The Ag Law Roundup: your legal questions answered

The summertime slowdown hasn’t affected the number of agricultural law questions we’ve received from across Ohio. Here’s a sampling of recent questions and answers:

Is a tree service business considered “agriculture” for purposes of Ohio rural zoning?

No, tree trimming and tree cutting activities are not listed in the definition of agriculture in Ohio’s rural zoning laws, although the definition does include the growing of timber and ornamental trees. The definition ties to the “agricultural exemption” and activities that are in the “agriculture” definition can be exempt from county and township zoning.  Here is the definition, from Ohio Revised Code sections 303.01 and 519.01:

“agriculture” includes farming; ranching; algaculture meaning the farming of algae; aquaculture; apiculture; horticulture; viticulture; animal husbandry, including, but not limited to, the care and raising of livestock, equine, and fur-bearing animals; poultry husbandry and the production of poultry and poultry products; dairy production; the production of field crops, tobacco, fruits, vegetables, nursery stock, ornamental shrubs, ornamental trees, flowers, sod, or mushrooms; timber; pasturage; any combination of the foregoing; and the processing, drying, storage, and marketing of agricultural products when those activities are conducted in conjunction with, but are secondary to, such husbandry or production.

What are the benefits of being enrolled in the “agricultural district program” in Ohio, and is there a penalty for withdrawing from the program?

There are three benefits to enrolling farmland in the agricultural district program:

1. The first is the nuisance protection it offers a landowner.  A landowner can use the defense the law provides if a neighbor who moves in after the farm was established files a lawsuit claiming the farm is a “nuisance” due to noise, odors, dust, etc.  Successfully raising the defense and showing that the farm meets the legal requirements for being agricultural district land would cause the lawsuit to be dismissed.  
2. The second benefit is that the law also exempts agricultural district land from assessments for water, sewer and electric line service extensions that would cross the land.  As long as the land remains in agricultural district program, the landowner would not be subject to the assessments.  But if the land is changed to another use or the landowner withdraws the land from the agricultural district program, assessments would be due.  The assessment exemption does not apply to a homestead on the farmland, however.
3. A third benefit of the agricultural district program law is that it requires an evaluation at the state level if agricultural district land is subject to an eminent domain action that would affect at least 10 acres or 10% of the land.  In that case, the Director of the Ohio Department of Agriculture must be notified of the eminent domain project and must assess the situation to determine the effect of the eminent domain on agricultural production and program policies.  Both the Director and the Governor may take actions if the eminent domain would create an unreasonably adverse effect.

As for the question about a penalty, the law does allow the county to assess a penalty when a landowner withdraws land from the agricultural district program during the agricultural district enrollment period, which is a five-year period.  If a landowner removes the land from the agricultural district, converts the land to a purpose other than agricultural production or an agricultural conservation program, or sells the land to another landowner who does not elect to continue in the agricultural district program, the landowner must pay a withdrawal penalty.  The amount of the penalty depends on whether the land is also enrolled in the Current Agricultural Use Value program.  See the different penalty calculations in Ohio Revised Code 929.02(D(1).

Read the agricultural district program law in Chapter 929 of the Ohio Revised Code and contact your county auditor to learn about how to enroll in the program.

My farmland is within the village limits and the village sent me a notice that I must cut a strip of tall grass on my land.  Do I have to comply with this?

Yes.  Ohio law allows a municipality such as a village to have vegetation, litter, and “noxious weeds” laws.  These laws can set a maximum limit for the height of grass, require removal of litter on the property, and require ridding the land of “noxious weeds.”  The purpose of the laws is to protect property values, protect public health by preventing pests and nuisances from accumulating, and keep noxious weeds from spreading to other properties.  The village is within its legal authority to enforce its grass, litter, and noxious weeds laws on a farm property that is within the village limits. Failing to comply with an order by the village can result in a fine or  financial responsibility for all expenses incurred by the village to remedy the problem.

