Category Archives: Crop Issues

What’s the “dirt” on organic hydroponics?

Written by Ellen Essman

The Center for Food Safety (CFC), along with other groups and a number of organic farms, filed a lawsuit early this month claiming that USDA violated the Organic Foods Production Act (OFPA) when it allowed hydroponically-grown crops to bear the “Certified Organic” label.  In January 2019, CFC filed a legal petition asking USDA to create regulations which would ban hydroponic operations from using the organic label.  USDA denied the petition, and CFC’s current lawsuit also alleges that USDA’s denial violated the Administrative Procedure Act (APA).  CFC asks the U.S. District Court for the Northern District of California to vacate USDA’s denial of their petition and to bar the agency from certifying any hydroponic operations as organic.  The complaint can be found here.

What do “hydroponic” and “organic” mean anyway?

Many of you are probably familiar with hydroponic and organic growing, but since the terms are very important in this lawsuit, it’s worth reviewing them before we continue.

The USDA, on its National Agricultural Library website, defines “hydroponics” as “growing plants in a nutrient solution root medium.” In other words, hydroponic plants can be grown in mediums such as sand, gravel, and water with additional nutrients.  Simply put, hydroponic plants are not grown in the soil.

OFPA (available here) says in order to sell or label an agricultural product as “organically produced,” the product must:  1) have been produced and handled without the use of synthetic chemicals, except as otherwise provided; (2) except as otherwise provided in this chapter and excluding livestock, not be produced on land to which any prohibited substances, including synthetic chemicals, have been applied during the 3 years immediately preceding the harvest of the agricultural products; and (3) be produced and handled in compliance with an organic plan agreed to by the producer and handler of such product and the certifying agent.  Thus, for a plant to be “organic,” it must meet these criteria.

CFC’s argument under OFPA

In their lawsuit, CFC is principally concerned with the third part of the organic requirements listed above—that in order to be labeled as organic, an agricultural product must be “produced and handled in compliance with an organic plan.” Organic plans, in turn, must also meet a number of requirements.  One of those requirements is that the “organic plan shall contain provisions designed to foster soil fertility, primarily through the management of the organic content of the soil through proper tillage, crop rotation, and manuring.” At its most basic, CFC’s argument is that fostering soil fertility is an integral and required part of the OFPA, and therefore, plants not grown in actual soil cannot meet all the requirements necessary for organic certification.  In other words, since hydroponics by definition are not grown in soil, hydroponic farmers can’t foster soil fertility.  As a result, CFC maintains that since fostering soil fertility is required in order for plants to be labeled “organic,” hydroponically-grown plants can’t be organic.  By allowing hydroponics to be labeled organic, CFC asserts that USDA is in violation of the OFPA.

CFC’s argument under the APA

The plaintiffs also contend that USDA’s denial of their 2019 petition violated the APA. The APA (you can find the relevant chapter here) is the law that federal agencies must follow when writing and adopting regulations.  Under the APA, courts have the power to overturn agency actions if they are arbitrary, capricious, an abuse of discretion, or are otherwise unlawful.  Additionally, courts can overturn agency actions when they go beyond the authority given to the agency by Congress.  Here, CFC argues that USDA’s denial of their petition was arbitrary and capricious and not in accordance with the law.  Basically, they are arguing that USDA violated the APA by ignoring the soil fertility language that Congress included in OFPA.

What’s USDA’s take?

USDA’s denial of CFC’s petition gives us a little insight into what the agency’s response to the lawsuit might include.  The agency claims that the National Organic Program (NOP) has allowed hydroponic operations to be certified organic in the past.  Furthermore, USDA counters that the statutory and regulatory provisions that refer to “soil” do not require every organic plant to be grown in soil.  Instead, they say the provisions are simply “applicable to production systems that do use soil.”

The court will certainly have a lot to sift through in this lawsuit.  USDA still has to respond to the complaint, and hydroponic operations might throw their support behind the agency’s cause.  We’ll be keeping an eye on what happens and will make sure to keep you updated!

