One Step Closer to Hemp Production in Iowa

Today, the United States Department of Agriculture (USDA) released its interim final rule for nationwide legal hemp production. This is an important step toward hemp production in Iowa.

Hemp production took a hiatus in the U.S. when, in the 1970s, it was classified as controlled substance. That all changed in the 2018 Farm Bill which legalized commodity production of the crop at the federal level, paving the way for its reintroduction in the market. Given its versatility, many are eager to tap into this market and further diversify their portfolio with industrial hemp production.

The most recent Farm Bill also directed the USDA to promulgate regulations and guidelines for hemp production.

The rule released today covers various procedures, including:

• Licensing;
• Maintaining information on the land where hemp is produced;
• Testing THC concentrations;
• Disposing of non-compliant plants; and
• Handling violations.

The rule also contains several positive implications for this prospective market. First, it clarifies hemp’s declassified status, thereby reducing uncertainty surrounding the legality of hemp production. Second, producers will now be eligible for crop insurance programs provided by the USDA, which is often a prerequisite to accessing financing. Finally, states that continue prohibiting hemp production at the state level — despite federal declassification — will be barred from interfering with interstate transport of the crop, opening up a national marketplace.

Before hemp production gets the full go-ahead in Iowa, the USDA must approve the State’s plan.

The public comment period for the interim rule commences immediately and remains open for 60 days, closing on December 30, 2019. You can access the final rule here: Establishment of a Domestic Hemp Production Program.

If you are interested in growing, processing, or selling hemp and have questions regarding regulatory compliance or business issues, please contact Joe Leo or Chris Sackett.