Is it legal to pull water from a river or stream to irrigate land in Ohio?

Yes, as long as the withdrawal occurs on private land or with the consent of the public or private landowner.  Registration with the Ohio Department of Natural Resources is required, however, if the amount withdrawn exceeds 10,000 gallons per day and the State has the ability to scale the 10,000 gallon amount back if the withdrawal is within an established groundwater stress area.  Withdrawal registration information is available on the Division of Water Resources website. 

Note that according to Ohio’s “reasonable use” doctrine, if a water withdrawal causes “unreasonable” harm to other water users, a legal action by harmed users could stop or curtail the use or allocate liability for the harm to the person who withdrew the water.  To avoid such problems, a person withdrawing the water should ensure that the withdrawal will not cause “unreasonable” downstream effects.

An urban farmer wants to build a rooftop greenhouse to grow hemp and then wants to make and sell cannabis-infused prepared foods at a market on her property.  Who regulates this industry and where would she go for guidance on legal and regulatory issues for these products?

Regulation and oversight of food products that contain cannabis is a combination of federal and state authority.  Federal regulation is through the U.S. Food and Drug Administration and state regulation is via the Ohio Department of Agriculture’s Food Safety Division.  She should refer to these resources:

• U.S. – https://www.fda.gov/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-including-cannabidiol-cbd#legaltosell
• Ohio – https://agri.ohio.gov/divisions/food-safety/resources/Hemp-Products

As for the growing of hemp, the Ohio Department of Agriculture (ODA) regulates indoor hemp production in Ohio.  There is a minimum acreage requirement for indoor production—she must have at least 1,000 square feet and 1,000 plants.  See these resources from ODA:

• https://agri.ohio.gov/divisions/hemp-program/cultivation. 
• https://agri.ohio.gov/divisions/hemp-program/faqs

She should also look into zoning regulations that could affect her farm market and the greenhouse structure she wants to build.  If she is within a municipality (unlike outside of a municipality in a township or county), there may be zoning regulations that apply to both of these land uses.  And food licensing regulation could come into play.  If she is selling other types of food items along with the cannabis foods, she’ll likely need a Retail Food Establishment (RFE) license from the County Health Department.  See our Law Bulletin for an explanation of when an RFE license is necessary.

Innovative State Approaches to the Hemp Regulations Under the 2018 Farm Bill

Written by Ellen Essman

Our newest report for the National Agricultural Law Center examines the different approaches states are taking to regulate hemp under the 2018 Farm Bill.  Innovative State Approaches to Hemp Regulations under the 2018 Farm Bill is available on our website here and on the National Agricultural Law Center website here.

Over the last few years, the agricultural sector has been buzzing with excitement about the potential of a new crop—industrial hemp.  For years, hemp was increasingly regulated across the country because it was legally classified the same as marijuana, another type of cannabis.

In 1970, the Controlled Substances Act completely illegalized hemp production. This criminalized approach to hemp changed with the 2018 Farm Bill, however, which removed hemp from the definition of “marijuana” and gave states a chance to create their own hemp regulation programs.  Many states seized the opportunity.  As of May 5, 2020, the United States Department of Agriculture (USDA) had approved hemp plans from 16 states:  Delaware, Florida, Georgia, Iowa, Kansas, Louisiana, Montana, Nebraska, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Washington, West Virginia, and Wyoming.

In this white paper, we examine the requirements for state hemp programs prescribed by the 2018 Farm Bill.  Even within these “requirements,” there is room for states to innovate. We’ll take a look at how they’ve done so as we summarize the unique aspects of state hemp programs that go beyond the USDA’s minimum requirements.  There are many creative approaches that states are taking in regulating hemp production. We will touch on some of these notable approaches and highlight the similarities and differences among the approved state hemp regulatory programs.

The USDA’s National Agriculture Library funded our research on this project, which we conducted in partnership with the National Agricultural Law Center.

Live from the Ohio Department of Ag, it’s hemp applications!