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Peach farm wins big in dicamba case against Monsanto and BASF

Valentine’s Day brought a sweet reward to Bader Farms, a peach farm in Missouri that claimed that dicamba products by Monsanto/Bayer and BASF drifted onto its property and injured 20,000 of its peach trees over 700 acres.  A federal jury agreed and awarded the farm $15 million in compensatory damages.  The following day, the jury gave the farm another $250 million in punitive damages against Bayer and BASF, bringing the total award to $265 million.

In 2016, Bader Farms was the first to file a dicamba drift lawsuit against Monsanto.  A summary of the lawsuit from our partner, the National Agricultural Law Center, explains that the farm’s claim alleged widespread damage to the peach orchards and a multi-million dollar financial loss. At the center of Bader Farms’ original complaint was Monsanto’s genetically modified Roundup Ready 2 Xtend soybeans and Bollgard II Xtend cotton seeds (“Xtend crops”), dicamba-resistant seeds that Bader Farms alleged were released without an accompanying EPA-approved dicamba herbicide in 2015 and 2016. The farm argued that by selling the Xtend crop seeds without a corresponding herbicide, it was foreseeable to Monsanto that farmers would use old, highly volatile, drift-prone dicamba that had a strong chance of damaging neighboring crops.

Bader Farms later added BASF as a defendant to the case and also added new complaints for dicamba-related damage it suffered during the 2017 growing season. Bader Farms stated that Monsanto and BASF had worked together to manufacture, market, and sell dicamba-based products that they knew would cause harm.

The jury in the federal lawsuit ruled in favor of Bader Farms on all counts.  Specifically, the jury concluded that Monsanto was negligent by releasing dicamba-tolerant seeds before releasing the herbicide.  The jury also determined that both Monsanto and BASF were negligent because they issued new dicamba products that drifted off-target although the companies claimed that the products were less likely to drift.  Important to the punitive damage award, the jury found that Monsanto and BASF had engaged in a “conspiracy to create an ecological disaster to increase profits.”

The Bader Farms case is the first of many dicamba-based cases against Monsanto/Bayer and BASF, combined last year into Multi-District Litigation involving both a Crop Damage Class Action Master Complaint and a Master Antitrust Action Complaint.  For an excellent review of the dicamba cases, see the National Agricultural Law Center’s series on “The Deal with Dicamba,” available at https://nationalaglawcenter.org/the-deal-with-dicamba-part-three/.

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Is the third time the charm for Farmer Fair Practice Rules?

Written by Ellen Essman

A new rule proposed by the USDA Agricultural Marketing Service (AMS) covers a topic that has been up in the air for more than a decade.  The 2008 Farm Bill called on the Secretary of Agriculture to create regulations meant to guide the USDA in determining whether or not a packer, swine contractor, or live poultry dealer gave a person or locality “any undue or unreasonable preference or advantage” when purchasing livestock and meat products. The Secretary of Agriculture entrusted the rulemaking to USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA).  GIPSA did propose versions of the rule in 2010 and 2016, but neither ever went into effect due to congressional prohibitions on such rulemaking and a presidential transition, respectively. (The anticipated regulations have long been referred to as the “Farmer Fair Practice Rules.”) Once Trump came into office, his administration did away with GIPSA and gave its responsibilities to AMS, further delaying the rulemaking.

After all this time, what does AMS propose for the Farmer Fair Practice Rules?  On January 13, AMS published its proposed rule in the Federal Register.  AMS would add a section to the Packers & Stockyards regulations, which would allow the Secretary of Agriculture to “consider one or more criteria” when deciding whether a packer, swine contractor, or live poultry dealer unfairly favored any person or locality over another in their dealings.  AMS developed four criteria to be considered when determining whether a packer, contractor, or dealer’s actions were unfair.  Actions would be deemed unfair when they:

  • Cannot be justified on the basis of cost savings related to dealing with different producers, sellers, or growers;
  • Cannot be justified on the basis of meeting a competitor’s prices;
  • Cannot be justified on the basis of meeting other terms offered by a competitor; and
  • Cannot be justified as a reasonable business decision that would be customary in the industry.

In the rulemaking, AMS provides several examples of fair and unfair practices. AMS also emphasizes several times that the Secretary of Agriculture would not be limited to considering just those four criteria when making a decision, as each situation is unique.  In essence, the proposed language is meant to guide the Secretary’s thinking when making a determination about whether or not an action is unfair.

