USDA Issues Opinion on the Transportation of Hemp

Miller & Martin PLLC Alerts | May 31, 2019

On May 28, 2019, the United States Department of Agriculture (the “USDA”) issued a Legal Opinion on Authorities for Hemp Production. The opinion is in response to increased concerns related to hemp cultivation, production and the interstate commerce of hemp and hemp-derived products following the enactment of the 2018 Federal Farm Bill in December.

In its opinion, the USDA’s Office of General Counsel makes the following conclusions: 

  1. "As of the enactment of the 2018 Farm Bill on December 20, 2018, hemp has been removed from schedule I of the Controlled Substances Act and is no longer a controlled substance.”  The 2018 Farm Bill amended the Controlled Substances Act (“CSA”). First by removing hemp from the definition of “marihuana,” and second by excluding the tetrahydrocannabinols (“THC”) in hemp from the definition of THC in the meaning of schedule I of the CSA. In its opinion, the USDA clarified the decontrolling of hemp as a schedule I controlled substance is self-executing. This means that regulations implementing the CSA do not need to be updated for the removal of hemp to take effect. Importantly, the USDA rejects the interpretation that the non-publication of updated CSA regulations to reflect the decontrolling of hemp does not impact the change taking effect.
  2. “After USDA publishes regulations implementing the new hemp production provisions of the 2018 Farm Bill, States and Indian tribes may not prohibit the interstate transportation or shipment of hemp lawfully produced under a State or Tribal plan or under a license issued under the USDA plan.”  The USDA’s second conclusion provides that regardless of whether hemp is produced under a State or Tribe approved program or under a licensed issued by the USDA, States and Tribes may not interfere with the transportation of hemp across State and Tribe lines.
  3. “States and Indian tribes also may not prohibit the interstate transportation or shipment of hemp lawfully produced under the 2014 Farm Bill.”  Here, the USDA states as a matter of statutory interpretation, the 2014 Farm Bill falls within the meaning of “other federal law” in Section 10114 of the 2018 Farm Bill. Thus, States and Tribes are also prohibited from interfering with the transportation hemp grown in accordance with the 2014 Farm Bill.
  4. “A person with a State or Federal felony conviction relating to a controlled substance is subject to a 10-year ineligibility restriction on producing hemp under the Agricultural Marketing Act of 1946. An exception applies to a person who was lawfully growing hemp under the 2014 Farm Bill before December 20, 2018, and whose conviction also occurred before that date.”  Here the USDA clarifies the date in which the exception applies.

In arriving at the above conclusions, the USDA also expresses several significant points regarding the operation of the 2018 Farm Bill. First, to grow hemp you must fall into one of three categories: (1) hold a valid USDA issued license; (2) operate under a USDA-approved State or Tribal plan, or (3) operate under the 2014 Farm Bill pilot program (note: pilot authority will expire one year from the release of the USDA’s licensing plan). Second, although a State or Tribe cannot interfere with the transportation of hemp across State or Tribe lines, the 2018 Farm Bill preserves rights of States and Tribes to prohibit the cultivation of hemp within its territory and preserves their rights to enact and enforce stricter regulations with respect to the production of hemp. Third, the 2018 Farm Bill preserves the authority of the FDA and the Health and Human Services to regulate hemp products under applicable FDA laws.

Finally, while this opinion provides clarity on several concerns significant to the hemp industry since the enactment of the 2018 Farm Bill, this opinion is not binding. The USDA anticipates issuing its implementing regulations on the new hemp production program under the 2018 Farm Bill before the end of the year.

Click here for The USDA’s Legal Opinion.

For more information, contact Stephanie Savage or Merrill Nelson.