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Feds Moving on Hemp-Growing Rules, But Many Questions Remain

October 31, 2019

     The clock has now begun its official countdown until both the federal government and the state release their final regulations governing the growth of industrial hemp.

 

     With the marijuana cousin seen as the next big cash crop in Imperial County, local leaders and farmers hope that brings with it clarity on how the use of local water plays a part in the equation.

 

     The U.S. Department of Agriculture on Oct. 29 released for a 60-day public-comment period its “interim final rules,” or guidelines, to the states and Native American tribes regarding the growth of industrial hemp.

 

     After the public comment period ends, it is expected the USDA rules will become final, and the clock will restart for another 60 days. During that time the California Department of Food and Agriculture will get its chance to seek USDA approval on its own plan for growing hemp.

 

     State plan awaited

 

     It’s the state’s plan on which everyone around Imperial County is waiting.

 

     “We’ve been waiting for this draft document for a long time. First, we heard it would be in July, then August, then September, then October; glad they made October,” county Board of Supervisors Chairman Ryan Kelley, a leading hemp advocate, said during an interview Oct. 29.

 

     “There are still more steps to be taken,” Kelley said, but at the end of the process, “hemp, federally and by states, will be recognized as a commercial commodity.”

 

     What this chain of events means, ultimately, is that the rules under which the 2018 Farm Bill fully decriminalized industrial hemp and made it equal under the eyes of the law to any other agricultural commodity, will finally be realized.

 

     That bill requires both USDA and the states have their final rules and regulations in place before the gates can open wide and unrestricted on the hemp industry. Instead, growers all over the United States, including Imperial County, are dabbling in the “next big thing” under the guidelines of the 2014 Farm Bill, which allowed for the growth of industrial hemp if it was tied to a state-approved pilot project or an official research project with an institution of higher learning.

 

     That severely limits hemp’s viability.

 

     In Imperial County’s case, there are about a dozen research agreements in place, and more pending, between growers and Imperial Valley College to cultivate industrial hemp, the formerly outlawed kin to buzz-inducing and federally-outlawed cannabis.

 

     IID water issue

 

     Through all of this uncertainty has stood the Imperial Irrigation District, whose new general manager, Henry Martinez, fired his first shot off the bow of this emerging industrial ship way back in April. He laid out what still appears to be an unofficial “official” policy (no board action was ever taken) on the use of federally apportioned water to grow hemp in Imperial County.

 

     In a letter dated April 16, Martinez wrote to IID water users on the district’s position on the conditions under which Colorado River water would be provided to grow industrial hemp and cannabis.

 

     Therein, Martinez stated federal rules make it illegal to provide water in either case, according to the U.S. Bureau of Reclamation, the federal agency that oversees the district’s apportionment of water. Martinez further warned in the letter that if the bureau were to discover IID water being used in the commercial cultivation of either hemp or cannabis, the bureau will report the offense to the U.S. Department of Justice.

 

     While the use of IID water for the legal cultivation of cannabis in California remains murky --- cannabis cultivation in the state is legally recognized for both recreational adult use and medical use --- Martinez stated in the letter that use of IID water for the growth of industrial hemp will be allowed once a USDA-approved plan from the state Department of Food and Agriculture is in place in accordance with the 2018 Farm Bill.

 

     The bill was signed by President Donald Trump in December 2018.

 

     “Today’s long-awaited announcement by USDA releasing their interim rules for domestic hemp production is welcomed news,” said Antonio Ortego, IID communications chief and intergovernmental affairs director, in a brief statement issued Oct. 29.

 

     He added, “We have been monitoring this process closely and we now look forward to the speedy approval of California’s plan so that IID is able to provide water delivery service in accordance with federal/state law.”

 

     County moves ahead

 

     When Martinez’s letter first went out local officials who were wooing the nascent industry to the county’s doorstep, along with local growers just getting into their research agreements with IVC, were seemingly shocked by the timing of the missive. It came around the same time the county board inked a memorandum of understanding with the California Hemp Association and California Hemp Foundation to promote the industry in Imperial County.

 

     County officials had already set up their initial ordinances welcoming the cultivation of industrial hemp and cannabis in the county in May 2017. At the time of the Martinez letter they were dreaming up the first-ever Imperial County Hemp Summit & Expo, which was a successful two-day affair held in late September this year.

 

     Kelley was one of the people driving the bus of early adopters to the local potential of hemp. He said Oct. 29 of the IID’s position: “We have not talked to anyone (at IID) since the guidance document came out. I hope they are reading through it and see the implications of the new USDA policy.”

