Iowa Outdoor Hemp License Applications Due May 1
The 2018 Farm Bill required the USDA to create a regulatory framework for the production of hemp in the United States. States and Tribes can choose to operate under the Federal plan or submit their own plan for approval. Federal regulations require producers to obtain a license from the USDA, State, or Tribal hemp program which has jurisdiction over the intended growing location.
Federal Hemp Regulations
In October 2019, the USDA issued an Interim Final Rule (IFR) establishing the domestic hemp program. 84 FR 58522. After a period for public comment, the USDA made several changes and published the Final Rule on January 19, 2021. 86 FR 5596. The regulations went into effect on March 22, 2021. Many sections of the Final Rule remained the same, such as the definition of hemp. States and Tribes wishing to adopt new provisions under the Final Rule must submit an updated plan for USDA approval. Iowa is working with the USDA to amend its state plan. Below are several key provisions of the Final Rule, which applies to States and Tribes which have not received USDA approval, followed by information on the Iowa regulations currently in place.
Licensing requirements under the Final Rule
Previously, applications for a USDA hemp producer license had to be submitted between August 1 and October 31. Applications and license renewals are now accepted on a rolling basis. The applicant must include relevant contact information, a criminal history report, and consent to comply with the program requirements. 7 C.F.R. § 990.71. The application is available at https://www.ams.usda.gov/rules-regulations/hemp/information-producers. Licenses are valid until December 31st of the third year after the license is issued.
The IFR required every field and every producer to be tested for THC compliance. Under the Final Rule, states and tribes can elect to use performance-based sampling. The performance-based sampling must “be sufficient at a confidence level of 95 percent that no more than one percent of the plants in each lot would exceed the acceptable hemp THC level and ensure that a representative sample is collected that represents a homogeneous composition of the lot.” Id. at § 990.3. In accompanying guidance, protocols may include considering seed certification process or whether the producer has consistently produced compliant hemp plants.
The IFR required all laboratories testing the THC level to be registered with the Drug Enforcement Administration (DEA). To prevent delays due to the limited number of DEA registered laboratories, the Final Rule delays this requirement until December 31, 2022. The Final Rule also increased the post-sampling harvest window from fifteen days to thirty days after sampling.
The IFR required all “hot crops” over 0.3% THC to be destroyed. The Final Rule created an option for a licensee to remediate crops with a THC level from 0.3 percent to 1.0 percent. Remediation can occur by removing and destroying the flowers while retaining the residual material. A second option includes shredding the entire plant into a biomass-like material. Id. at § 990.1 If a producer chooses to remediate a crop, it must then be officially resampled and retested for compliance. Id. at § 990.27(c). The USDA published a Hemp Remediation and Disposal Guide at https://www.ams.usda.gov/sites/default/files/media/HempRemediationandDisposalGuidelines.pdf
Under the IFR, a producer who grew hemp with a THC level over 0.5 percent committed a negligent violation. The Final Rule raises this level to 1.0 percent. Id. at § 990.29. It is important to note that hemp containing over 0.3 percent THC may not enter the stream of commerce and will need to be remediated or destroyed.
The Final Rule specifies that a grower may only have one negligent violation per year. Id. Any producer that negligently violates the law three times in a five-year period will have their license revoked.
A licensed producer must maintain certain information about the land where hemp is produced. This includes: the location of each site where the crop is grown, the total acres planted, the total number of acres which had to be disposed or remediated, and the total number of acres harvested. 7 C.F.R. § 990.71(c). Under the Final Rule, because producers can remediate, records regarding the remediation must also be maintained. This includes a description of the land subject to remediation and the date of remediation. Records and reports must be kept for three years. Id. at § 990.32(b).
The Final Rule clarified a tribe’s jurisdiction. A tribe has the authority to regulate all hemp grown on the tribal grounds, even if it is grown by a non-tribal member. Id. at § 990.4(b)(4)
Iowa Hemp Production Regulations
The Iowa Hemp Act is found in Iowa Code Chapter 204. On March 20, 2020, the USDA approved the hemp plan for the State of Iowa. Regulations regarding the production, processing, and retail sale of hemp are now in effect. Iowa is working with USDA to modify the State Plan to adopt provisions of the Final Rule.
