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USDA Rules Delayed - New York Gets Another Year

In a last-minute funding bill to prevent a government shutdown, hemp farmers in New York get a break. Implementation of USDA Interim Final is delayed until September 30th, 2021. It is not yet clear whether New York State will decide to continue its pilot program for another year, or not.

New York Declined to Submit a USDA Plan

In August, over 500 hemp growers received a letter the NYS Department of Agriculture and Markets explaining that their license to grow will expire on November 1st and that they will need to apply directly to the USDA in order to continue growing.

In the letter, Commissioner Richard Ball explained that the Interim Final Rule, which imposes strict guidelines for states to regulate the production of hemp, was un-workable and "contrary to Congress' objective of stimulating the industry". In comments to the USDA early this year, Ball pointed to six specific issues, echoed by industry groups, that needed to be addressed:

1) Sampling only the flower material where THC is highest.

2) Requirement to sample every "lot", or field, of hemp.

3) The short 15-day harvest testing window.

4) Loose definitions of who can collect samples and how samples should be homogenized.

5) Strict requirement to dispose of "hot" plants.

6) Costly reporting requirements.

Because the USDA failed to address any of these issues, along with looming budget cuts, Commissioner Ball asked the agency to delay their implementation for another year or else New York would not submit a plan.

New York Industry Leaders Call for a Delay

Recognizing that the sudden change of oversight to the federal government could spell disaster for hemp growers across the State, the New York Cannabis Growers & Processors Association (NYCGPA) called on lawmakers to act.

In order to buy more time for legislation or further revisions to the rule, the NYCGPA worked with state and federal representatives to push for an extension. Such extension would keep the "Pilot Program", originally established in 2016, to continue for another season. For many hemp growers, the strict new rules would push profitability out of reach and make growing the new crop not worth the hassle or risk.

Senator Schumer Steps-Up for the Industry

Working closely with the NYCGPA, Senator Chuck Schumer worried that the increased burden on farmers would add insult to injury after the global pandemic decimated supply chains. In early August, the Senate Minority Leader wrote to USDA Secretary Sonny Purdue sharing the concerns of New York's hemp industry and asking him to delay implementation of the Interim Final Rules.

Senator Schumer with CEO Kaelan Castetter in 2018

Realizing that only an Act of Congress would successfully result in the delay, the Senator began working with House lawmakers to include such a provision into a stop-gap funding bill intended to keep the federal government open. At 5:17pm, less than seven hours before the midnight deadline, the US Senate passed the funding bill with language to delay the USDA's hemp rules for another year.

Notably absent from the efforts has been Senate Majority Leader Mitch McConnell, despite making hemp a key piece of his campaign platform. His home state of Kentucky has yet to receive approval for their plan.

What's Next for NY Growers?

Many growers have already submitted applications to the USDA and it is unclear if those will still be processed. USDA officials had communicated previously that the applications would not be approved until New York's pilot program officially ended on November 1st.

In Commissioner Ball's August letter to hemp growers, he promised that New York would consider re-submitting a plan if requirements were modified. We can assume the Department of Agriculture & Markets will jump at the opportunity to regulate hemp growers for another year and provide further certainty for the budding industry.

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