If you would like to read more about this proposed rule it is available in its entirety here.  Information about submitting comments on the rule is available at the same link.  Comments on the rule may be submitted up until March, 13, 2020.  Will this version of the elusive Farmer Fair Practice Rules finally stick?  We will have to wait and see.

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Ohio Ag Law Blog–New fact sheet describes how to prepare for a crop insurance audit

Written by Ellen Essman

With 2019’s ups and downs in the weather and the marketplace, it’s likely that many farmers used the Federal Crop Insurance Program to mitigate their losses.  Those farmers whose crop insurance claims reach $200,000 or more will be audited by the USDA’s Risk Management Agency.

What’s the purpose of an audit—does it mean you’re in trouble with the government? What can you expect when going through the audit process?  How do you prepare for an audit? What kind of records and documentation do you need?  All of these questions and more are answered in a new fact sheet we recently published through our partnership with the National Agricultural Law Center.  Click here to read the fact sheet to better prepare you for going through an audit.

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What’s on our Christmas wish list? More written farmland leases in 2020

Christmas is a good time to make wishes for the peace and well-being of others.  One of our top wishes this year does that:  we hope for all Ohio farmers to have written farmland leases.  It’s an odd wish, we know.  But putting leases in writing can help landowners and farm tenants live in peace, and we like that.

Farm leases have always been prone to being verbal agreements, sealed with a handshake.  Simplicity and trust are two plausible reasons we’ve done business that way.  But a written farm lease can be simple, and using one doesn’t have to mean that the parties don’t trust each another.  Instead, a lease can keep distrust from arising between the parties by anticipating needs and foreclosing uncertainties and disagreements.

One of the strongest disagreements we hear about verbal farm leases is whether one party can terminate the lease without giving the other much notice of that termination.  For example, if Riley has rented land from Dale every year for the past ten years, can Dale terminate the lease for the 2020 planting season in February of 2020?  What if Riley has already purchased inputs, added nutrients, or planted a cover crop?  Or perhaps Dale passes away at the end of the year.  Will Riley lose the lease if Dale’s children sell the land before planting season begins?  These are the uncertainties that can lead to fighting, distrust, and sometimes, costly and difficult litigation.

A written farmland lease can prevent these uncertainties that can arise with verbal leases.  A written lease can state how much notice is required in order for one party to terminate the lease.  It can address other potentially problematic issues, such as who repairs drainage tiles, fences and access points, how to address new subsurface drainage and soil fertility needs, and whether and how to adjust annual lease rental rates.  When an issue or question about the arrangement develops, the written farm lease can provide the already agreed-upon answer or solution.

When it comes to the peace and well-being of farmers, written farmland leases are a good thing to wish for.  So let’s keep the Grinch of uncertainty from showing up in 2020, and put those farmland leases in writing.   For our resources on what to include in a written farm lease, how to create an enforceable lease, and other farm lease needs, please visit this page.

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USDA rolls out its hemp rule: is Ohio ready?

By Peggy Kirk Hall and Ellen Essman

Legalized hemp production in the U.S. took a major step forward today with the publication of the USDA’s rule establishing the “U.S. Domestic Hemp Production Program.”    States and potential hemp growers have been awaiting this rule since the Farm Bill legalized hemp back in December 2018 but required that regulatory programs be established for overseeing hemp production.  Today’s hemp rule sets up the regulatory framework for state departments of agriculture, Indian tribal governments and the USDA to license producers who want to grow hemp as a commodity crop.

What’s in the hemp rule?

The hemp rule lays out the requirements for establishing hemp production programs within State or Tribal governments and creates a USDA administered licensing program for producers in areas that choose not to regulate hemp production.  Other parts of the rule include definitions, appeal provisions, and reporting requirements.  The rule also addresses the interstate transportation of hemp.  Here’s a quick summary of provisions that affect Ohioans.