Iowa Hemp License Requirements
In order to grow hemp in Iowa, an individual must file an application for a license with the Iowa Department of Agriculture and Land Stewardship (IDALS). Unlike the federal regulations, applications for an outdoor crop site must be submitted by April 15 while an application for an indoor crop site may be submitted at any time. The deadline to apply for the 2021 growing season has been extended to May 1. In Iowa, licenses run on the calendar year, with the annual licenses expiring on December 31st. An application must include:
- the applicant’s name and address;
- a legal description of crop site;
- the number of intended acres to be used for production;
- the name of hemp varieties, cultivars, or strains intended to be grown;
- the intended hemp crop to be grown such as the grain, seed, fiber, or cannabidiol (CBD);
- whether the proposed crop site is indoor or outdoor;
- all parties who have an ownership interest in the crop site or hemp crop;
- the destruction method the applicant intends to use if the crop fails to meet the acceptable hemp THC concentration; and
- official fingerprints on a form provided by IDALS to be used for a background check.
Iowa Admin. Code r. 21-96.2. The application to row hemp in Iowa is available at https://hemp.iowaagriculture.gov/landing.
Licensees must submit several reports over the course of the growing season. These include planting, preharvest, and postharvest reports. Id. at r. 21-96.4. If a licensee destroys a crop, he must provide a destruction report within forty-eight hours. Licensees must also submit a hemp acreage report to the FSA.
Iowa license fees are based on the number of acres in the crop site.
0 - 5
$500 + $5 per acre
5.1 - 10
$750 + $5 per acre
10.1 - 40
$1,000 + $5 per acre
An applicant must pay a $1,000 primary base fee during the application to secure a preharvest inspection. IDALS requires a $500 supplemental fee for each additional sample the licensee requests. Secondary preharvest inspections fee start at a $1,000 base fee with a $500 supplemental fee for each additional sampling.
Each lot or sub-lot must be sampled before a producer can harvest the hemp crop. Iowa Code § 204.8. IDALS will collect several 2-inch cuttings from the flowers of the plants and ship the sample to the IDALS laboratory for testing. A licensee can begin harvesting after receiving a temporary harvest and transportation permit and designating the storage site for the hemp crop. The designated storage site must be in Iowa.
Until the certificate of analysis, or order of destruction, is issued, the harvested crop must stay at the storage site and IDALS must have unrestricted access to the harvested hemp. A certificate of analysis is issued when the test results show the sampling has an acceptable THC level.[i] Iowa Admin. Code r. 21-96.9. All harvested lots and sub-lots must be stored in a manner that preserves the identity of the crop; separate harvested hemp lots cannot be commingled. A licensee must harvest the sampled hemp crop within fifteen days.[ii] If the test results exceed the acceptable THC level, the crop must be destroyed. Id. at r. 21-96.10.
A licensee will receive a negligent violation for a crop between 0.3 percent and 0.5 percent THC. A licensee who commits a negligent violation must submit a corrective action plant to IDALS. Id. at r. 21-96(12). Any licensee who commits three violations in a five-year period will have his license revoked.
Iowa Consumable Hemp Regulatory Program
On March 3, 2021, the Iowa Department of Correction and Appeals (DIA) opened registration for consumable hemp products. A consumable hemp product is introduced into the human body by ingestion or absorption. A product is consumable hemp if:
- The processor or manufacturer designed the product to be introduced into the human body;
- The product is advertised as an item to be introduced into the human body; or
- The product is distributed, exported, or imported for sale or distribution to be introduced into the human body.
Iowa Admin. Code r. 481-32.1. This can include food and food additives, dietary supplements, and lotions. It does not include a hemp product that is intended to be inhaled.
An individual or entity must obtain a registration before engaging in the manufacturing, distribution, or sale of a consumable hemp product. Two types of consumable hemp registrations exist. The DIA requires a consumable hemp manufacturer registration to manufacture, distribute, or sell a consumable hemp product on a wholesale basis. A consumable hemp retailer registration is required to sell consumable hemp products on a retail basis. Each registration is $475 and can be renewed annually.
[i] IDALS is exploring how to apply USDA-approved performance-based sampling protocols on hemp being raised for research purposes.
[ii] IDALS is working with USDA to amend to 30 days for the 2021 growing season.
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