Appropriations bill urges USDA to modify hemp final rule and enforcement discretion from FDA

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The U.S. Senate Agriculture Appropriations Committee released report language for the appropriations bill that will be negotiated with the U.S. House of Representatives. Two provisions in the report are relevant for hemp farmers and businesses. In one of the provisions, the Senate directs the U.S. Department of Agriculture to modify its Interim Final Rule stating, “a cannabis derivative, extract, or product that exceeds the 0.3% D9-THC limit is a schedule I controlled substance, even if the plant from which it was derived contained 0.3% or less D9-THC on a dry weight basis.”

Industry trade group, including the U.S. Hemp Roundtable, and the Natural Products Association (NPA; Washington, D.C.) sounded the alarm about this rule because of the impact it would have on domestic hemp and CBD industries by placing U.S. companies at a competitive disadvantage to Chinese suppliers.

NPA explained in its comments to the Drug Enforcement Administration, “To extract CBD or other cannabinoids from federally-compliant hemp, the hemp must first go through an extraction process which often causes a temporary increase in the concentration of Delta-9 THC even though the hemp contained less than 0.3 percent or less delta-9 THC on a dry weight basis before the extraction process. Therefore, thebyproduct that is created in an intermediate step will be considered to be a Schedule I substance according to the DEA, even though this by-product would not be sold to consumers in that state…If the facility were to be inspected and a sample was collected from the intermediate step in the extraction process, the firm would be found to have a schedule I controlled substance. This makes it virtually impossible to ensure the hemp from which CBD is extracted will not exceed the 0.3 percent limit. Thus, putting hemp processors in a perpetually non- compliant status with the DEA.”

The Senate Agriculture Appropriations Committee appears to have listened to lobbying efforts, and states in its report, “The Committee is concerned that the interim final rule entitled ‘Establishment of a Domestic Hemp Production Program’ published by the Department of Agriculture in the Federal Register on October 31, 2019 (84 Fed. Reg. 58522) creates roadblocks for farmers by requiring an unrealistic timeframe for testing, the use of Drug Enforcement Administration registered laboratories, the conversion of THCA into THC, a sampling of only flowering tops, and an arbitrary negligence threshold of 0.5 percent. The Committee directs USDA to propose amendments to the interim final rule to ensure that any final rule is based on science and will ensure a fair and reasonable regulatory framework for commercial hemp production in the United States.”

The Senate Agriculture Appropriations Committee also directed FDA to issue a policy of enforcement discretion on CBD within 90 days that would be kept in place until FDA can develop a final regulatory framework. This is another welcome development for the industry, but whether the directive will result in meaningful and broad enforcement discretion remains to be seen. The dominant obstacle remains the current Investigational New Drug applications that are in development. Following its directive for enforcement discretion, the Committee goes on to say, “In addition, the FDA is encouraged to consider existing and ongoing medical research related to CBD that is being undertaken pursuant to an Investigational New Drug application in the development of a regulatory pathway for CBD in products under the jurisdiction of the FDA and to ensure that any future regulatory activity does not discourage the development of new drugs.”