Requirements for State and Tribal Hemp Production Plans.    A State or Tribe must include the following in a Hemp Production Plan that the USDA must approve before the State or Tribe can allow hemp production within its borders:

  • Plans to maintain relevant producer and land information. A state must collect, maintain and provide USDA with contact and location information for each licensed hemp producer, including personal information about the individual or business and location information about the land where hemp is produced.
  • Plans for accurate and effective sampling and testing. A plan must include procedures for collecting hemp flower samples; conducting sampling and testing of plants 15 days prior to any harvest; ensuring that sampling methods are reliable and represent a homogeneous composition of the sampling area; preventing commingling of plants from different sampling areas; requiring that producers are present during sampling; and allowing samplers to have unrestricted access to hemp plants and all land and facilities used for cultivating or handling hemp.
  • Procedures to accurately test THC levels in samples. The rule lays out suggested reliable testing methods but does not establish a single, national testing procedure for determining whether a hemp plant falls beneath the 0.3 threshold for THC, the psychoactive ingredient that distinguishes hemp from marijuana.  However, a State or Tribe must use a testing lab that is registered with the Drug Enforcement Agency and must require the lab to follow testing performance standards.  The standards must include evaluation of “measurement of uncertainty,” a concept similar to determining the margin of error, and must account for the uncertainty in THC test results.
  • Procedures for disposal of non-compliant plants. A State or Tribal plan must prohibit any handling, processing, or entering the stream of commerce of any hemp grown in an area that exceeds the acceptable THC level and must have procedures for disposing of the plants, verifying disposal, and notifying USDA of non-compliant plants, including provision of test results to USDA.
  • Inspection procedures. A plan must include procedures for annual inspections of random samples of licensed producers.
  • Reporting procedures. A plan must explain how a State or Tribe will submit all of the information and reports required by the rule, which includes monthly producer reports, monthly hemp disposal reports, and annual reports of total planted, harvested, and disposed acreage.  The plan must also require producers to report crop acreage to the Farm Service Agency.
  • Corrective action plans. A required corrected action plan will address procedures for allowing producers to correct negligent regulatory violations such as failing to provide a legal description, failing to obtain a license, and exceeding the THC level.  The procedures must include a reasonable compliance date, reporting by the producer for two years after a violation, five years of ineligibility for producers with three negligence violations with a five-year period, and inspections to ensure implementation of corrective action plans.
  • Enforcement for culpable violations. A plan must have procedures for reporting any intentional, knowing, willful or reckless violations made by producers to the U.S. Attorney General and chief law enforcement officers of the State or Tribe.
  • Procedures for addressing felonies and false information. The plan must not allow a producer with a felony conviction relating to controlled substances to be eligible for a hemp license for a period of ten years from the felony conviction, and must prohibit a producer who materially falsifies information on an application to be ineligible for a license.

Plan review by USDA.  The rule states that after a State or Tribe submits a hemp plan, USDA has 60 days to approve or deny the plan.  The rule also allows USDA to audit approved state plans at least every three years.

Interstate commerce of hemp.  The rule reiterates an important provision first mentioned in the 2018 Farm Bill: that no state can prohibit transportation of hemp or hemp products lawfully produced under an approved state plan or a USDA license.

USDA issued licenses.  A producer in a state that chooses not to regulate hemp production may apply to the USDA for a license to cultivate hemp.  The USDA’s sets forth its licensing program requirements in the rule, which are similar to provisions for State and Tribal Hemp Production Plans.

Effective date:  today

It’s important to note that the USDA published the rule as an “interim final rule” that becomes effective upon its publication in the Federal Register, which is today, October 31, 2019.  Federal law allows an agency to forego the typical “notice and comment” period of rulemaking and publish a final rule if there is good cause for doing so.  USDA explains that good cause exists due to Congress’s interest in expeditious development of domestic hemp production, critically needed guidance to stakeholders who’ve awaited publication of the hemp rule, previous outreach efforts, and the public’s interest in engaging in a new and promising economic endeavor.  The immediacy of USDA’s rule allows the agency to begin reviewing State and Tribal Hemp Production Plans now, in hopes that producers will be able to plant hemp for the 2020 growing season.   USDA is seeking public input on the interim final rule for the next sixty days, however, and plans to consider such comments when it replaces the interim final rule with a “final rule” in two years time.

Is Ohio ready?

