Hemp Regulation Overview
Hemp is a plant in the botanical class of Cannabis which provides a variety of industrial and medical use. Hemp is also the fastest growing plant in the world, along with bamboo. Some of the products that can be made from Hemp are paper, rope, biodegradable packaging, biofuel, animal feed, and more. Along with Cannabis, Hemp was outlawed on a nation-wide basis via the 1937 Marijuana Tax Act. Hemp has been a recent subject of legalization and regulation due to its various industrial applications. Indiana, along with 21 other states, have passed laws to regulate Industrial Hemp via their Departments of Agriculture.
In 2018, Congress instructed the United States Department of Agriculture (USDA) to create a regulatory exoskeleton for U.S. domestic hemp production. The United States Agriculture Improvement Act of 2018 (The 2018 Farm Bill) removed “hemp” from the definition of marijuana (a schedule I drug). Now, Hemp is no longer considered a Schedule 1 drug under the Controlled Substances Act.
The USDA later published a final rule on January 19, 2021. 7 C.F.R. 990. This rule provided regulations for domestic hemp production which went into effect on March 22, 2021. Within these regulations, the USDA further developed the Domestic Hemp Production Program and eventually created the Hemp eManagement Platform (HeMP). Although Indiana had already addressed domestic hemp production, this provided more uniformity for domestic Hemp production regulation. According to the USDA’s legal opinion, “[s]tates and Indian tribes may not prohibit the interstate transportation or shipment of hemp lawfully produced under a State or Tribal plan or under a license issued under the USDA plan.”
Prior to the 2018 Farm Bill, Governor Mike Pence signed the “Industrial Hemp Bill” into law. Ind. Code 15-15-13 et. seq. At a state level, this commercialized and industrialized the agricultural crop hemp, separate from marijuana. This authorized the Office of Indiana State Chemist & Seed Commissioner (OISC) to begin receiving permits for the production of hemp in Indiana. However, it is still illegal to grow marijuana in Indiana. The OISC regulates hemp growers using Indiana Code 15-15-13 et seq., and the Hemp Emergency Rules. Once the 2018 Farm Bill was passed, the Indiana Legislature altered the Indiana Industrial Hemp Bill to be in conformance with the new federal regulations.
Who Can Grow Hemp in Indiana?
Ultimately, only two things are needed to grow hemp in Indiana: (1) the grower must be properly licensed, and (2) the hemp must pass testing. To pass testing, the hemp must consist of less than 0.3% THC (the psychoactive chemical in marijuana). Pursuant the USDA’s legal opinion, an individual with a State or Felony conviction is precluded from producing hemp under the Agricultural Marketing Act of 1946. There’s an exception to this rule, if an individual is legally growing hemp pursuant to the 2014 Farm Bill, before December 20, 2018, with a conviction before this date. Additionally, growers and handlers of hemp must pass an FBI background check for hemp production licensing.
This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.