Industrial Hemp, 0421 KSBJ, 90 J. Kan. Bar Assn 2, 24 (2021)

AuthorBy Kenneth Titus and Stephanie Murray, Kansas Department of Agriculture
Position90 J. Kan. Bar Assn 2, 24 (2021)

Industrial Hemp

No. 90 J. Kan. Bar Assn 2, 24 (2021)

Kansas Bar Journal

April, 2021

March, 2021

By Kenneth Titus and Stephanie Murray, Kansas Department of Agriculture

Article Addendum

USDA addressed some of the concerns raised in this article in the timeframe between the article’s completion and its publication. USDA’s final rule on commercial industrial hemp production (86 FR 5596 and 7 CFR 990) was published on January 15, 2021. While the final rule still requires all testing of industrial hemp to be done in a DEA-certified laboratory, it does address some of the other concerns that were raised by KDA and other state departments of agriculture following publication of the interim final rule. Most notably, the final rule allows hemp to be sampled and tested up to 30 days before it is harvested and allows hemp with a THC concentration greater than 0.3 percent to enter commerce after it is remediated into a lawful product. The final rule is currently under review by the new Presidential administration and will take effect on March 22, 2021, if it is not revised. Amendments aimed at better aligning the relevant KDA regulations with the final rule will also be forthcoming in the next year.

I. Introduction

Hemp occupies a unique place in the landscape of global agriculture as one of the earliest cultivated and most widely grown crops in human history and, more recently, as one of the most maligned. Hemp was widely grown in the United States well into the Nineteenth Century,1 but production had declined sharply by the late 1800’s, and the final blow to the industry occurred when hemp was included in the Controlled Substances Act of 1970, thereby criminalizing cultivation and possession of the crop.2 Calls for reform have persisted ever since, and the 2014 and 2018 Farm Bills have recently opened the door for re-establishing commercial hemp production in the United States.3 However, these laws co-exist uncomfortably at times with existing federal and state criminal laws, and the resulting legal landscape is one that must be navigated with care. This article briefly summarizes the history of hemp production in the United States and explores recently enacted federal and state statutes and regulatory schemes related to the crop, highlighting elements of Kansas law that practitioners should be aware of as they guide clients through this evolving area.

II. History of Hemp Production in the United States

Hemp’s role as a staple crop in North America pre-dates European settlement on the continent. Native Americans had long grown the crop to produce, among other things, paper, thread, clothing, and food.4 English colonists at Jamestown grew hemp in the early-1600s, and some early colonial laws even required farmers to produce the crop.5 Hemp production in New England continued throughout the 1700s, and by the mid-1800s hemp had become a cornerstone American agricultural commodity.6

Following the Civil War, however, a rise in imports and manufacturing saw American hemp production declining. Tis trend continued into the early Twentieth Century and was exacerbated by public apprehension regarding cannabis, the family of plants that includes marijuana as well as hemp.7 While hemp and marijuana are visually indistinguishable, hemp does not contain enough of the psychoactive compound tetrahydrocannabinol (“THC”) found in marijuana to produce a “high.”8 Nonetheless, the similarities between hemp and marijuana have long caused a stigma surrounding hemp. The public perception of cannabis as dangerous to American morality and society fueled a series of laws that would eventually end American hemp production and lay the groundwork for the multilayered legal framework that present-day producers, regulators, and attorneys must navigate as the crop begins to make a comeback. One of the first notable laws of this kind was the 1937 Marijuana Tax Act, which taxed the sale of all cannabis, thus discouraging hemp production.9 Hemp saw a brief resurgence during World War II, when the United States Department of Agriculture (“USDA”) initiated a “Hemp for Victory” program that resulted in more than 150,000 acres of hemp in production.10 However, that wartime revival proved to be short-lived, and America’s last commercial hemp fields (until recently) were planted in 1957.11

