USDA Hemp Regulations Analysis- Interstate Transport of Hemp
[Editor’s note: This article is part of a series of articles on the Interim Rule issued by the USDA on October 29, 2019 regarding hemp production. This article, written by Kight Law attorney Philip Snow, addresses interstate shipping of hemp and hemp products. It is one of the issues we are most asked about. Click here to read our summary of the Rule’s key provisions, click here to read about licensing requirements, and click here to read about whether certain provisions will provoke a crisis or create opportunities.-Rod Kight]
On October 29, 2019, the United States Department of Agriculture (USDA) in Section 7 of the Code of Federal Regulations (CFR) Part 990, established a domestic hemp production program. This created an interim final rule with request for comments (Rule). The summary of the Rule establishes a new part in the CFR, specifying the rules and regulations to produce hemp. The Rule outlines provisions for the USDA to approve plans submitted by States and Indian Tribes for the domestic production of hemp. It also establishes a Federal plan for producers in States or territories of Indian Tribes that do not have their own USDA-approved plan. In addition to setting forth these provisions, the Rule also discussed the relationship of the 2018 Farm Bill and the ability to transport hemp and hemp products through interstate commerce.
As a cannabis attorney, one of the questions I am asked most frequently is whether hemp (and hemp products) can be transported across state lines. To understand the answer to this complicated question one must look at a variety of factors
The 2018 Farm Bill states: “no State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.” A simple reading of this language would lead one to logically conclude that through the enactment of the 2018 Farm Bill, Congress expressly contemplated and made legal, the interstate transportation of hemp and hemp products, provided they were produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (AMA).
It is a well-known and accepted principle of law that the United States Constitution and laws made pursuant to it are the supreme law of the land. The basis for this principle can be found in Article IV of the United States Constitution, which is commonly known as the Supremacy Clause. The Supremacy Clause acts to invalidate any state action that is taken contrary to federal law. In this context, any prohibition by a State or Indian Tribe on the interstate transportation of hemp and hemp products would be in direct conflict with federal law.
The USDA explicitly references this conflict in the Rule in a section titled “Federalism.” In conjunction with referencing the language in the 2018 Farm Bill mentioned above, the USDA concludes that in addition to establishing a regulatory framework for hemp production, Congress expressly preempted State law with regard to the interstate transportation of hemp. The USDA concludes the federalism section on interstate transportation of hemp by saying: “States and Indian Tribes may not prevent the movement of hemp through their states or territories even if they prohibit its production.”
A careful read of this assessment, however, shows that the USDA only references hemp and not hemp products. This confusion is easily addressed if one looks to the language of the 2018 Farm Bill itself, where section 10114 provides: “Nothing in this title or an amendment made by this title prohibits the interstate commerce of hemp or hemp products.” Additionally, section 10114 goes on to state: “No State or Indian Tribe shall prohibit the transportation of hemp or hemp products produced in accordance with subtitle G of the AMA (as added by section 10113) through the State or the territory of the Indian tribe, as applicable.”
For reference, subtitle G of the AMA is titled: “Hemp Production.” This subtitle creates the program (and authority) under which hemp production can now lawfully take place in the United States. This subtitle provides the framework for how State or Tribal hemp production plans can be submitted to the USDA, it mandates the USDA create its own hemp production plan (as seen in the Rule), and it also contains Section 10114 which covers interstate commerce for hemp produced under the program. Taken together, all of this clearly indicates an intent by Congress to preempt any State or Indian Tribe from making the interstate transportation of hemp and hemp products unlawful.
It is important to note, however, that this preemption only governs hemp produced in accordance with subtitle G of the AMA. Hemp produced outside the authority of subtitle G of the AMA (including under the 2014 Farm Bill) is still subject to potential seizure by law enforcement.
For additional information regarding the USDA’s Rule, or for help in understanding the rules and regulations governing hemp production in your State, please feel free to contact the hemp attorneys at Kight Law Office.
November 1, 2019
This post was written by Kight on Cannabis attorney Philip Snow. Kight on Cannabis is a law firm founded by attorney Rod Kight that represents legal cannabis businesses. You can contact us by clicking here.