Written by Ellen Essman

For months, would-be hemp cultivators and processors in Ohio have been waiting for the Ohio Department of Agriculture (ODA) to announce when applications for licenses would be released.  Well, the wait is over—hemp applications became available online at 12:00 p.m. on March 3, 2020.  Normally, the application window for hemp cultivation would run from November 1-March 31.  Since the program is just getting off the ground this year, the cultivation application window has been extended to May 1, 2020.  Hemp processing applications are accepted at any time.

As was discussed above, there are separate licenses for cultivating, or growing hemp, and for processing harvested hemp.  In other words, being licensed to cultivate hemp would not allow you to process hemp, and vice versa.  In order to apply for either one of the licenses, go to ODA’s hemp program page, available here. Once on that page, go to the “How to Apply for a License” drop-down.  There, ODA walks you through the steps you must follow in order to apply for a license.  First, you must create an OH|ID account.  This account must be in the name of the individual applicant, principal researcher and/or the individual who is authorized to sign on behalf of the business—be that the farm or a processing facility.  An email address and phone number for that person must also be included.  After creating your OH|ID account, sign into it.  After signing in, you can return to ODA’s hemp program page and go back to the “How to Apply for a License” drop-down and click on the link provided that reads “Then click here to apply.”

Keep in mind that if you wish to grow or process hemp, there are detailed rules you must follow, such as getting your sites approved, setback requirements, land use restrictions, and providing ODA with information like GPS coordinates of the land and the number of acres and plants you cultivate, just to name a few. To become licensed, you must also submit to a background check. A fee is required when you apply for a cultivation or processing license, and also annually when you renew your license.  Fees are also required for each type of processing you plan to do and each growing location. After you become licensed, you must allow ODA to inspect your farm or facility and take samples.  You must submit to testing to determine that your hemp or hemp products are at or below 0.3% THC.  Licensed cultivators must also pay fees for sampling and if any THC re-testing is requested.

ODA’s hemp program page also includes a helpful frequently asked questions (FAQs) tab that answers everything from the difference between hemp and marijuana, to how to complete your background check, to how to plant and harvest hemp. If you are interested in growing or processing hemp, you really should read ODA’s hemp page carefully, as there is a lot useful information available there.  For further information, Ohio’s hemp rules are available here. In addition, questions can be addressed by ODA by calling 614-728-2101​, or by emailing hemp@agri.ohio.gov.

The Ohio Ag Law Blog–Ag Law Harvest

Written by Ellen Essman

Hemp, drones, meat labeling and more—there is so much going on in the world of ag law!  With so much happening, we thought we’d treat you to another round of the Harvest before the holidays.

Hemp for the holidays.  As 2020 and the first growing season approach, there has been a flurry of activity surrounding hemp.  States have been amending their rules and submitting them to the USDA for approval in anticipation of next year.  In addition, just last week USDA extended the deadline to comment on the interim final hemp rule from December 30, 2019 to January 29, 2020. If you would like to submit a comment, you can do so here. To get a refresher on the interim rule, see our blog post here.

In other hemp news, EPA announced approval of 10 pesticides for use on industrial hemp.  You can find the list here.  Additional pesticides may be added to the list in the future.

Congress considers a potential food safety fix.  It’s likely that over the last several years, you’ve heard about numerous recalls on leafy greens due to foodborne illnesses.  It has been hypothesized that some of these outbreaks could potentially be the result of produce farms using water located near CAFOs to irrigate their crops.  A bill entitled the “Expanded Food Safety Investigation Act of 2019” has been introduced to tackle this and other potential food safety problems.  If passed, the bill would give FDA the authority to conduct microbial sampling at CAFOs as part of a foodborne illness investigation.  The bill is currently being considered in the Senate Health, Education, Labor, and Pensions Committee.

