What’s New With Industrial Hemp?

The hemp industry is poised to start booming in the United States. The U.S. is the number one consumer in the world of hemp products (an expected $1 billion will be spent on these by Americans in 2020), yet, most of the hemp to manufacture those products is imported from China, Canada, and Europe. However, thanks to the 2018 Farm Bill, the U.S. is gearing up to start growing domestic industrial hemp to fill the contracts to create the variety of products that can be made with hemp – plastics, fiber, grain, biofuel, food, and the most well-known product, cannabidiol (CBD). More than 78,000 acres of hemp were grown in the United States in 2018 and more than 511,400 acres were licensed for hemp growth in 2019.

Hemp has a history in the U.S. and in Iowa specifically – it was grown by Iowa farmers during WWII to create war effort supplies. Unfortunately, after the war, hemp was categorized with its psychoactive cousin, marijuana and outlawed, and its historic impact is now mostly remembered by hemp advocates and the children and grandchildren of Iowa farmers who grew the crop for the war effort. Drive down any dirt road or highway in Iowa, and you’re bound to see leftover plants descended from these “victory crops.”

In 2014, the Farm Bill legalized industrial hemp on a very strict basis – while still in the federal Controlled Substances Act, states were allowed to create pilot programs to test the marketability and feasibility of the hemp market (this is colloquially referred to as Sec. 7606, referencing the provision in the 2014 Farm Bill which created the pilot programs). A handful of states adopted pilot programs, including Kentucky, Minnesota, and Colorado. The number of states who adopted pilot programs has steadily grown each year since 2014.

Finally, the 2018 Farm Bill drew a bright line rule and declared hemp (which legally is defined as containing .3 percent or less of delta-9 tetrahydrocannabinol on a dry weight basis) as an agricultural commodity for American farmers, making it eligible for crop insurance and interstate transport at the federal. It’s not a free-for-all, of course. A state or First Nations tribal land desiring to grow industrial hemp must create a licensure program and submit it to the U.S. Dept. of Agriculture for approval. States and tribal lands who choose not to adopt hemp legislation must follow the yet-to-be determined standards the USDA will set. Those standards and other regulation have yet to be released. States that were growing under the 2014 law will also have to update and submit plans to be in compliance with the new 2018 law.

So where is Iowa as of Oct. 2019? On May 13, 2019, Gov. Kim Reynolds enacted the Iowa Hemp Act (Senate File 599). The Iowa Dept. of Agriculture and Land Stewardship (IDALS) is directed to submit a growing plan to the USDA for consideration, which the department has indicated they are ready to do as soon as the USDA is ready to accept submissions. There are numerous contingent provisions in the Iowa Hemp Act, which include the same definition of hemp the federal government adopted, licensure requirements, acreage limitations (40 acres per license), retail of hemp products to the extent allowed by federal law, crop inspection requirements, and bill of lading for transportation. However, these provisions do not take effect in Iowa until the USDA receives Iowa’s grow plan, approves it, and then IDALS publishes the approval in the Iowa Administrative Bulletin. While there are high hopes this is all effective before the spring 2020 growing season, there is no crystal ball on the federal government’s timeline on this entire process.

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