MANKATO — When the new federal farm bill legalized the growing and processing of industrial hemp for use in CBD oil and other products, processors and farmers jumped in the lucrative market.
But a listening session Thursday hosted by the Minnesota Department of Agriculture in Mankato, attended by nearly 50 growers and processors, showed the industry faces uncertainty and unanswered questions amid conflicting federal drug regulations and lack of clear federal rules.
“There are lots of concerns and questions and always will be,” said Tony Cortilet, supervisor of the state’s hemp program.
Minnesota has a five-year history in growing industrial hemp under a pilot program. But since going nationwide under the farm bill, the U.S. Department of Agriculture has been scrambling to write regulations for the new industry.
USDA recently posted interim rules that will last for two years but could be revised sooner. Some of those federal rules are causing concerns for growers and processors.
One rule is on how and when hemp crops on farms are tested for THC, the chemical that causes a high in marijuana. Industrial hemp can’t contain more than 0.3% THC. The new USDA rules say the state must test all hemp plants within 15 days from the time they are harvested, while the state has in the past allowed a 30-day window.
“For us, it will be very hard to do that,” Whitney Place, assistant commissioner at MDA, told the audience about the 15-day rule. MDA has about eight inspectors to test plants from this year’s 333 growers, who planted 8,000 acres of hemp.
MDA can only fund inspectors through the fee they charge growers, which is now $400 for an inspection. If they hire more inspectors, those fees for farmers will rise. And a 15-day window to test and get lab results back, especially during bad weather, will be a challenge.
Doug Spanier, an attorney with MDA, said tensions between the legal hemp industry and the federal Drug Enforcement Administration are also continuing to raise many questions. While industrial hemp is officially legal, the DEA still treats higher THC levels as a controlled substance.
One processor at the meeting said that leaves him wondering if he could be considered a criminal by law enforcement. Processors extract various substances from the hemp plant and then blend them to create CBD oil or other products. The processor said that at some points in the process he can have large vats of pure THC. That might be disposed of or processed into products that are below the legal 0.3% level.
“So am I a felon then?” he asked.
The MDA staff said that at this point law enforcement understand the processors are formulating legal products and haven’t been bothering them. But they also said that the processors have no legal protection if they have what is considered illegally high THC in their possession.
Similarly, growers are worried about what happens if they have hemp plants that test over 0.3% THC. In the past, if tested fields are above the limit, the grower was required to destroy the crop and provide photos and details to show the state the crop was destroyed.
The new USDA rules, however, require law enforcement or a DEA-certified company to destroy those crops, something farmers would have to pay for.
And the USDA rules say that if growers go above 0.5% THC within three years, they will be barred from growing hemp for five years.
Some growers said that was unfair because they buy seed they are told are from low THC plants that in fact may not be. And there is evidence that soil types and different fertilizers can raise THC.
Some growers who are trying to experiment and breed hemp plants that are low in THC but high in CBD content said they plant many types of hemp plants, some of which go over the 0.5% limit that would put them at risk of losing their license to grow for five years.
“It sounds like you’re giving growers an uphill battle,” said one farmer.
One bright spot, said the MDA staff, is that Minnesota growers have done well in staying under the 0.3% level. Just 12% of the fields tested were above the level and had to be destroyed. In some states the failure rate has been 40%.
The MDA officials encouraged those in the industry to make comments on the USDA hemp rules website as the rules for the hemp industry are being finalized.