USDA’s Final Rule for Hemp Effective; Uncertainty Remains for NC’s Program

— Written By

3/21/2021

Introduction

In January 2021 the USDA published the final hemp rule that regulates hemp production, and is set to become effective on March 22, 2021. There were a number of significant updates in the final rule. You can read more about them here.

Under federal law, hemp pilot programs authorized by the 2014 Farm Bill are allowed to continue until January 2022. So for the 2021 growing season, license holders in NC can continue to operate under their current license. However, it is still not certain what will happen after this date.

The USDA’s final rule permits states and tribal nations to proceed along one of two paths:

  • Submit a state or tribal plan to the USDA for approval. In this case, the NCDA&CS would still be responsible for regulating hemp production in NC

OR

  • Tell the USDA that they do not intend to submit a state or tribal plan, in which case growers from that state or tribal nation may apply to USDA directly for a license

Issue: NCDA&CS is not able to submit a state plan

North Carolina is in a unique legal position (or quandary). As mentioned above, one of the paths forward is for the state to submit a plan to USDA for approval. However, the North Carolina Department of Agriculture and Consumer Services (NCDA&CS), the agency that would be responsible for doing this, does not currently have the legal authority to submit a state plan. This needs to come from the North Carolina General Assembly (GA).

There was a bill that was introduced in the GA in 2019 that would have given NCDA&CS this authority. However, it wasn’t passed until June 2020, at which time the relevant provisions were stripped out of the bill before it was passed. (See here for more information.)

So, as of today, it looks likely that when the NC pilot program expires all of the growers in NC who want to continue to grow hemp will need to follow the USDA’s plan, and apply for a license from USDA. When the pilot program expires, the licenses issued under the pilot program will expire (and there are upwards of 1,500 licensees in NC right now). The NC Industrial Hemp Commission will also be dissolved.

*Important note: it’s too early for NC growers to apply to USDA for a license. If growers apply to the USDA right now they will likely be denied and referred back to NCDA&CS. Since the NC pilot program is still in effect, anyone who has a license currently can still grow under that license for the 2021 season. For anyone who wants to grow this season but doesn’t have a license, you can still apply for one from NCDA&CS – but be aware that it will only be valid for a short time.

Questions

We will continue to provide information about this transition as it becomes available. In the meantime, if you have questions, you can reach the NC State Extension Hemp team at industrialhemp@ncsu.edu. You can reach NCDA&CS at mailto:IndustrialHempRequests@NCagr.gov

Please do NOT submit questions as a “comment” to this post, as we are unable to respond to questions submitted in this format.

This post was written on March 21, 2021.