While Ohio’s Department of Agriculture (ODA) won’t be the first in line to have its hemp production program reviewed under the new USDA program, Ohio won’t be too far behind the twenty states and tribes that are already awaiting review.   ODA proposed Ohio’s hemp regulations earlier this month after the General Assembly decriminalized hemp and authorized the agency to develop a hemp program in July of this year via Senate Bill 57.  The USDA rule comes just one day after ODA closed the comment period on the proposed rules, which we summarize here.  Once ODA publishes the final hemp regulations, it can proceed to submit Ohio’s Hemp Production Plan to the USDA for approval.  Ohio’s timing may prove beneficial, as ODA now has the opportunity to review the USDA rule and ensure that Ohio’s plan will meet the federal requirements.

Our comparison of Ohio’s hemp laws and regulations to the USDA’s hemp rule indicates that Ohio is well prepared to meet the hemp rule requirements.  Only a few provisions in the federal rule may require additional attention by Ohio before ODA submits its plan for USDA approval.  Key among those are procedures for THC testing methods (technical details not included in Ohio’s proposed regulations) and procedures for corrective action plans (which are not clearly laid out in the proposed regulations but are addressed in Senate Bill 57).  One potential conflict between the federal and Ohio rules regards destruction of hemp plants that exceed the allowable 0.3 THC level.  The federal rule prohibits any further handling, processing or entering into the stream of commerce of any hemp plants from the sampling area and requires disposal of non-compliant plants, while Ohio’s regulations allow bare hemp stalks for fiber that is free of leaf, seed and floral material to be harvested, processed and used while all other material from plants that exceed 0.3 THC must be destroyed.    We’ll soon see how ODA handles these and other issues when it submits Ohio’s Hemp Production Plan for USDA approval.

Read the interim final rule on “Establishment of a Domestic Hemp Production Program” here, which is also the site for submitting comments on the rule.  USDA will accept public comments until December 30, 2019.

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Ohio’s proposed hemp rules are out

By Peggy Kirk Hall and Ellen Essman

Ohio’s newly created hemp program is one step further toward getting off the ground.  On October 9, the Ohio Department of Agriculture (ODA) released its anxiously awaited proposal of the rules that will regulate hemp production in Ohio.   ODA seeks public comments on the proposed regulations until October 30, 2019.

There are two parts to the rules package:  one rule for hemp cultivation and another for hemp processing.   Here’s an overview of the components of each rule:

1.  Hemp cultivation

The first rule addresses the “cultivation” of hemp, which means “to plant, water, grow, fertilize, till or harvest a plant or crop.”  Cultivating also includes “possessing or storing a plant or cop on a premises where the plant was cultivated until transported to the first point of sale.”  The proposal lays out the following regulatory process for those who wish to cultivate hemp in Ohio.

Cultivation licenses.  Anyone who wants to grow hemp must receive a hemp cultivation license from the ODA.  Licenses are valid for three years.  To obtain a license, the would-be hemp cultivator must submit an application during the application window, which will be between November 1 and March 31.  The application requires the applicant to provide personal information about the applicant, and if the applicant is a business, information about who is authorized to sign on behalf of the business, who will be primarily responsible for hemp operations and the identity of those having a financial interest greater than ten percent in the entity.    The cultivation license application will also seek information about each location where hemp will be grown, including the GPS coordinates, physical address, number of outdoor acres or indoor square footage, and maps of each field, greenhouse, building or storage facility where hemp will grow or be stored.  Cultivators must pay a license application fee of $100, and once licensed, an additional license fee of $500 for each growing location, which the rule defines as “a contiguous land area or single building in which hemp is grown or planned to be grown.”  All applicants and anyone with a controlling interest  in the hemp cultivation business must also submit to a criminal records check by the bureau of criminal identification and investigation.

Land use restrictions.  The proposed rules state that a licensed hemp cultivator shall not:

  • Plant or grow cannabis that is not hemp.
  • Plant or grow hemp on any site not approved by the ODA.
  • Plant, grow, handle or store hemp in or within 100 feet of a residential structure or 500 feet of a school or public park, unless for approved research.
  • Co-mingle hemp with other crops without prior approval from ODA.
  • Plant or grow hemp outdoors on less than one-quarter acre, indoors on less than 1,000 square feet, or in a quantity of less than 1,000 plants without prior approval from ODA.
  • Plant or grow hemp within half a mile of a parcel licensed for medical marijuana cultivation.
  • Plant or grow hemp on property that the license holder does not own or lease.

