The new rule damage hemp businesses — particularly small growers.

What the USDA has released represents a hard line approach that would material remove the “little guy” from the hemp equation.

As what we have been saying since the 2018 Farm Bill was enacted --- the oversight by the USDA will not favor farmers’ rights and create layers of bureaucracy that will reduce profit margins. Under the rules, farmers who grow hemp that tests above the THC limit are required to have law enforcement officers destroy the entire crop.

Northridge Corporation anticipated the consequences and especially the testing of hemp plants that would be regulated by the Drug Enforcement Administration. Our Cannabinoids Analytics division (CAD) will offer the farmers a low cost in-the field testing program and prevent crops from exceeding the 3% THC level.

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By tracking activities on the state by state level, we are able to forecast the near term trends as a federal government creates obstacles for the hemp farmer.

News from Vermont

Vermont hemp farmers are in a “panic” over hemp regulations proposed by the federal government that would strictly regulate the amount of THC — the psychoactive chemical found in the plant when it’s harvested. The rules, just released by the U.S. Department of Agriculture, would bar farmers from harvesting hemp plants that have a THC concentration of more than 3%. State regulators, hemp farmers and processors are concerned that the stricter THC standard could hurt business in Vermont.

Cary Giguere, an official with the Vermont Agency of Agriculture, Food and Markets who oversees the state’s hemp program, estimated under the proposed federal rule, 70% of the crop in the state would not be in compliance. Hemp products sold in Vermont, including those containing CBD, a chemical in the plant used as an alternative medicine, must test at under 3% THC content. Controlling the levels of THC in hemp plants can be difficult for farmers. But hemp that has higher THC levels can be processed to remove the chemical. Giguere said it could take as long as two years for the federal government to finalize the rules, so for now, the industry will operate under Vermont’s hemp regulations.

But after the federal government finalizes those rules, it will have to reexamine and re-approve Vermont’s hemp program, using its new standards. Giguere said he will be negotiating with the USDA to try to loosen some of the proposed THC regulations. He said it seemed the hemp industry across the U.S. was in a “panic” because the proposed federal rule has stricter regulations for THC levels than what is enforced in most states. “We’re not going to condemn a crop that somebody invested a lot to grow when that THC can be mitigated through processing,” Giguere said.

From our perspective, the bill was written less with farmers and more with law enforcement in mind. The regulations were promulgated after the 2018 Farm Bill legalized the production of hemp at the federal level. A USDA spokesperson did not explain the reasoning behind the stricter rules. The official reiterated that the farm bill defined hemp as a cannabis plant with “a THC concentration of not more than 0.3 percent on a dry weight basis,” but provided no further information.

From our Q&A desk:

What's the relationship of CBD and THC in hemp plants?

Hemp plants that are grown for high CBD content also have higher levels of THC. By current federal standards hemp crops having THC levels above 3% are considered marijuana and illegal. Hemp plants that are fully mature have CBD levels at 4% to 7%. As the CBD level climbs toward maturity, the THC generally goes above 3% at least 45% of the time.