Animal welfare bill becomes federal law.  In November, the President signed the “Preventing Animal Cruelty and Torture Act” (PACT), into law.  PACT makes it a federal offense to purposely crush, burn, drown, suffocate, impale, or otherwise subject non-human mammals, birds, reptiles, or amphibians to serious bodily injury.  PACT also outlaws creating and distributing video of such animal torture.  The law includes several exceptions, including during customary and normal veterinary, agricultural husbandry, and other animal management practices, as well as during slaughter, hunting, fishing, euthanasia, etc.

No meat labeling law in Arkansas? Last winter, Arkansas passed a law that made it illegal to “misbrand or misrepresent an agricultural product that is edible by humans.” Specifically, it made it illegal to represent a product as meat, beef, pork, etc. if the product is not derived from an animal.  Unsurprisingly, the law did not sit well with companies in the business of making and selling meat substitutes from plants and cells.  In July, The Tofurky Company sued the state in the U.S. District Court for the Eastern District of Arkansas, Central Division, claiming the labeling law violates the First and Fourteenth Amendments, as well as the dormant Commerce Clause. On December 11, the District Court enjoined, or stopped Arkansas from enforcing, the labeling law.  This means that the state will not be able to carry out the law while the District Court considers the constitutionality of the law.  We will be following the ultimate outcome of this lawsuit closely.

Ag wants to be part of the drone conversation. The Senate Committee on Commerce, Science, and Transportation is currently considering a bill called the “Drone Advisory Committee for the 21^st Century Act.” If passed, the bill would ensure that the Federal Aviation Administration (FAA) includes representatives from agriculture, forestry, and rangeland, in addition to representatives from state, county, city, and Tribal governments on the Drone Advisory Committee (DAC).  Thus, such representatives would be part of the conversation when the DAC advises the FAA on drone policies.

Ag financing tools may get an upgrade. The “Modernizing Agriculture and Manufacturing Bonds Act,” or MAMBA (what a great name) was introduced very recently in the House Committee on Ways and Means.  Text of the bill is not yet available, but when it is, it should be located here. According to this fact sheet, the bill would make a number of changes to current law, including increasing “the limitation on small issue bond proceeds for first-time farmers” to $552,500, repealing “the separate dollar limitation on the use of bond proceeds for depreciable property” which would mean famers could use the full amount for equipment, breeding livestock, and other capital assets, and modifying the definition of “substantial farmland” to make it easier for beginning farmers to gain access to capital.

Shoring up national defense of agriculture and food is on the docket.  The Committee on Agriculture, Nutrition, and Forestry sent the National Bio and Agro-Defense Facility Act of 2019 (NBAF) to the floor of the Senate for consideration. Among other things, the bill would allow the USDA, through the National Bio and Agro-Defense Facility, to address threats from human pathogens, zoonotic disease agents, emerging foreign animal diseases, and animal transboundary diseases, and to develop countermeasures to such diseases.  Essentially, USDA and NBAF would see to national security in the arena of agriculture and food.

We hope you have a wonderful holiday season! We will be sure to continue the ag law updates in the next decade!

The Ohio Ag Law Blog–The Ag Law Harvest

Written by Ellen Essman and Peggy Hall

The holidays are almost here, 2019 is almost over, but the world of ag law isn’t taking a break.  From cannabidiol, to Ohio bills on water quality and wind power, to a cage-free egg law in Michigan, here’s the latest roundup of agricultural law news you may want to know:

FDA warns companies about cannabidiol products. If you’ve been following the hemp saga unfold over the past year, you know that the Food and Drug Administration (FDA) has been contemplating what to do with cannabidiol, or CBD from derived hemp products.  In addition to manufacturing standards, FDA has also considered how CBD products are marketed and labeled.  Although FDA has issued no official rules on CBD marketing and labeling, the agency has warned a number of companies that their marketing of CBD violates the Federal Food, Drug, and Cosmetic Act (FD&C Act). On November 25, FDA sent warning letters to 15 companies.  FDA asserts that the companies “are using product webpages, online stores and social media to market CBD products in interstate commerce in ways that violate the FD&C Act.”  In particular, FDA is apprehensive about those companies who market CBD products in ways that claim they can treat diseases or be used therapeutically for humans and animals.  Since CBD has not been approved by FDA or found safe for these uses, companies cannot make such claims.  You can see FDA’s news release for more information and for the list of companies.

