evidence of performance of the variety (date, graphs, charts, pictures, etc.) supporting the identity of the variety, if known. If statements or claims are made concerning performance characteristics, such as yield, tolerance to insects or diseases, or lodging, there must be evidence to support such statements. Statistical analysis of data is encouraged. Id. at § 24.48(b).
The TDA may revoke hemp seed variety certification if the hemp seed variety fails to meet the standards described above.
For persons who have their hemp seed certified or approved, a few more requirements must be met before the hemp seed can be sold, produced, or distributed for use. Hemp seed sold or distributed for use in Texas must “meet the legal standards for seed quality and seed labeling required by Texas and federal law, as well the legal standards of the jurisdictions from where the seed is originally sold and produced.” Id. at § 24.46(a). Additionally, this hemp seed must meet the TDA’s seed quality and labeling requirements, which include the following:
(c) Hemp seed sold, offered for sale, distributed, or used in the State of Texas must contain a clear, legible statement on the label in English in addition to any other language on the label indicating the:
(1) specific variety of the hemp seed;
(2) the seller or distributor; and
(3) the location and jurisdiction of origin of the hemp seed. Id. at § 24.46(c).
If a person’s hemp seed is properly certified by the TDA and meets all the requirements listed in the section above, she may legally sell, produce, hold, use, and/or purchase hemp seed.
Lastly, for maintenance and recordkeeping purposes, any person who sells or distributes hemp seed in Texas must keep records indicating the following:
(1) the origin of the hemp seed for five (5) years;
(2) the person or entity from whom the person purchased the hemp seed;
(3) any documentation indicating certification or approval of the provenance, quality, and variety of the hemp seed; and
(4) the location and jurisdiction of origin of the hemp seed. Id. at § 24.47.
If these final recordkeeping requirements are met, a person dealing with hemp seed will be fully compliant with all the TDA plan’s hemp seed provisions.
Final Comments
We hope you have enjoyed, as well as learned from, the information presented in our Revised TDA Hemp Production Plan series. Any concerns with the TDA’s proposed rules and provisions should be raised during the window for public comment, which is open until Monday, February 10.
As hemp business lawyers, we are prepared to discuss all of your hemp production and legality questions. Contact Ritter Spencer Cheng or give us a call at 214.295.5070 for more information.