The 1970 Controlled Substances Act made all cannabis a Schedule I illegal drug.12 Thus, hemp was treated the same as drugs like cocaine and heroin, and its production or possession was illegal under federal law.[13] Advocates have long pushed to reverse this, citing hemp’s versatility and resulting economic potential, as well as what many consider the flawed logic of treating cannabis as a controlled substance in the first place. The durable stalk of hemp plants can be harvested for fiber and used to manufacture rope, paper, cosmetics, and many kinds of building materials.14 The flowers, seeds, and oil of the plant are purported to offer wide-ranging health benefits and provide relief from various medical conditions.[15] Proponents of hemp production thus argue that misguided federal policy has for decades outlawed a harmless crop at the cost of significant economic opportunity and improved quality of life for many people. Despite these arguments supporting the re-establishment of a commercial hemp market in America, the state of the law regarding hemp is quite complex, rapidly developing, and varies significantly among states. Additionally, hemp production is not immune to the difficulties faced by all farmers: unpredictable weather and equipment issues, frequent labor shortages, and market volatility. Indeed, hemp is in many cases more susceptible to these pitfalls than traditional crops, as most present-day producers lack extensive knowledge of the crop and standard equipment is not always effective for harvesting or handling hemp. Broader economic consequences must be considered as well. For example, an emerging trend already indicates a likelihood that an influx of new hemp producers coupled with a lack of sophisticated processing systems will food the market with raw harvested industrial hemp for which there are no buyers.16 All of these factors indicate that, though hemp has promising potential, the establishment of stable markets poses significant challenges.

III. Establishment of Industrial Hemp Research Programs

Proponents of hemp production finally made some progress in 2014, when Congress passed a new Farm Bill, the Agriculture Act of 2014, which exempted hemp produced under a state-regulated research program from the Controlled Substances Act.[17] Tis was a significant step forward for American hemp production, opening the door for producers and state agriculture officials to begin learning more about a crop that had been absent from American agriculture and economics for decades. However, hemp production under the 2014 Farm Bill was not without complexities and limitations that caused challenges for regulators and frustrations among stakeholders.

A. 2014 Farm Bill and Alternative Crop Research Act

The 2014 Farm Bill allowed the production of hemp -defined as “the plant Cannabis sativa L. and any part of such plant, whether growing or not,” with a delta-9 THC concentration of 0.3% or less18 - for research purposes. Specifically, it provided that “notwithstanding the Controlled Substances Act…or any other Federal law, an institution of higher education…or a State department of agriculture may grow or cultivate industrial hemp if (1) the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and (2) the growing or cultivating of industrial hemp is allowed under the laws of the State in which such institution of higher education or State department of agriculture is located and such research occurs.”19

In light of these rather open-ended federal requirements for a pilot program, some states implemented programs soon after the Farm Bill’s passage and took quite a broad approach to allowing hemp cultivation. For example, Colorado, which had legalized both medicinal and recreational marijuana by state law prior to the passage of the 2014 Farm Bill, implemented a program that essentially allowed for the commercial production and sale of hemp within the state.20 Kansas was slower to implement a hemp research program and ultimately took a more limited approach.21 The Alternative Crop Research Act, enacted in 2018, provided that “[t]he [Kansas Department of Agriculture], alone or in coordination with a state educational institution, may cultivate industrial hemp grown from certified seed and promote the research and development of industrial hemp, in accordance with 7 U.S.C. § 5940….”22 Importantly, the Alternative Crop Research Act used the 2014 Farm Bill’s definition for “industrial hemp.” Thus, any crop produced pursuant to the act that had a THC concentration greater than 0.3 percent was not actually legally considered hemp, but illegal marijuana.

The Alternative Crop Research Act directed the Kansas Department of Agriculture (“KDA”) to promulgate rules and regulations to carry out the law. In the spring of 2018, KDA began working to implement a hemp research program, developing regulations with the assistance of a statutorily required advisory board and representatives from states that had already implemented research programs.[23] Initial discussions among legislators centered on whether the Alternative Crop Research Act should limit eligibility to participate in hemp production to KDA itself and the specific state educational institutions identified in the statute or should participation be made more broadly available to private producers...

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