YPR: Tester Says New Rules Create More Certainty For Hemp Industry

Montana’s Democratic Senator Jon Tester said in a press call Thursday new federal regulations for hemp could create more certainty for farmers and boost job growth in the state.

The USDA regulations are intended to create national standards for hemp production and eliminate legal uncertainty, which will help farmers access loans and crop insurance.

Senator Tester says it’s a step in the right direction.

“It’s a good start. I think we got to continue to look and listen to the folks who are growing and utilizing it in manufacturing and tweak it as necessary,” Tester said.

Some of the new rules in the 161-page draft include licensing requirements for farmers. Others require hemp to be tested in labs registered with the federal Drug Enforcement Agency. Plants with too much THC (i.e. the chemical compound that can get a person high) would be destroyed.

Industrial hemp became legal to grow beyond state research and pilot projects with the 2018 Farm Bill. Since then, the non-psychoactive CBD oil derived from hemp has become part of a multi-billion dollar industry. Montana farmers facing low wheat and pulse crop prices planted around 22,000 acres of hemp last year and almost double that in 2019.

But it’s still a bit of a risky business. There aren’t any big processors in the state to turn raw, harvested hemp into CBD oil, t-shirts or biofuels. A group of farmers recently filed a lawsuit, alleging out-of-state companies haven’t paid them what they’re owed.

Tester says this isn’t unprecedented for pioneering industries.

“I mean I got into organics 35 years ago. It was the same kind of deal where you had lot of companies that were operating on a shoe-string budget and sometimes [you] didn’t get paid. As that industry matured, of course, businesses get more financially secure and that’s less of a risk,” Tester said.

Tester and Republican Senator Steve Daines have both supported funding and policies to strengthen the hemp industry in Montana.

A 60-day public comment period on the USDA’s new regulations will end December 30th. The agency will use this feedback when drafting its final set of rules in two years.