The Interim Final Rule, also known as the Hemp Bill Ruling, marks a significant development in the legal landscape of hemp production in the United States. This comes following the 2018 Farm Bill, which legalized hemp as an agricultural commodity and removed it from the list of controlled substances.
Understanding the Interim Final Rule
The Farm Bill’s passage was just the beginning. It mandated the establishment of a federal regulatory program for hemp production, leading to the creation of the U.S. Domestic Hemp Production Program. This program, detailed in the Interim Final Rule, sets a national regulatory framework for hemp production, addressing licensing, compliance, land location, testing, and disposal of non-compliant plants. Published in the Federal Register on October 31, 2019, these guidelines became effective immediately.
The U.S. Department of Agriculture (USDA) now oversees the approval of state hemp production plans, with the authority to regulate hemp cultivation nationwide.
State-Level Hemp Production and the USDA’s Role
Although the Farm Bill allows for hemp production, states can choose to ban it. Currently, 46 states permit hemp cultivation, with Idaho, South Dakota, Mississippi, and New Hampshire opting out. State plans that were in place before the USDA’s new standards will need revision and reapproval to align with federal guidelines.
U.S. Secretary of Agriculture Sonny Perdue emphasizes the USDA’s commitment to creating a fair, consistent, and science-based regulatory process for hemp production.
New Guidelines and Implications for Hemp Production
The Interim Final Rule introduces several important aspects for hemp cultivation:
- Native American tribes and states must submit hemp production plans to the USDA for approval.
- Farmers must obtain licenses under state or federal hemp programs.
- The USDA has defined guidelines for THC level testing, including a margin of error for crops slightly above the 0.3% THC threshold.
- Protections are in place for farmers who inadvertently produce crops exceeding the THC limit, with provisions against negligent or criminal violations.
- Interstate transportation of hemp must not be obstructed by states or tribes that prohibit hemp production.
This “interim final” status allows for the rule to be in effect while open to modifications before becoming final, set to last for two years from publication.
Benefits and Future Implications
The USDA’s guidelines clarify the requirements states need to meet for hemp production approval. This also opens doors for farmers to access USDA programs previously unavailable to them, like insurance coverage through Whole-Farm Revenue Protection.
Impact on Hemp and CBD Merchant Accounts
Notably, the Interim Final Rule does not directly influence hemp and CBD producers’ access to banking and financial services, including credit card processing. However, Bankcard International Group continues to offer domestic Hemp CBD merchant accounts, navigating the industry’s complexities to support merchants with reliable and affordable payment processing solutions.
As the legal landscape of hemp cultivation evolves, we remain committed to guiding and supporting our merchants through every legislative change and market development.