It won’t be as difficult for financial institutions to serve hemp related businesses.  Federal agencies and state bank regulators released a statement clarifying what is required of banks when hemp businesses are customers.  Since hemp was removed from the federal list of controlled substances, banks no longer have to file a Suspicious Activity Report on every customer involved in growth or cultivation of hemp just because they grow hemp.  This action will make it easier for those legally cultivating hemp to work with banks and obtain loans for their farms.  For more information, the agencies’ press release is available here.

Ohio House considers the Senate’s water quality bill.  Ohio’s House Energy & Natural Resources Committee held a hearing on Senate Bill 2 just last week.  The bill would implement a Statewide Watershed and Planning Program through the Ohio Department of Agriculture (ODA). Under the bill, ODA would be charged with categorizing watersheds in Ohio and appointing coordinators for each of the watersheds.  ODA and the coordinators would work closely with soil and water conservation districts to manage watersheds.  Ag groups such as the Sheep Improvement Association, the Cattleman’s Association, the Pork Council, the Dairy Producers Association, and the Poultry Association testified in favor of SB 2.

Ohio House committee debates wind bill.  The House Energy & Natural Resources
Committee was busy last week—in addition to SB 2, they also discussed House Bill 401.  In the simplest terms, if passed, HB 401 would allow townships to hold a referendum on approved wind projects.  This means that with a vote, townships could overturn decisions made by the Ohio Power and Siting Board (OPSB).  In the committee hearing, wind industry representatives argued that such a referendum would be harmful, since it would overturn OPSB decisions after companies have already spent a great deal of money to be approved by the Board.  They also argued that the bill singles out the wind industry and does not allow referendums on other energy projects.  Republican committee members signaled that they may be willing to revise the language of HB 401 to allow a referendum before OPSB decisions.

Iowa’s ag-gag law is paused.  In May, we wrote about Iowa’s new ag-gag law, which was the state’s second attempt to ban undercover whistleblowers and journalists from secretly filming or recording at livestock production facilities.  In response, numerous animal rights groups sued the state, claiming that the law unconstitutionally prevents their speech based on content and viewpoint.  On December 2, the U.S. District Court for the Southern District of Iowa issued a preliminary injunction, which means that the state will not be able to enforce the ag-gag law while the lawsuit against it is being considered. The preliminary injunction can be found here.

Cage free eggs coming to Michigan in 2024. Michigan lawmakers recently passed Senate Bill 174, which, among other things, will require that all birds producing eggs both in and out of the state be housed in “cage-free” facilities by 2024.  The cage-free facilities will have to allow hens to roam unrestricted with the exception of exterior walls, and some types of fencing to contain the birds.  In an indoor facility, the farmer must be able to stand in the hens’ usable floor space while caring for them.  In addition, the facilities must have enrichments for hens such as scratch areas, perches, nest boxes, and dust bathing areas. Michigan joins California, Oregon, Rhode Island, and Washington in banning non-cage-free eggs.  Note that Michigan’s law will apply to Ohio egg producers who sell eggs to buyers in Michigan.

Case watch:  hearing set in Lake Erie Bill of Rights case.   The court has set a January 28, 2020 hearing date for the slow moving federal lawsuit challenging the Lake Erie Bill of Rights (LEBOR) enacted by Toledo voters in February.  The hearing will likely focus on several motions to dismiss the case filed by the parties on both sides of the controversy, but Judge Zouhary indicated that he’ll set the agenda for the hearing prior to its date.  Drewes Farm Partnership filed the federal lawsuit against the City of Toledo in February, claiming that LEBOR is unconstitutional and violates several Ohio laws.  The State of Ohio was permitted to join the farm as plaintiffs in the case, but the court denied motions by Toledoans for Safe Water and the Lake Erie Ecosystem to join as defendants in the case.   For more on the LEBOR lawsuit, refer to this post and this post.  For our explanation of LEBOR, see this bulletin.

