Uncertainty has hindered the hemp industry as state authorities confronted the question of whether hemp could be transported in interstate commerce. Amid the uncertainty, shipments of hemp have been seized and drivers prosecuted as various state authorities applied divergent interpretations of the 2018 Farm Bill. Among other things, the bill’s provisions removed industrial hemp from the Controlled Substance Act and provided for the interstate transport of lawfully produced hemp.
Recently, a timely legal opinion issued by the Department of Agriculture’s Office of the General Counsel clarified that it is, in fact, legal to transport lawfully produced hemp and, therefore, state agencies are prohibited from interfering with shipments crossing state lines. The key here is that any hemp transported across state lines must have been lawfully produced. Essentially, that means the hemp must have been cultivated as part of a 2014 authorized industrial hemp program or it must be hemp produced under a USDA regulated license plan. Even though the 2018 Farm Bill provided for USDA regulated plans, the USDA must first publish regulations implementing the new hemp production provisions.
As new regulated plans are implemented, the States remain free to prohibit the production of hemp, but they must allow it to be transported through their jurisdictions provided that the goods meet the criteria of “lawfully produced” hemp. A case pending before the Ninth Circuit underscores the importance of the definition “lawfully produced.” In that case, Big Sky Scientific, LLC sued Idaho Police et al., for the return of 7,000 pounds of hemp produced under the Oregon industrial hemp program. Unfortunately, the lower district court concluded that the hemp was not “lawfully produced” because the USDA had not yet issued regulations. Therefore, according to the district court of Idaho, the hemp was not properly defined as “lawfully produced.” In so concluding, the court disregarded the fact the hemp was produced under Oregon’s hemp program which was authorized by the 2014 Farm Bill.
Because the transport of industrial hemp has been fraught with legal risk, this week’s USDA opinion should help alleviate some legal concerns for those shipping lawfully produced hemp across state lines. Moreover, the opinion provides much-needed guidance to our courts and law enforcement agencies. Stakeholders in the industry should note that the shipment of hemp is still unlawful unless the hemp was produced in compliance with an industrial hemp program authorized under the 2014 Farm Bill. Other hemp producers hoping to ship industrial hemp across state lines will need to wait for the USDA to issue regulations and obtain a license under one of the new USDA regulated hemp programs. The USDA has stated that it intends to issue regulations this year.