BISMARCK, N.D. - In early 2019, North Dakota submitted plans to the federal government for how it would regulate the growing of hemp, confident that the state had a good program that was working well. Montana did the same.

State officials expected their plans would comply with federal rules on hemp, a crop that had until recently been banned because of its association with its cousin, marijuana, which is still outlawed at the federal level.

After a few years of hemp being allowed under pilot research programs, the U.S. Domestic Hemp Production Program was established by the interim final rule published Oct. 31, 2019. But the rule was nothing like what officials in states that had been operating hemp pilot programs anticipated. For instance, North Dakota Agriculture Commissioner Doug Goehring said the rule requires testing of every half acre of hemp to ensure that the plants wouldn't induce the same kind of high that marijuana does. With tests running more than $100 a pop, requiring such testing would quickly render hemp an unprofitable crop.

Montana's and North Dakota's plans were quickly sent back for edits or amendments by the USDA. Andy Gray, Montana Department of Agriculture hemp program coordinator, said Montana resubmitted a plan early in January; the USDA has not yet approved the plan.

Goehring said North Dakota plans to continue working on revisions to its plan while continuing to operate for the 2020 growing season under the pilot program set up by authority of the 2014 Farm Bill. That means that, for this growing season, North Dakota will follow the same rules it has since implementing its hemp program rather than under a plan approved by the USDA. Minnesota, which has not submitted a plan, will do the same. Such plans are allowed to continue until Oct. 31, 2020.

But beyond 2020, states that already had successful hemp pilot programs under the 2014 Farm Bill must see if they can reconcile what has worked in the past with what the federal government wants to see as the fledgling industry is expected to grow.

The USDA has sent back the plans of two tribal governments and four other states besides North Dakota and Montana. Some states have submitted plans and others plan to. Several states, like Minnesota, decided to continue operating under its pilot program for the 2020 growing season while they work on a plan.

Whitney Place, assistant commissioner in the Minnesota Department of Agriculture, said her state waited until the interim final rule was released before starting on its plan but had planned to move forward more quickly. That changed when the federal rule came out, partly because it was later in 2019 than anticipated and partly because of what it contained.

"We did not anticipate how prescriptive (the federal rule) would be," she said.

Some examples Minnesota has raised in comments to the USDA include a multitude of problems with USDA's ideas about testing protocol. The federal rule includes a tight timeframe for testing and requires Drug Enforcement Administration labs for testing. Minnesota also raised an issue with farmers being considered "negligent" when THC levels rise slightly above the limit of 0.3%, and a lack of oversight of hemp seed sales.

The USDA rule remains "interim final" and the comment period on the matter continues. But in meetings with USDA officials, Place has not gotten the impression that the agency is open to many changes.

"USDA will take into consideration public comments submitted between Oct. 31, 2019, and Jan. 29, 2020, and will gather and analyze information from the 2020 harvest season before issuing a final rule," a USDA spokesperson said via email. USDA's Agricultural Marketing Service did not make anyone available to Agweek for interviews but did answer several questions submitted via email.

A growing and changing industry

The 2014 Farm Bill authorized pilot programs of industrial hemp production. Since then, Minnesota, Montana and North Dakota have seen acres of the crop jumping annually. Montana in 2019 grew the most acres in the nation, with around 50,000 - a big jump from the approximately 500 when the state's program started in 2017.

The growth hasn't come without quick change. In earlier years, all three states saw most farmers growing for grain and fiber markets. But in the past year, all three saw a major shift to the majority of growers growing for the CBD, or cannabidiol.

CBD is a chemical compound that can be found in cannabis plants but also can be extracted from cannabis' cousin, hemp. While hemp fibers are used in making rope, clothing, paper and other products, CBD is often sold as a dietary supplement or in things like lotions. Unlike THC, CBD does not cause a high.

Hemp plants grown for CBD require different genetics than those grown for other purposes, and it's all part of the learning process that regulators have experienced. Goehring said THC levels in grain and fiber plants in North Dakota have been far below the 0.3% level required by law; it's the hemp grown for CBD that has seemed the most at risk for elevated levels.

But Place said that as the genetics of the plants improve, the THC levels will continue to decrease. In 2019, only 12% of Minnesota's tests were above the 0.3% level. None of those failed tests reached THC levels anywhere near those of marijuana, local law enforcement told her.