Stay tuned to the Ohio Ag Law Blog as we continue to track these and other developments in agricultural law through the holidays and beyond.

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.

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 licenses.  In 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.

The Ag Law Harvest

Written by Evin Bachelor, Law Fellow, OSU Extension Agricultural & Resource Law Program

Farm Science Review is upon us, and we’re hoping that the low-80s forecast holds true.  In addition to checking the weather report, we’ve been monitoring the news for developments in the agricultural law world, and quizzing each other on agricultural law topics so that we’re ready to answer your questions.  While we hope you come see our presentations (speaking schedule available HERE), we won’t make you wait until you see us at the Molly Caren Agricultural Center in London to learn what we’ve found in the news.

Here’s our latest gathering of agricultural law news you may want to know:

Family Farmer Relief Act of 2019 signed into law.  We’ve talked about this bill on the ag law blog, and now it’s official.  With the President’s signature, the debt limit for family farmers seeking to reorganize under Chapter 12 bankruptcy increases to $10 million from an adjusted $4.4 million.

No vote on community rights in Williams County, yet.  A proposed county charter for Williams County, Ohio containing language similar to the Lake Erie Bill of Rights may not make it on the November ballot.  The Ohio Supreme Court recently refused to compel the Williams County Board of Elections (BOE) to include the charter on the ballot for procedural reasons.

The charter would have declared that the people of Williams County have the right to a healthy environment and sustainable community, and that the Michindoh Aquifer and its ecosystem have the right to exist, flourish, evolve, regenerate.  Further, the aquifer would have the right of restoration, recovery, and preservation, including the right to be free from interferences such as the extraction, sale, lease, transportation, or distribution of water outside of the aquifer’s boundary.

Even though the petition to put the charter on the ballot had enough signatures, the BOE believed that the language of the charter violated Ohio law, and therefore exercised its power to reject the petition and keep it off the ballot.  The petitioners appealed the BOE’s decision to the Williams County Court of Common Pleas, and that court agreed with the BOE.  Instead of going to the Court of Appeals, the petitioners tried to go directly the Ohio Supreme Court because the BOE will soon print the November ballots.  The Ohio Supreme Court said the petitioners should have gone to the Court of Appeals first, and that it will not decide on whether the BOE has to include the charter on the ballot until the petitioners do so.

This doesn’t mean the end for the proposed charter, but rather that more court time is in the proposed charter’s future.  To read the Ohio Supreme Court’s opinion, click HERE.  To read the text of the proposed charter, click HERE.

Hemp, hemp, and more hemp.  Legal and policy updates on hemp continue to trickle down from state and federal officials.  Since our last blog post, when we released our latest law bulletin on the legal status of hemp in Ohio, there have been a couple additional developments.

One of the latest updates we’ve heard from USDA is that industrial hemp growers in states with a USDA-approved hemp production plan may apply for crop insurance to cover hemp grown for fiber, flower, or seeds starting next year.  Ohio is in the process of putting together a hemp program to send to the USDA for approval.  Ohio farmers still cannot legally grow hemp until the Ohio Department of Agriculture creates a hemp program and the USDA approves that program, but we are expecting rules to be released from those agencies in the coming weeks.  For more about the crop insurance update, read the Risk Management Agency’s press release HERE.

Closer to home, we’ve heard that the Ohio Department of Agriculture (ODA) has requested $3.3 million from the Ohio Controlling Board for staffing along with IT equipment and support.  Further, ODA has made statements predicting that it expects to have its rule hemp program rule package ready by the end of the year.