 

     Growers respond

 

     Local growers’ industry representative Brea Mohamed also weighed in.

 

     “This was the exact step needed and regulations needed to get approval so IID can deliver water to commercial industrial hemp fields,” said Mohamed, Imperial County Farm Bureau executive director, when asked for comment on Oct. 29.

 

     Some in the agricultural industry don’t believe IID ever had the right to enforce such a policy, among them, Sutton Morgan, a long-time local grower with a track record of opposing district policies relating to its management of Colorado River water.

 

     Morgan is co-founder of Primordia LLC of Brawley, an organic hemp-growing operation also developing a cannabidiol, or CBD, extraction facility that will produce CBD distillate and CBD powder. Such products enjoy wide popularity and offer massive potential profit for producers.

 

     “Although I don’t recognize IID’s authority to require water users to provide proof of compliance of any sort for delivery of water,” Morgan said on Oct. 29, “I think that these regulations that USDA has come out with, and the path CDFA has come up with for this, will lead to a retraction of IID’s positions and alleviate any further issues between the water users, the water-right beneficiaries, and the district in charge of managing that water right.”

 

     He added, “It may at least relieve the tension, is my point.”

 

     Morgan, who grows “several hundred acres” of hemp under an agreement with IVC, noted he isn’t generally concerned with how long it’s taking the feds and state to reach their final rules on hemp growing. He said Primordia was one of the first companies to enter into a research agreement with the college and, so far, has renewed that agreement.

 

     “We plan on engaging with IVC well beyond (anything) CDFA and USDA finalizes. Our relationship with IVC is long term,” Morgan said. “The whole purpose of our engagement with them … we came to IVC to make sure we understood the implications of this industry on the public at large.”

 

     Hope for a resolution

 

     Others, though, would like to see a speedy resolution so that no restrictions are put on growing the potential cash crop, which has not been easy due to high local temperatures and hemp seed varieties not yet acclimated to desert conditions.

 

     Most of the hemp-growing in the United States has so far been in cooler regions such as Kentucky, Oregon and Colorado. In fact, most of the statistics used by the USDA to evaluate the emerging industry have come from trials and university research out of Kentucky. 

 

     “This is a step in the right direction to get the regulations sent out. … The sooner the better, so that we can start growing industrial hemp for commercial purposes,” the Farm Bureau’s Mohamed said. “This is the step in the process we were waiting for … to see if that this can be an impactful crop in the county.”

 

     Imperial County Agricultural Commissioner Carlos Ortiz, who had just returned from an ag commissioners’ association meeting, said he was caught off guard by the Oct. 29 release of the USDA’s interim final rules. He said it wasn’t even brought up during the association meeting. Still, Ortiz issued a statement later in the afternoon after the USDA announcement.

 

     “I am pleased that USDA has released the interim final rule of the U.S. Domestic Hemp Production Program. Although this document is now available, USDA notes that it is a draft version and that the official publication of the interim final rule in the Federal Register may include changes from this version,” he stated in an email. “The effective date of the interim final rule is, and the comment period will not begin until, the date of publication in the Federal Register.”

 

     The interim final rules were expected to be published in the Federal Register on Oct. 31, according to a midday announcement by Sonny Perdue, U.S. Secretary of Agriculture.

 

     “In the meantime,” Ortiz continued in his statement, “officials from the California Department of Food and Agriculture, as well as the California Agricultural Commissioners’ and Sealers’ Association, will be reviewing the 161-page document and preparing comments.

 

     “I encourage growers and industry leaders to review the interim final rule and be prepared to submit comments. It is a team effort in striving to obtain a state program that is credible, accountable and practical,” Ortiz wrote. “(Senate Bill) 153 requires the (state) Secretary of Food and Agriculture to develop and submit a state plan on or before May 1, 2020.”

 

     Although Ortiz makes that statement, the draft interim final rules clearly say that each state or Native American tribe will have 60 days to submit a state or tribal plan for USDA approval once the rules become final and published to the Federal Register.

 

     What the USDA’s document does is reiterate the issues that need to be addressed by the state or Indian tribes in their plans. That includes:

  • Information about the land to be used for production;

  • Sampling and testing procedures for hemp to determine THC levels (a batch of hemp with a concentration of THC higher than 0.03 percent must be destroyed, according to the USDA);

  • Method of disposal of “non-compliant plants” (those handling hemp above the legal concentration of THC);

  • Compliance with enforcement procedures, including annual inspections of hemp producers;

  • Information sharing with the federal government, and “certification of resources.”

     

     

     

     

     

     

     

     

     

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