Place said Minnesota found many issues with the interim final rule, compared to how the state has operated under its pilot program. The No. 1 problem, she said, is a requirement that all testing happen within a 15-day timeframe before harvest. Under Minnesota's program, they had 30 days to get to the state's 343 growers, spread over 8,000 acres and 400,000 indoor square feet. Just having staff get to the locations is one thing, she said; getting the lab testing completed is another.

Montana, among the largest states in geography as well as the top hemp producer, had three weeks to complete testing under its plan; even with the staggered nature of hemp harvest, that was difficult, Gray said.

"USDA will follow the requirements in the interim final rule when reviewing and approving plans. We are working on issues regarding lab registration and disposal. We are also aware of the complexities associated with sampling and testing and will take them into consideration when evaluating comments received on the interim final rule," the USDA spokesperson said.

How to move forward

Montana's resubmitted plan includes clarifications and rationales for where its plan differs from what was included in the USDA's interim final rule, Gray said. For instance, the state does not intend to test certified varieties of hemp; non-certified varieties made up the majority of the state's hemp, with approximately 40,000 acres in 2019, Gray said. The state also is sticking with a three-week period for testing rather than the 15 days prescribed in the USDA rule. Gray said he's confident the USDA will accept the plan and that the state's industry will continue to flourish.

Place said even her state's and North Dakota's plans to regulate hemp under the pilot programs established by the 2014 Farm Bill for the 2020 growing season may be difficult; the period for the pilot program ends Oct. 31, 2020. She said Dec. 31 would be a more logical date. The USDA is not inclined to stretch that period out.

"After Oct. 31, 2020, all hemp producers in the U.S. must be licensed by the USDA or by a state or tribe administering a USDA-approved hemp production plan, including those who were producing under the 2014 pilot program. Any hemp harvested after Oct. 31, 2020, is subject to the sampling, testing and other requirements in the interim final rule published Oct. 31, 2019," the USDA spokesperson said.

Both Goehring and Place said states have contemplated just leaving regulation up to the federal government, eliminating the expense and hassle of doing it themselves. But both feel the task is better left to the states that already have put time and money into programs that have been successful. Goehring questions whether the USDA would be prepared to handle the inspection if states take that route.

"USDA will have adequate staffing and resources in place to administer a federal plan and is prepared to issue licenses to producers who do not fall under a state or tribal plan provided that those states and tribes allow for the production of hemp," the USDA spokesperson said.

Despite the present confusion, Minnesota, Montana and North Dakota have no plans on going backward on hemp.

"I believe we had a good program before. I believe we will have a good program going forward," Goehring said.

"Montana is pro hemp. The Department of Agriculture is pro hemp," Gray said. "We believe there is a future for hemp in Montana."

Place said the work her department has done with local law enforcement and departments of health has made a strong program.

"We've kind of developed a framework that works for us," she said.

Hemp plan progress

Tribal and state governments throughout the region are at various points with their hemp plans.

While South Dakota has not approved growing hemp, three tribal governments within the state have.

Here is the status of hemp plans around the region:

• Flandreau Santee Sioux in South Dakota: plan approved by USDA.

• Fort Belknap Indian Community in Montana: plan under review.

• Indiana: plan under review.

• Iowa: plan under review.

• Iowa Tribe of Kansas and Nebraska: plan under review.

• Minnesota: will operate under pilot program for the 2020 growing season.

• Montana: plan under review. (USDA lists Montana as having their plan sent back for revisions, but Andy Gray, hemp program coordinator for the Montana Department of Agriculture, says the state has resubmitted.)

• Nebraska: plan under review.

• North Dakota: plan sent back for revisions. (North Dakota plans to operate under its pilot program for the 2020 growing season.

• Oglala Sioux Tribe in South Dakota: plan sent back for revisions.

• Santee Sioux in Nebraska: plan under review.

• Winnebago Tribe of Nebraska: drafting a plan for review.

• Wisconsin: will operate under pilot program for the 2020 growing season.

• Wyoming: plan under review.

• Yankton Sioux Tribe in South Dakota: drafting a plan for review.

A complete list can be found at https://www.ams.usda.gov/rules-regulations/hemp/state-and-tribal-plan-re....