Hemp harvesting.  Licensed growers would be required to submit a report to ODA at least 15 days before their intended harvest date and pay a pre-harvest sample fee of $150.  ODA then has to sample the hemp for THC content, and only if approved can a cultivator harvest the crop, which in most cases must occur within 15 days after the sample is taken.  Failing to harvest within the 15-day window might require a secondary sampling and sampling fee.  A cultivator would be required to have a hemp release form from ODA before moving any harvested materials beyond the storage facility.

Random sampling.  The proposed rules also allow for random sampling of hemp by ODA and provide details on how ODA will conduct the sampling and charge sampling fees.  Any cultivator is subject to random sampling in each location where hemp has been cultivated. ODA will report testing results that exceed 0.3 THC to the cultivator, who may request a second sample.  A cultivator must follow procedures for destroying any leaf, seed, or floral material from plants that exceed 0.3 THC and any material that was co-mingled with the 0.3 THC materials, but may harvest bare hemp stalks for fiber.

Destruction of hemp.   Under the proposed regulations, a license holder must submit a destruction report before destroying hemp and ODA must be present to witness the destruction.  The proposed rules also authorize ODA to destroy a crop that was ordered destroyed, abandoned, or otherwise not harvested and assess the costs against the licensee.

Reporting and recordkeeping are also important in the proposed rules.  Licensed cultivators must submit a planting report on an ODA form for each growing location by July 1 or within 15 days of planting or replanting, which shall include the crop’s location, number of acres or square footage, variety name, and primary intended use.  The rule would also require licensees to submit a completed production report by December 31 of each year.    A licensee that fails to submit the required reports would be subject to penalties and fines. Cultivators must maintain planting, harvest, destruction and production reports for three years.

Control of volunteer plants.  A licensee must scout and monitor unused fields for volunteer hemp plants and destroy the plants for a period of three years past the last date of reported planting.  Failing to do so can result in enforcement action or destruction of the plants by ODA with costs assessed to the licensee.

Pesticide and fertilizer use.  The laws and rules that apply to other crops will also apply to hemp, except that when using a pesticide on a site where hemp will be planted, the cultivator must comply with the longest of any planting restriction interval on the product label.   ODA may perform pesticide testing randomly, and any hemp seeds, plants and materials that exceed federal pesticide residue tolerances will be subject to forfeiture or destruction without compensation.

Prohibited varieties.  The proposed rule states that licensed cultivators cannot use any part of a hemp plant that ODA has listed as a prohibited variety of hemp on its website.

Clone and seed production.  Special rules apply to hemp cultivators who plan to produce clones, cuttings, propagules, and seed for propagation purposes.  The cultivator can only sell the seeds or plants to other licensed cultivators and must maintain records on the variety, strain and certificate of analysis for the “mother plants.”  The licensee need not submit a harvest report, but must keep sales records for three years of the purchaser, date of sale, and variety and number of plants or seeds purchased.

Cultivation research.  Universities may research hemp cultivation without a license but private and non-profit entities that want to conduct research must have a cultivation license.  Cultivation research licensees would be exempt from many parts of the proposed rules, but must not sell or transfer any part of the plants and must destroy the plants when the research ends.

Enforcement.  The proposed rule grants authority to the ODA to deny, suspend or revoke cultivation licenses for those who’ve provide false or misleading information, haven’t completed a background check, plead guilty to a felony relating to controlled substances within the past 10 years, or violated the hemp laws and rules three or more times in a five-year period.

2.  Hemp processing

The proposed rules package by ODA also addresses processing, which the rule defines as “converting hemp into a hemp product” but does not include on-farm drying or dehydrating of raw hemp materials by a licensed hemp cultivator for sale directly to a licensed hemp processor.    Because of this definition, many farmers who want only to grow and dry hemp would need only a cultivation license.  Growers who want to process their licensed hemp into CBD oil or other products, however, must also obtain a processing license.  The processing rules follow a similar pattern to their cultivation counterpart, as follows.

