Federal Agency Says USDA’s Final Hemp Rule Is Positive Step, But Concerns Remain

The federal Small Business Administration (SBA) says it’s pleased with the final rule for hemp that was recently released by the U.S. Department of Agriculture (USDA)—but there are still outstanding concerns over select regulations.

In the two years since hemp was federally legalized under the 2018 Farm Bill, USDA solicited feedback from stakeholders and developed interim rules that were ultimately finalized this month and take effect on March 22. SBA was one of those interested parties that submitted comments to the agency to improve regulations for small businesses.

The agency’s Office of Advocacy said in a blog post on Tuesday that it is “pleased with some of the changes that [USDA] has made to the rule, as they offer more certainty and are less burdensome to small farmers.”

Those changes include extending the testing window for hemp from 15 to 30 days, postponing until 2022 the requirement that only Drug Enforcement Administration (DEA)-certified labs can conduct such testing and allowing for more flexible disposal and remediation practices.

But while these are improvements that take into account stakeholder input, SBA said that “some concerns remained unaddressed in the final rule.”

For example, in a letter the agency sent to USDA in October, it recommended removing the requirement for DEA-certified labs, arguing that it’s an example of an unnecessarily restrictive policy that threatens to “stifle” the hemp market.

SBA also pressed USDA to extend the public comment period so more hemp stakeholders could weigh in on the proposed rules.

The business agency developed its own recommendations following extensive stakeholder outreach that involved visiting and hearing from hemp businesses in 20 states.

“What was apparent in speaking with small farmers was that the interim final rule, as written, would not allow farmers to participate in the program,” the agency said in the new post, adding that it submitted a public comment to USDA in January that further outlined issues with the interim regulatory proposal.

By and large, SBA’s comments aligned with those of industry participants and lawmakers who expressed similar concerns about kneecapping the market with burdensome regulations at this early stage. And those businesses share the agency’s perspective that the final rule is a welcome development but remains imperfect.

That said, there’s some optimism that regulations could be further refined under the Biden administration. That’s bolstered by the fact that the president’s pick for agriculture secretary, Tom Vilsack, is widely viewed as an advocate for the hemp industry.

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Photo courtesy of Brendan Cleak.