Washington State passed the final hurdle for solidifying its status as a hemp-producing powerhouse. On February 20, 2020,  the USDA issued its approval of Washington’s Hemp Plan. The plan was an outgrowth of the passage of Senate Bill 5276, Washington’s Hemp Production Bill, which passed on April 26, 2019.

 

The Agricultural Improvement Act of 2014 (known as the 2014 Farm Bill) allowed for a partial federally hands-off approach to Hemp. Under the 2014 Farm Bill, states were allowed to create Industrial Hemp Pilot Programs (“IHPP”), allowing States to create programs at Universities or under the umbrella of the State’s allowable research by private entities. The 2014 Farm Bill temporarily created a definition for hemp, and the federal government was prohibited from using federal funds to enforce any federal law against hemp. In exchange, the states were to create programs for research into cultivation, processing, and marketing of hemp products. The IHPP program created the burgeoning market for hemp and CBD that we see today, allowing for interstate commerce between states that implemented IHPPs.

 

Washington took full advantage, creating its own IHPP through the passage of SB 6206 on February 11, 2016. The Industrial Hemp Growing – Pilot Program and Research Act allowed the Department of Agriculture to approve plans to grow, produce, possess, process, and exchange hemp and hemp products. Washington’s plan was less robust than some states, and it did not allow the processing for hemp byproducts in food or topicals, extracts, concentrates, or for inhalation. For those that are in the industry, that essentially meant Washington became an export market for industrial hemp. That of course did not stop people from doing just that, often without an explicit IHPP license. Washington’s hemp market, both under the IHPP and in the grey market, was booming.

 

Four years, and several appropriations bills later, the federal government passed the Agricultural Improvement Act of 2018 (known as the 2018 Farm Bill). Under the 2018 Farm Bill, hemp has been specifically legalized for interstate commerce. Under the Bill, those states with Industrial Hemp Pilot Programs were allowed to continue under their previous IHPP. A state with an IHPP has a period of time to create its own Industrial Hemp Program (“IHP”). The rules of a particular sate’s IHP may be more restrictive than the federal regulations. In addition, if a state does not implement its own IHP by a certain date, then the federal regulations apply. If a state had no IHPP, the deadline to create an IHP is twelve months from the creation of the USDA program. The USDA issued its Interim Final Rule on October 31, 2019. However, this interim final rule has gone through its Notice and Comment Period (ending January 29, 2020), after which the USDA will issue its Final Rules under the 2018 Farm Bill (still no word on when the FDA rules are coming, though we anticipate draft rules soon).

 

Washington, of course, did not wait for its IHPP to expire, and passed its Hemp Production Bill. Under Washington’s Hemp Production Bill, hemp could now be processed into concentrates and placed into food, as long as all other regulations were met (removing the language prohibiting concentrates, cosmetics, food, etc.). Don’t get too excited just yet, the language of the current law states that products have to be “allowable under federal law.” What does this mean? It means that products will generally go through an FDA review by an FDA liaison to the WSDA. The FDA, at this juncture, has taken a notoriously draconian approach to the use of hemp extract in anything but cosmetics, and all but banned CBD unless you are an approved drug manufacturer.

 

Now I know what you’re thinking. Didn’t I read on Canna Law Blog that hemp was now classified as food under Senate Bill 5719, which was “recently passed” by Washington State? You may have read that, but the information was, shall we say, less than accurate.

 

In fact, there was a bill that had been introduced to revamp the hemp program that was initiated after our current hemp bill was put into place. Senate Bill 5719 (and its companion, House Bill 1401) sought to revamp Washington’s hemp program. The bills would have allowed CBD to be reclassified as a food product, and would have removed the “allowable under federal law” language. The only problem with it is…well…the bills simply did not pass. SB 5719 was introduced during the 2019 legislative session, but only made it as far as the Agriculture, Water, Natural Resources, and Parks Committee, where the bill stalled. The real work was done in the House, where it Passed to the Rules Committee for a third reading. Unfortunately, in the 2020 legislative session, the House Bill was placed into the notorious X-File, killing the bill. The Senate Bill was reintroduced in the 2020 session, but did not appear to have made it past a major committee deadline, and looks dead. Absent a miracle, it looks like we will have to wait for the 2021 legislative session for this to make any headway.

 

Until then, we will have to wait for the FDA to publish its rules. The industry and consumers will have to scream loud to get their voices heard (and by scream, I mean submit a written comment on the proposed rules through the Administrative Procedures Act comment process, as implemented by the FDA).

 

But, as my high school French teacher, Madame King, used to say: “Revenons à nos moutons,” or “let us get back to our sheep.” Where was I? Washington’s Hemp Plan.

 

Washington State’s Hemp Plan goes beyond simply describing the Washington Administrative Code provisions under Chapter 16-306, but provides some pertinent descriptions of how those provisions will be implemented by the Department of Agriculture (the unspoken rules). One key difference in Washington’s plan is sampling. Under current proposed USDA rules, any sample testing “hot” (as opposed to an aggregate of samples from the same lot) may result in destruction. If the sample was taken from the top of the plant, this would, of course, create a false reading as to THC amounts, as buds taken from the top of the plant may be “hot” as compared with the overall THC content of the whole plant or even the whole plant’s buds. Washington, on the other hand, uses an aggregate system, sampling from various plants in a lot, and then aggregating the clippings to determine whether a plant is “hot”. If you want to read for yourself, take a look at page 19 of Washington State’s Hemp Plan, the WSDA Hemp Production Pre-Harvest Sampling Protocol.

 

Some of the key takeaways from the Washington Hemp Plan are:

 

  • No transporting until you have your THC certification (under the federal rule, as long as the testing has occurred, there is no restriction on harvest and transport, but the certificate is not necessarily required, which could cause a delay if there are backlogs in testing results);
  • Time payments for inspection – you will pay for not only the testing fee, but the time and mileage of the person doing the testing, which could hurt remote farms without a local WSDA representative);
  • Testing fees based on number of samples (i.e. – a bulk discount). This stands to hurt small hemp farmers who may have less samples to test, but are paying more per sample – up to five times more!
  • Ties to child support – if you don’t pay, your license can be suspended.
  • Similar culpability rules as under the USDA guidelines for when THC content moves from excusable to possibly criminal.

 

Unfortunately, if you wished your voice to be heard on the WSDA rules, the opportunity for change is limited. The comment period on the expedited rules ended January 21, 2020. Gleam Law has the ability to submit requests for rule-making or for rule changes, but such changes are hard to come by without good reason.

 

For those entering the business, we recommend you look not only at the statutes, but the regulations, the interpretive documents (like the hemp plan), and heed the advice of your attorneys as to what is and is not allowed under the current regulatory schema. Unless your attorney is looking to all those sources, they may get you into regulatory hot water, and cause an otherwise viable product to be seized and destroyed because the proper authorization was not obtained. If you are in the industry and looking for proper regulatory guidance, look to Gleam Law. We know hemp.