Processing licensesIn addition to submitting the same personal, business and location information as a cultivation license requires, a hemp processing license application must list the types of hemp products that the processor plans to produce.   An “extraction operational plan” including safety measures and guidelines is required for processors who want to extract CBD from hemp to produce their product, and an applicant must indicate compliance with all building, fire, safety and zoning requirements.  The amount of the license fee depends on what part of the hemp plant the processor plans to process.  Processing raw hemp fiber, for example, requires a $500 license fee for each processing site, whereas processing the raw floral component of hemp requires a $3000 fee for each site.  Like the cultivation license, a processing license is valid for three years.  Applicants and those with a controlling interest in the business must submit to a background check.

Land use restrictions.  The proposed regulations would prevent a licensed processor from:

  • Processing or storing any cannabis that is not hemp.
  • Processing or storing hemp or hemp products on any site not approved by ODA.
  • Processing, handling, or storing hemp or hemp products in or adjacent to a personal residence or in any structure used for residential use or on land zoned for residential use.
  • Processing hemp within 500 feet of a school or public park, except for approved research.

Financial responsibility.    A licensed processor must meet standards of financial responsibility, which require having current assets at least $10,000 or five percent of the total purchase of raw hemp materials in the previous calendar year, whichever is greater, and possessing a surety bond.

Inspection and sampling.  As with cultivation licensees, hemp processing licensees would be subject to inspection and sampling by ODA under the proposed rule.

Food safety regulations.  The proposed rule requires hemp processes to comply with federal and state food safety regulations.

Sources and extraction of cannabinoids (CBD). A processor who wants to extract or sell CBD products must obtain the materials from a licensed or approved cultivator or processor in Ohio or another state with hemp cultivation licenses.  The regulation outlines components of the extraction operational plan that a processor must submit with the processing application, as well as acceptable extraction methods and required training.

Product testing.  A hemp processor must test hemp products at an accredited testing laboratory before selling the products.   The proposed rule describes the testing procedures, which address microbial contaminants, cannabinoid potency, mycotoxins, heavy metals, pesticide and fertilizer residue and residual solvents.  There are testing exemptions, however, for hemp used exclusively for fiber, derived exclusively from hemp seed and hemp extracts.  The testing laboratory must create a certificate of analysis for each batch or lot of the tested hemp product.

Processor waste disposal.  Under the proposed rule, a licensed processor must follow procedures for proper disposal of hemp byproducts and waste and must maintain disposal records.

Product labeling requirements are also proposed in the rule.  A processor must label all hemp products except for those made exclusively from hemp fiber as outlined in the rule and in compliance with federal law and other existing Ohio regulations for standards of identify and food coloring.

Recordkeeping.  As we’d expect, the proposal states that hemp processors must maintain records for five years that relate to the purchase of raw, unprocessed plant materials, the purchase or use of extracted cannabinoids, and the extraction process.

Prohibited products.  Finally, the proposed rules include a list of hemp products that cannot be offered for sale, which includes hemp products with over 0.3 percent THC by dry weight basis, hemp products which laboratory testing determines do not meet standards of identity or that exceed the amount of mytoxins, heavy metals, or pesticides allowed, and any hemp products produced illegally.

What’s next for the hemp rules?

Keep in mind that these rules are not yet set in stone; they are a simply a proposal for hemp licensing rules in Ohio.  Those interested in cultivating or processing hemp in the future should read the draft rules carefully.  The proposed rule for hemp cultivation is here and the proposal for hemp processing is here.  Anyone can submit comments on the proposed rules here.  Your comments could affect what the final hemp rules require for hemp cultivators and processors.  After ODA reviews all comments, it will issue its final hemp licensing regulations.

Federal law requires that after Ohio finalizes its rules, ODA must submit them to the USDA for approval.  That approval won’t occur, however, until USDA completes its own hemp regulations, which are due out in proposal form any day now.  Ohio’s rules will become effective once USDA approves them, hopefully in time for the 2020 planting season.  Stay tuned to the Ag Law Blog to see what happens next with hemp production in Ohio.

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