Federal court orders U.S. EPA to reconsider Renewable Fuel Standards waivers and their impact on endangered species.  The U.S. EPA is responsible for creating fuel standards that incorporate and blend renewable sources of energy under the Clean Air Act.  These standards tell refineries how much of their fuel blend must come from renewable sources of energy; however, the U.S. EPA also has the authority to grant waivers to companies that would have difficulty meeting the standard.  The court noted that some industry groups felt that the 2018 rules were too strict, while others argued that they were too lax.  The court ended up dismissing all but one of the claims against the U.S. EPA, saying that Congress gave it discretion in developing the standards.  However, the court sent the rule back to the U.S. EPA due to an argument by environmental groups that the federal agency failed to conduct a thorough review of the risk to endangered animals, plants, and habitats under the Endangered Species Act.  Many farm groups have criticized the Trump administration’s granting of waivers for causing a reduction in demand for their products from energy companies, but it appears that they will have to make their arguments to the administration rather than to the courts.  To read the D.C. Circuit’s opinion, click HERE.

Ohio Ag Law Blog— Law Bulletin Helps Explain the New Hemp Frontier

Written by Ellen Essman, Senior Research Associate, OSU Extension Agricultural & Resource Law Program

These days, industrial hemp never seems to leave the news. Just this week, the U.S. Court of Appeals for the Ninth Circuit declined to decide a case involving the interstate shipment of hemp between Oregon and Colorado by way of Idaho.  Hemp is illegal in Idaho, where the product was seized and the driver was arrested, even though the 2018 Farm Bill allows for the interstate transportation of hemp.  The Ninth Circuit, reviewing the case, determined that the state court actions needed to be decided before federal courts could hear the case.  As you may be aware, Ohio also made news this summer when the state passed a bill legalizing hemp in the state.

All of these developments involving industrial hemp may leave you with many questions. What is hemp? What did the 2018 Farm Bill do? What does Ohio’s new law do? Most importantly, can I grow and process hemp right now? To help farmers and others interested in the status of the hemp industry, we have recently added a law bulletin entitled “Legal or Not? Growing Industrial Hemp in Ohio” to our Ag Law Library.  There, we sort out the above questions and more.  We also discuss the anticipated development of federal and state hemp regulations.  The bulletin is available for you to read here.

The Ag Law Harvest

Written by Evin Bachelor, Law Fellow, OSU Extension Agricultural & Resource Law Program

It’s been a busy July in the ag law world, to say the least.  The Ohio General Assembly officially passed the hemp bill and a budget, RMA adjusted its prevent plant restrictions, and we have seen more activity on LEBOR.  With everything that is going on, it’s time for another ag law harvest.  Here’s our latest gathering of agricultural law news you may want to know:

Ohio Department of Agriculture announces website for future hemp program.  Just days after S.B. 57 took effect, the Ohio Department Agriculture (ODA) launched a new webpage declaring “Hemp Is Now Legal.”  However, the webpage goes on to explain that hemp cultivation, processing, and research licenses, which are required to legally do those activities, are not yet available as the rules and regulations have not been developed.  ODA says the goal is to have farmers licensed and able to start planting hemp by spring 2020.  As for CBD, the webpage says that it is now legal to sell properly inspected CBD products in Ohio.  Note the “properly inspected” caveat.  ODA wants to test CBD products for safety and accurate labeling before the product is sold to Ohio consumers.  If they have not already done so, those wanting to sell CBD products should contact ODA to have their product tested.  You can view the new webpage HERE.

Judge says $2 billion damages award is too much in Roundup case.  A California state judge recently reduced the punitive damages award granted to Alva and Alberta Pilliod from $2 billion to $69 million, and reduced their compensatory damages from $55 million to $17 million.  All combined, the couple would still receive $86.7 million in damages.  As we previously discussed, the couple successfully convinced a jury that the glyphosate in Roundup significantly contributed to causing their non-Hodgkin’s Lymphoma.  In reducing the awards, the judge explained that the punitive damages were excessive and unconstitutional because they exceeded the U.S. Supreme Court’s restrictions.  However, the judge denied Bayer’s request to strike the punitive damages award outright.

