For hemp, skipping proposed rule stage could create problems

With the intense pressure that the U.S. Department of Agriculture is under to draft the hemp rule in time for the 2020 planting season, it is conceivable that the department could forgo issuing a proposed rule and proceed with issuing an interim final rule to expedite the process. By doing so, it would offer the Agricultural Marketing Service (AMS), the USDA agency drafting the rule, the benefit of implementing the rule immediately, while maintaining the ability to accept public comments and make modifications before it is finalized.

Under the Administrative Procedures Act, an agency is allowed to skip the proposed rulemaking step and publish an interim final rule if it has decided that it would be impractical, unnecessary or contrary to the public interest.

Proceeding directly to an interim final rule is not without precedent at USDA. One notable example was in 2002 when an investigation into a Listeria outbreak concluded that some establishments were not adequately addressing this contamination threat in their hazard analysis and critical control points plans or through other control measures. In response to this, the Food Safety and Inspection Service at USDA issued an interim final rule in June 2003 that detailed various requirements for addressing Listeria contamination. The service affirmed the interim final rule in June 2015 while also soliciting additional public comments; interestingly, this rule continues to maintain its interim status.

From the agency's perspective, an immediate implementation of the hemp rule would allow AMS to begin reviewing and approving state plans right away; this would give states the ability to license their farmers in advance of the 2020 planting season.

Chaos Forthcoming?

While skipping the proposed rulemaking stage and proceeding with an interim final rule would please hemp growers and their congressional supporters, a number of pending issues may vex the hemp and cannabidiol (CBD) markets. Misunderstandings persist among stakeholder groups of what the hemp rule will accomplish, and it has the potential of creating additional problems if these misunderstandings continue.

The primary misconception is that the rule is much broader in scope. In fact, AMS is drafting a rule that only addresses the growing of hemp, and will not be drafting provisions related to imports and exports or testing of finished product, and these are critical components as these markets continue to expand.

Questions remain on how the Drug Enforcement Agency and Customs and Border Protection (CBP) are going to process imports and exports, especially as it relates to testing of finished products. CBP is reportedly having difficulty determining how it intends to address this issue. USDA issued an import guidance recently, but that only addressed the importation of hemp seeds, and the testing provisions in the AMS rule only will apply to dry crop.

Confusion over the difference between tetrahydrocannabinol (THC) and CBD also could confound stakeholders and federal agencies. Believing it was now permitted because of the farm bill, some food companies have begun considering developing CBD-infused food products, not recognizing that the Food and Drug Administration still considers these products to be unlawful.

FDA Being Deliberative

The FDA currently is exercising some enforcement discretion with these products, essentially looking the other way as long as companies refrain from unreasonable label claims. This explains why consumers still can find CBD food products in certain stores. However, this discretion on the federal level has not prevented some states from seizing products from store shelves or even arresting great-grandmothers at Disney World.

This somewhat chaotic regulatory environment seems to beg for FDA action to address these uncertainties. However, while the FDA has formed an internal working group, and has scheduled a public meeting to examine how CBD-infused foods could be regulated, there is a feeling among stakeholder groups that the agency is moving slowly to address this issue. Just as sustained political pressure resulted in the hemp provision being included in the farm bill, it also might be necessary to compel the FDA to expedite its internal process.

Lack of Testing Standards

For other enforcement agencies, the uncertainty and confusion also could make it difficult to educate field staff and import inspectors on the differences between THC and CBD. It is conceivable that CBP could place holds on certain imported products, such as CBD oils and lotions that are legal to be imported into the U.S. This problem could be exacerbated if there are no testing standards in place for finished products.

The lack of any testing standards for hemp is a particularly confounding issue that will need to be addressed if there is to be a fully developed market for hemp products. The 2018 farm bill defined legal industrial hemp as cannabis with less than 0.3 percent THC. As was noted during the public webinar meeting AMS convened earlier this year, testing can yield different THC levels depending on the environment in which it is tested. So while dry crop might test below the legal limit, it could yield a result higher than the 0.3 threshold if moved to an environment different from where it was grown and thus be deemed illegal.

Don't Forget about EPA

The EPA recently held a meeting to discuss how the agency would address hemp issues. The meeting served as a reminder that growers who wish to incorporate a new use for a pesticide must submit an application to the EPA. In addition to reviewing these applications to determine its public health impact, the agency establishes pesticide residue limits allowable in certain foods.

The lack of extensive data on hemp poses a significant problem for EPA in this regard. It will make it more difficult and complex for the agency to establish an effective review process and determine an appropriate residue limit. Despite the availability of a few approved pesticides and natural options, some stakeholders seeking more reliable options are worried that it could take years before the EPA approves new pesticides for use on hemp fields.

Conclusion

If AMS decides to expedite the hemp rule and proceed directly to publishing an interim final rule, it is unlikely to encounter any congressional opposition because of the bipartisan support for this issue, and the need to meet the deadline for the 2020 planting season. However, significant work remains if there are going to be fully developed and functional markets for hemp and CBD products, and it is important to note that the rule being drafted by AMS is a small, initial step in that process.