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As I have discussed earlier, the 2018 Farm Bill makes significant changes to the classification of hemp and allows states to begin to develop regulations for the legal production of hemp. The 2018 Farm Bill removes hemp from the definition of marijuana under the Controlled Substances Act and allows for states and tribal governments to begin developing hemp production plans. Hemp produced under these plans will potentially be eligible for the federal crop insurance program. The Maryland General Assembly during the previous session passed legislation allowing the Maryland Department of Agriculture (MDA) to develop a hemp production plan for the state. MDA will be able to create this hemp production plan once USDA releases the guidelines for the state programs.
State and Federal Hemp Production Plans
Although hemp is no longer a Schedule 1 drug, this does not mean it is legal to grow. To be legal, Section 10113 requires that a state, tribe, or federal government develop a hemp production plan. A hemp production plan is the way producers will be monitored and will regulate the production of hemp. Section 10113 lays out two routes for a producer to begin producing hemp legally.
The first route is for a state or tribal government to take charge of regulating hemp production within their boundaries. To take charge, a state department of agriculture will submit to USDA for approval of a hemp production plan. The hemp production plan must include:
1. The system of land where hemp is produced, including the legal description of the land. The system will need to maintain land records for at least three years.
2. Testing procedures to demonstrate that hemp produced has less than 0.3 percent THC concentration level per dry weight basis.
3. Procedures for destroying any plants and products with THC concentrations higher than allowed by the law.
4. Procedures to enforce the law.
5. Procedures for conducting at minimum annual inspections of a random sample of hemp producers to verify hemp produced in the state does not violate the law.
6. A system to convey hemp producers’ information to USDA.
7. Certification to USDA that the state or tribe has the resources and personnel to carry out the requirements of the hemp production plan.
A producer will need to comply first with the state's hemp production plan before legally growing hemp. Currently, these plans are estimated to take a year to 18 months for states to finalize and USDA to approve.
The second route is if the state or tribal government does not have an approved production plan, then USDA will develop a plan for them. USDA’s ability to create a state or tribal plan will depend on the existing state or tribal laws. For example, if state law still classifies hemp as a controlled substance, then USDA will not be able to develop a production plan. If hemp production is permitted, then the USDA hemp production plan will need to meet the same minimum criteria required for states and tribal governments.
One important note about the 2018 Farm Bill is that Section 10114 allows for hemp products to be transported freely through states. States can still ban hemp products, but the state would not be able to limit transportation through the state of hemp products bound for other states.
Section 10113 does lay out what potential violations would be. A producer can negligently violate a state's, tribal government, or USDA hemp production plan by failing to provide a proper legal description of the land that hemp will be grown on. A producer could also violate by failing to obtain the required license or other authorization required under the plan before producing hemp. Another example would be producing hemp with a THC level greater than 0.3 percent per dry weight.
With the first negligent violation, a producer can correct the violation by complying with a corrective action plan developed by the state, tribal government, or USDA. Three negligent violations in five years will result in the producer being barred from producing hemp for five years. Section 10113 does not allow anyone with a felony drug conviction within the past 10 years to grow hemp under a hemp production plan.
During the 2019 legislative session, the Maryland General Assembly passed HB 1123 which will make changes to the state's hemp laws. The bill was recently signed by Governor Hogan and will be effective on June 1, 2019. Maryland's criminal law currently excludes industrial hemp from the definition of marijuana. Section 5-101 currently excludes "the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9-tetrahydrocannabinol concentration that does not exceed 0.3% on a dry weight basis." (MD. CODE ANN., CRIM. LAW. § 5-101 (r)(2)(vi)). On June 1, 2019, this definition will be revised to include "the plant Cannabis sativa L. and any part of that plant, including all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta–9–tetrahydrocannabinol concentration that does not exceed 0.3% on a dry weight basis." (HB 1123). This revision will make clear that products derived from industrial hemp are excluded from the definition of marijuana.
HB 1123 makes minimal changes to the existing hemp research program that MDA manages. The most significant changes in HB 1123 will be with the creation of a Hemp Production Program. The new program will allow growers who meet the qualifications in the state's hemp production plan to grow hemp without participating in the research program.
HB1123 will become effective on June 1, 2019, but this does not mean that growers can start growing hemp immediately unless they are already participating in the research program. MDA still needs to develop a hemp production plan for USDA approval. At this time, USDA has not published the regulations to implement the requirements for a hemp production plan but this is expected to happen later this year. Maryland growers still need to wait for more leeway in growing hemp till sometime in 2020.
H.B. 1123, 439th Sess., (Md. 2019).