U.S. EPA denies petition to ban use of cholrpyrifos pesticide.  Back in 2007, environmental groups petitioned to have the U.S. EPA revoke tolerances and registrations for the insecticide chlorpyrifos, citing harmful effects to people and nature.  Without getting into the merits of the allegations, the timeline and history of the U.S. EPA’s decision is fairly interesting.  The U.S. EPA had not completed its review of the chemical by 2015, so the groups took the agency to court, where they received a court order compelling the U.S. EPA to make a decision.  The agency issued a proposed rule at the end of 2015 that would have revoked the tolerances; however, the federal court said that the U.S. EPA had not completed a full review nor properly responded to the 2007 petition.  Even though it made a decision, the court wanted to see more evidence of a full administrative review.  By the time the agency had a chance to fully review the chemical’s effects, the Obama EPA had turned into the Trump EPA.  In March 2017, the U.S. EPA issued a denial order regarding the petition, which essentially threw out the petition.  The environmental groups submitted an objection shortly after the denial order.  By July 2019, the U.S. EPA had a chance to think some more and issued a final order denying the objections.  As it stands now, the agency has decided not to revoke tolerances or registrations for chlorpyrifos.  To read the agency’s final order denying the objections, click HERE.

Animal Disease Traceability program to require RFID tagging for cattle and bison by 2023.  The USDA’s Animal and Plant Health Inspection Service is looking to fully bring animal disease traceability into the digital world, at least for beef and dairy cattle and bison.  By requiring radio frequency identification (RFID) tags, the service says that animal health officials would be able to locate specific animals within hours of learning about a disease outbreak, significantly less than with paper records.  Starting at the end of 2019, the USDA will stop providing free metal tags, but would allow vendors to produce official metal tags until the end of 2020.  At that time, only RFID tags may be used as official tags.  Starting on January 1, 2023, RFID tags will be required for beef and dairy cattle and bison moving interstate.  Animals previously tagged with metal ear tags will have to be retagged, but feeder cattle and animals moving directly to slaughter will be exempt.  To learn more, view the USDA’s “Advancing Animal Disease Traceability” factsheet HERE.

Senators want to fund more ag and food inspectors at U.S. ports of entry.  Citing the national interest to protect the nation’s food supply, four U.S. Senators have introduced a bill that would provide the U.S. Customs and Border Protection with additional funding over the next three years.  In each of the three fiscal years, the funds would be used to hire, train, and assign 240 additional agriculture specialists, 200 new agriculture technicians who provide support to the agriculture specialists, and 20 new canine teams.  The personnel would work at U.S. ports of entry, including seaports, land ports, and airports across the country.  If passed, S.2107 would require the Comptroller General of the United States to brief congressional committees one year after the bill’s enactment on how well federal agencies are doing at coordinating their border inspection efforts and how the agriculture specialists are being trained.  The bill comes months after U.S. Customs and Border Protection seized nearly a million pounds of Chinese illegally smuggled pork from China, where African swine fever has ravaged the country’s pork industry.  For more information about the bill, click HERE.

Cannabis decriminalization bill introduced in Congress.  Congressman Jerrold Nadler (D-NY) has introduced H.R. 3884 with the aim to do four things: 1) decriminalize cannabis at the federal level, 2) remove cannabis from the federal controlled substances schedules, 3) provide resources and rehabilitation for certain people impacted by the war on drugs, and 4) expunge certain criminal convictions with a cannabis connection.  The bill currently has 30 co-sponsors, including 29 Democrats and 1 Republican.  None of Ohio’s members of Congress have signed on as a co-sponsor at this time.  The bill follows the recent change in status for hemp, which found favor in the 2014 and 2018 Farm Bills.  However, that change in status was largely predicated on the argument that hemp is not marijuana, so it remains to be seen whether the political climate is ready to loosen restrictions on marijuana as well.  For more information about the bill, click HERE.