On May 28, 2019, the U.S. Department of Agriculture Office of General Counsel issued a legal opinion that clarifies its position on several important hemp-related provisions of the 2018 Farm Bill, including the legality of hemp in interstate commerce and the status of hemp currently grown pursuant to the 2014 Farm Bill prior to implementation of USDA regulations authorized by the 2018 Farm Bill. The USDA’s legal opinion concludes that states may not prohibit the interstate transportation or shipment of hemp, regardless of whether it is lawfully produced under the 2014 Farm Bill or the 2018 Farm Bill.
In addition to expanding the federal definition of hemp and removing hemp from the list under the Controlled Substances Act, the 2018 Farm Bill prohibits the states from interfering with the interstate transportation or shipment of hemp or hemp-derived products. However, we remain in a period of transition whereby the domestic production of hemp grown pursuant to the 2018 Farm Bill has not yet begun, pending creation of USDA regulations and USDA approval of state plans.
As a result, there has been disagreement over the extent to which the 2018 Farm Bill's change in the federal legal status of hemp took immediate effect and whether it presently applies to hemp grown pursuant to current state pilot programs authorized by the 2014 Farm Bill. Specifically, two underlying issues are now being tested in the federal courts:
- Whether hemp products may be shipped between states before the USDA and the states complete their respective regulations and hemp plans authorized by the Farm Bill
- Whether hemp-derived CBD isolate, which is banned by the FDA in food and supplements, should be treated differently than other hemp-derived products for purposes of interstate commerce.
Federal courts in Idaho and West Virginia are the first to address these questions, and they have made inconsistent rulings as to the legality of interstate movement of hemp and hemp-derived products. In United States v. Matthew Mallory et al., the U.S. District Court for the Southern District of West Virginia ruled that a seized shipment of 2014 Farm Bill−compliant hemp was legal to transport in interstate commerce. Conversely, the U.S. District Court for the District of Idaho recently held that it is illegal to transport in interstate commerce hemp that is grown prior to the completion of federal or state plans to regulate the production of hemp under the 2018 Farm Bill. The Big Sky Scientific LLC v. Jan Bennetts case is presently under appeal to the Ninth Circuit Court of Appeals.
In its legal opinion, the USDA addressed these divergent federal court rulings and strongly sided with the reasoning in the West Virginia case and against the Idaho decision. The USDA’s General Counsel states that “the conclusion reached by the Mallory court is consistent with my interpretation that States cannot block the shipment of hemp, whether that hemp is produced under the 2014 Farm Bill or under a State, Tribal or Departmental plan under the 2018 Farm Bill.”
The USDA’s legal opinion is an important development that should go a long way toward resolving any lingering doubt that 2014 Farm Bill−compliant hemp and hemp-derived products are legal in interstate commerce. The legal opinion also may be persuasive to the Ninth Circuit Court of Appeals, which has not yet issued its final decision on the release of a shipment of hemp in the Big Sky Scientific case, but the Ninth Circuit recently ordered that test results on the shipment of industrial hemp confiscated in January must be released to the public.