Getting to the Root of the Problem: The 0.3% THC Hemp Standard

By Shawn Hauser, Partner

Feb 27, 2020

The beginning of federally regulated hemp has been marred by industry-wide concerns about an overly restrictive federal program, and what may come from the United States Department of Agriculture’s (USDA) review of more than 4,600 comments to its interim final rule (IFR) governing US hemp production. Over the past several months, hemp farmers, state departments of agriculture, and other stakeholders have carefully crafted comments and proposed revisions to the many challenging—and, frankly, untenable—IFR provisions. The IFR, unfortunately, contains extremely restrictive regulations regarding who, when, and how hemp can be sampled, tested, and disposed.

Even though the 2018 Farm Bill removed hemp from the federal Controlled Substances Act (CSA) and was intended to remove the Drug Enforcement Administration (DEA) from having any regulatory authority over hemp production, “DEA” is mentioned more than 40 times in the IFR, firmly entrenching the DEA's unwelcome, unintended, and unnecessary role in regulating hemp. On the bright side, recent news from the USDA delaying the DEA licensure requirement for testing labs confirms that the DEA's role in testing hemp will no longer be a concern for the 2020 growing season; however, the requirement will likely apply for future growing seasons.

Some of the more problematic elements of the IFR include:

• Hemp samples from 100% of registered lots must be tested by DEA certified laboratories within 15 days of harvest (note the DEA requirement is waived for 2020), and 
• Assessment of negligent violation for hemp exceeding 0.5% THC 
• Any hemp that tests over the 0.3% THC limit must be destroyed

Under the federal program, a substantial portion of the hemp currently being cultivated in the U.S. would test hot (over 0.3%). No one disputes that the rules make hot hemp and crop loss a probability. In fact, the IFR estimates that up to 40% of producers will provide samples that test hot, and many public comments indicate this number is even higher.  

Missing from the IFR are alternative disposal options for hemp exceeding the onerous 0.3% total THC standards. This just adds insult to injury for farmers, as they have no way to recoup financial losses for hot hemp that could possibly be remediated or used for another purpose. In addition to the financial losses incurred by farmers with “hot” hemp, civil or criminal penalties may apply. 

According to Colorado officials, the damage from implementing the current IFR provisions would be extraordinary. Colorado estimates that had the IFR been implemented in 2019, requiring testing of 100% of lots and destruction of any hot hemp, approximately 24,500 acres of crops – or a farmgate value of $842.6 million – would have faced destruction. The state estimates that if the IFR were to allow producers to utilize hemp between 0.3% and 1% in the supply chain, $789 million in direct farmgate value and $1.1 billion in total economic output would be preserved. 

In an effort to cause as little disruption as possible to farmers as they transition to the federal hemp program, many states are electing to operate under the more permissive 2014 Farm Bill for the 2020 growing season, and hoping that USDA will fix at least some of the IFR’s problematic provisions. 

USDA confirmed that some regulations could change prior to the issuance of a final rule (estimated October 2021), and that they will open a second comment period after the 2020 growing season but that it is certainly possible the current IFR provisions will remain for the 2021 growing season. However, any changes to the 0.3% standard must be effectuated through Congress and are out of the USDA’s hands.  

In the context of this impossibly onerous regulatory framework, it is our hope that regulators, lawmakers, and stakeholders will be equally motivated to ensure the passage of reform that is actually needed: changing the arbitrary 0.3% THC standard to 1%. As we pour through public comments and consider potential solutions to salvage value in the supply chain, it is clearer than ever that the 0.3% threshold is the root of the problem, and that good policy is not based on an arbitrary standard.

As the Cannabis Business Times and others have recently pointed out, the 0.3% standard is rooted in a 1976 article titled “A Practical and Natural Taxonomy for Cannabis.”

“It will be noted that we arbitrarily adopt a concentration of .3% ∆9 THC (dry weight basis) in young, vigorous leaves of relatively mature plants as a guide to discriminating two classes of plants.” 

While the number was admittedly arbitrarily adopted, the research and science are clear: Cannabis does not reach its intoxicating potential at even 1% THC. The DEA itself has stated in agency guidance that THC tests are inconclusive if below 1%. As of 2014, the average potency of illicit cannabis plant material was approximately 12%. According to the Potency Monitoring Project administered by the University of Mississippi cannabis farm in coordination with NIDA, the average potency of marijuana samples collected hasn't ever been below 2%—even if you go back to the 1970s. (See page 10). It is for this reason that other countries, such as Australia and Switzerland, have higher THC testing thresholds for hemp. 

Meanwhile, the Colorado 2015 Marijuana Equivalency in Portion and Dosage study states that, out of 26,023 instances in Metrc, the 95% confidence interval lower and upper bound ranged from 17.41% total THC to 17.53% total THC, and shake trim ranged from 15.26% to 15.80% (See page 19 of this Quarterly Report on NIDA’s Marijuana Project). In addition, the Congressional Research Service acknowledges that “1% is considered the threshold for cannabis to have a psychotropic effect or intoxicating potential.” 

The current restrictive federal program—especially the 0.3% THC threshold—is unrealistic and detrimental to farmers who are risking their livelihoods, and has already had adverse economic effects on an industry with so much potential. While changing the 0.3% threshold to 1% would require a legislative fix, it is time that science-based reasoning prevails over outdated, arbitrary standards.  

The good news is that we, as a new and promising industry, are more organized, informed and motivated than ever before to bring about this change.