$RIV $RIV.TO $CNPOF 5 Problems Farmers Identify in the USDA Hemp Rules

January 3, 2020

The 2018 Farm Bill was instrumental in pushing the hemp industry from restriction to one worth billions of dollars. The legislation legalized the cultivation and sale of industrial hemp, classifying hemp as cannabis with less than 0.3% THC content. On condition that farmers grew the crop under state and tribal programs, and they adhered to the rule on THC (delta-9 tetrahydrocannabinol), they were free to farm hemp.

A few months later, there was a raving hemp Industry, but since there were hardly any regulations, players in the sector, especially farmers, were denied essential services like insurance and banking. In October, the U.S. Department of Agriculture finally released its much-awaited interim final rule on hemp, with a comment period for interested parties to offer their opinions on the interim rule. Here are five issues that seem to cut across the board;

Total THC vs. delta-9. The Farm Bill outlawed only delta-9 THC, but the new rule proposed testing for the entire THC spectrum. According to Dustin Coleman from Michigan, eliminating the delta-9 test will destroy the entire hemp industry as it is now, and it will prevent farmers from taking the risk in future.

“As a current hemp farmer following all rules and regulations carefully, I feel this is an intentional slap in the face of the small farmers who risked it all, just for our government to introduce rules that cannot possibly be followed.”

Sampling window and DEA labs. Elizabeth Meler from North Carolina argues that there is not enough manpower within the USDA, along with an overall lack of DEA registered testing sites that can accommodate the number of tests that will need to be done. She says that there is no way this can be done in a timely fashion to allow a farmer to get the tests done on all varieties they are growing, receive the test results and harvest within the 15-day sampling window.

Unstable Genetics. According to William Becker from West Virginia, the number of regulations on hemp is becoming unrealistic when no one has grown the crop for generations. He argues that until the genetics are more thoroughly established, the USDA should loosen the regulations to allow American farmers to have greater chances of success.

Hot hemp is the term coined for hemp with more than the federally allowed THC levels. Kurt Beckley from Washington State says that forcing farmers to destroy their crops is a devastating consequence for the already vulnerable demographic, especially given that there are no options to remediate the hot hemp.

He adds that since hot hemp doesn’t qualify for farm insurance, destroying the failed crop could render a farmer bankrupt within a single year. He suggests that mechanisms be instituted to remediate hot hemp so that it can still be sold.

THC Testing itself has been an issue. According to Virginia-based Susan Corbett, farmers cannot predict exactly how different cultivars will react in different environments, soils, and climates. Restricting the growth to 0.3% THC will severely hurt the market, she says.

“We believe the limit should be 1% THC. This will allow farmers to produce high-quality CBD flowers that will bring a decent profit while maintaining a non-psychoactive outcome.”

Analysts are of the view that the entire hemp industry, including companies like Green Hygienics Holdings Inc. (OTCQB: GRYN) and Canopy Rivers Inc. (TSX: RIV) (OTC: CNPOF), are waiting to see how the USDA responds to the concerns above.

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