Industrial hemp presents a unique opportunity for the administration to concurrently address climate and rural development goals. Hemp, a versatile and sustainable crop, contributes to carbon sequestration by absorbing large amounts of CO2 during its growth. As a fast-growing plant, hemp can be an essential component in carbon capture initiatives. Moreover, hemp cultivation can revitalize rural economies by providing an alternative, profitable crop for small and medium-sized farmers. The various applications of hemp, such as bioenergy, construction materials, and textiles, create a robust market, fostering economic growth in rural communities.

Industrial hemp deserves special attention from the government as it was a major staple of trade and crop of great importance to the founding of this county. Hemp was again called upon in a time of great need during World War II (USDA Hemp for Victory campaign). It is only due to government prohibition that the industry lost almost 90 years of research and growth.

 

OUR ASKS:

  • Create an Interagency Working Group to pull together the heads of all the agencies to ensure all agencies understand the legality of industrial hemp and the potential for this crop to help meet the administration’s goals.

  • Have the President and Secretary of Agriculture publicly talk about hemp, its potential and the government’s encouragement of investment in the industrial hemp space. Ideally the President and Secretary should visit an industrial hemp farm and a hemp fiber and grain processing facility.

  • Include American-grown industrial hemp products in federal procurement programs over and beyond what is available through the Bio Preferred program.

  • Direct agencies like National Science Foundation and grant programs such as SBIR to provide grants that are specific to industrial hemp. While grants for hemp related projects have been approved many of these grants are highly competitive and grants specifically targeted for industrial hemp project will provide much needed funds into research and also send a signal to private investors that industrial hemp is an industry supported by the government.

     

    Specific Challenges and Recommendations:

    1. Department of Agriculture – Rural Development (USDA-RD)
      • Challenge: Recently Rural Development expressed an inability to promote industrial hemp, claiming that hemp processing needs a specific regulatory framework in place that only the Secretary can create. Industrial hemp fiber and seed is no different than any other natural fiber or grain and does not require any regulatory framework. This is clearly a case of confusion between industrial hemp and cannabinoid production, which should have a new regulatory framework.
      • Recommendation: Involve Rural Development in a whole of government approach to make the distinction clear.

    2. Farm Credit System (FCS)
      • Challenge: FCS has indicated that they do not believe that they can invest in funds that deal in industrial hemp. This is despite the fact that we were talking to them about a Rural Business Investment Program (RBIP) which is a program offered by USDA that provides a Rural Business Investment Company (RBIC) license to newly formed developmental capital organizations to help meet the equity capital investment needs in rural communities. It should be self-evident that USDA would not provide an RBIC license to an entity involved in something that is not fully legal.
      • Recommendation: Involve FCS in a whole-of-government approach to make sure they understand that industrial hemp is fully legal and supported by the government.

    3. Food and Drug Administration (FDA):
      • Challenge: Hemp grain not approved for animal feed despite having GRAS status for human consumption.
      • Recommendation: Had hemp not been prohibited when the FD&C created the modern feed ingredient process, hemp would have been grandfathered in like other grains that had historical uses and not have needed to go through this approval process. FDA should fast track hemp applications and be immediately directed to allow hemp grain to be incorporated into animal feed for pets, specialty pets and horses and other animals not destined to be part of the human food supply chain.

    4. Department of Treasury (USDT):
      • Challenge: Despite legal guidance being issued from USDA, banks remain hesitant to support industrial hemp businesses, hindering access to financial services stating that the guidance needs to come from Treasury.
      • Recommendation: Provide clear directives to banks, ensuring compliance with legal industrial hemp transactions.

    5. Department of the Interior (DOI)/National Parks Service (NPS):
      • Challenge: The National Park Service’s misunderstanding of hemp’s federal legality, hindering cultivation on leased lands.
      • Recommendation: Include Interior in a whole of government approach to confirm hemp’s legality and permit cultivation on leased lands, promoting industry growth.

    6. Department of Defense (DOD):
      • Challenge: A ban on hemp foods within the Department’s Drug Policy, impacting industrial hemp seed and seed oil products.
      • Recommendation: Distinguish hemp seed foods from CBD products, allowing for broader industry participation and this highly nutritious protein in the diets of our service men and women.

    7. Small Business Administration (SBA):
      • Challenge: SBA reluctance to fund organizations in the industrial hemp space, despite industrial hemp’s federal legality.
      • Recommendation: Dispel misconceptions within SBA, ensuring support for legitimate industrial hemp ventures.

    8. Government Service Agency (GSA):
      • Challenge: Lack of awareness about the Industrial Hemp Farming Act within GSA, leading to delays in obtaining SAMS and CAGE codes required for federal grant applications.
      • Recommendation: Ensure recognition of Industrial Hemp to prevent unnecessary delays.

    9. Department of Energy (DOE):
      • Challenge: DOE’s refusal to recognize industrial hemp as an approved biomass feedstock due to perceived acreage requirements.
      • Recommendation: Review and adjust minimum acreage requirements to facilitate industrial hemp feedstock designation.

    10. Department of Homeland Security (DHS):
      • Challenge: Confiscation of legally imported industrial hemp due to misunderstanding and lack of clarity.
      • Recommendation: Provide clear guidelines on the legality of imported industrial hemp, preventing unnecessary confiscations.

    11. Environmental Protection Agency (EPA):
      • Challenge: Uncertainty regarding industrial hemp’s eligibility for the Embodied Carbon Grant Program.
      • Recommendation: Confirm industrial hemp’s qualification, facilitating advancements in green construction.

    Most of these issues come down to a lack of education and communication. While we have invested countless hours on providing this education, the reality is that frequent staff changes make this an endless cycle that cannot be broken without express support from the executive branch.