Hemp Producers, Rev Your Engines

As we discussed in a prior posting, U.S.-based hemp production took a giant leap forward with passage of the 2018 Farm Bill, which directed USDA to establish a regulatory framework for the production of “hemp” as defined in that law.  USDA had signaled its intent to engage in notice-and-comment rulemaking (proposed rule followed by a comment period and then a final rule) in the Fall of 2019, with the goal of having a framework in place for the 2020 planting season – see here.  Evidently, the agency is now having second thoughts about that strategy and the associated delays.  The latest unified regulatory agenda states that USDA intends to issue an interim final rule (IFR) in August 2019 – see here.  

Essentially, an IFR is a rule issued without notice-and-comment that can be made effective upon publication.  The issuing agency can then modify the rule based on comments received after the rule’s issuance.  Absent Congressional authority to issue an IFR, an agency that wishes to do so must find “good cause” – meaning that adherence to the notice-and-comment rulemaking procedures otherwise mandated under the Administrative Procedure Act would be impracticable, unnecessary, or contrary to the public interest.  Such a finding is subject to judicial review, and judges tend to construe the “good cause” exception narrowly.  At this point, it’s not clear that any parties with a stake in the future of hemp production would be willing to challenge the validity of USDA’s presumptive finding of good cause to issue an IFR.  Absent such a challenge, it’s conceivable that USDA’s framework could be in place in the Fall of 2019 – at lightning speed in the world of rulemaking. 

In the interim, USDA is advising stakeholders that “all rules and restrictions must be followed per Section 7606 of the 2014 Farm Bill. In other words, no one should try to implement the 2018 Farm Bill production provisions before the final USDA rule is established. USDA cannot help with interpretation and implementation of the laws related to your state permitting and interstate commerce.  For those questions, please seek advice from your legal counsel or state.”