USDA’s Final Hemp Rule Runs Afoul of the 2018 Farm Bill Definition of Hemp

by Justin Walsh

Farmers today are being forced to burn their hemp crops because they are no longer in compliance with the new 2021 United States Department of Agriculture (USDA)’s ruling. Kyle Horan, Hemp farmers forced to destroy crops over USDA rules, News Channel 5 Nashville, (Feb. 25, 2022, 5:20 PM), Taking effect March of 2021, the new ruling states that all hemp must have a total THC level of .3%, leaving them in a tight spot. Id. This is contradictory to 2018 Farm Bill, which legalized hemp, which is defined as any Cannabis sativa-L with less than .3% Delta-9 THC on a dry weight basis. Id. As a result, 42% of hemp crops exceed this limit as they are suddenly out of compliance and must be destroyed because of tetrahydrocannabinols other than Delta-9, resulting in millions of dollars lost. Id.

The 2018 Farm Bill (and its predecessor, the temporary authorizations under the 2014 Farm Bill) was revolutionary because it authorized the production of hemp and removed hemp and hemp seeds from the Drug Enforcement Administration’s (DEA) schedule of Controlled Substances. Agriculture Improvement Act of 2018 (“2018 Farm Bill”), Pub. Law 115-334, § 12619 (2018). Before this bill, hemp was considered “marihuana”, which remains in Schedule I for having “No Value to Society”. The Controlled Substances Act (“CSA”), 11 U.S.C. § 802. The 2018 Farm Bill allocated power to the USDA to oversee hemp production, giving USDA the ability to change the criterion. 2018 Farm Bill, Pub. Law 115-334, § 10113 (2018).

While the 2018 Farm Bill gave oversight abilities to the USDA, the intent was simply to oversee the program, and expand statutory definition of hemp, not craft new definitions. Mark A Mcminimy, CRS, The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison 29 (2019). The USDA ruling is an overreach of its power because in the Farm Bill, Congress defined legal hemp as all Cannabis Sativa L with a Delta-9 THC of less than .3%. “2018 Farm Bill”, Pub. Law 115-334, § 12619 (2018). Because they singled out Delta-9 THC, Congress must have been aware that hemp has other types of THC. Regardless, the Farm Bill is clear that its .3% limit only considers the THC levels in Delta-9.  By now counting all THC-producing parts of the hemp plant in its .3% limit, the USDA is essentially changing the definition of legal hemp that was defined by Congress in the 2018 Farm Bill, which would make illegal over 40% of hemp that is currently legally grown. While the USDA has the power to make and amend rules to implement statutes, they do not have the power to create a rule that changes a statutory definition because it would exceed their “Chevron Deference Doctrine”, a term coined in the landmark case, Chevron, where the Supreme Court set forth that when Congress delegates power to an administrative agency on a particular issue or question that is not explicit but rather implicit, a court may not substitute its own interpretation of the statute for a reasonable interpretation made by the administrative agency. Chevron U.S.A., Inc. v. Natural Resource Defense Council, Inc., 468 U.S. 837 (1984). If Congress wanted all THC present in hemp to be included in its .3% calculation, then it renders meaningless the language in the 2018 Farm Bill that only Delta-9 THC needs to be less than .3%. A statute ought, “upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void or insignificant.” United States v. Ramirez-Ferrer, 82 F.3d 1131, 1137–38 (1st Cir. 1996).

This is not the first time government agencies have exceeded their authority in regulating hemp. For example, in 2003, the court found that the DEA’s rule banning all naturally occurring THC in hemp failed because the then-current CSA regulations only banned naturally occurring THC in marijuana, but not hemp, as well as synthetic THC. Hemp Indus. Ass’n v. Drug Enf’t Admin., 333 F.3d 1082 (9th Cir. 2003) (“HIA I”). In addition, in 2004, the court held that the DEA rule banning all products that contain any amount of THC violates Congress’ intent in creating an exclusion to the Controlled Substances Act for mature stalks and seeds, and the DEA was prohibited from enforcing its rules against imported hemp regardless of the presence of cannabinoids. Hemp Indus. Ass’n. v. Drug Enf’t Admin., 375 F.3d 1012 (9th Cir. 2004) (“HIA II”).

Where does this leave hemp farmers? Well, this rule, much like the 2004 case, will likely be stricken down should it be challenged. If the Court in HIA II had already deemed “the DEA’s action is not a mere clarification of its THC regulations; it improperly renders naturally occurring non-psychoactive hemp illegal for the first time”, then this final rule improperly classifies legal hemp to illegal hemp. Id.

If you run into issues with the USDA or another governmental agency improperly taking control of or destroying your crop due to its own twisted interpretation of the 2018 Farm Bill, the hemp and cannabis lawyers at Gleam Law are here to help.