Earlier this year, the Oregon Department of Agriculture proposed changes to its hemp program in anticipation of the expiration of the 2014 Farm Bill under which it currently operates, to come into compliance with the Federal Hemp Program’s Interim Final Rules. These proposed changes, together with Oregon’s already established hemp testing regulations have caused quite the commotion within the industry, and particularly to growers and handlers in the smokable hemp market. This piece provides guidance on Oregon’s hemp testing regulations and its relationship to the Federal Hemp Program rules.
Analysis By Mio Asami
Contributions Veronica Darling
What is the legal definition of “Post-harvest” for registered Oregon hemp growers?
What testing is required for ODA registered hemp growers?
Under Oregon’s Administrative Regulations (OAR), Chapter 603, Division 48, all hemp crops, regardless of when they were grown, must be sampled and tested no more than twenty-eight (28) days prior to harvest.[1] This obligation falls on all registered hemp growers.[2] The regulatory language does not require a grower to conduct post-harvest testing unless the hemp intended for human consumption or use in a “hemp item.” Specifically, an ODA registered grower or handler is not permitted to sell or transfer “industrial hemp for human consumption or a hemp item unless it is first tested by a laboratory as required by these rules.”[3] “These rules” as used in “OAR 603-048-2300(1)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106) refers to “OAR 603-048-2300” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106) through “OAR 603-048-2500” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258119),[4] which set out compliance testing measures other than pre-harvest testing. Thus, pre-harvest testing does not qualify as the testing required “prior to sale or transfer” and additional testing is required before hemp is sold in the final form intended for purchase by an end consumer.
A “hemp item” is defined as “usable hemp, hemp stalk, a hemp cannabinoid product, or a hemp concentrate or extract.”[5] “Usable hemp” is defined as “the flowers and leaves of industrial hemp intended for human consumption that does not fall within the meaning of hemp concentrate or extract, hemp edible, or hemp cannabinoid product.”[6] Thus, usable hemp is hemp that has already been harvested, is intended for human consumption, and does not fall within the meaning of a concentrate, extract, edible, or cannabinoid. “Consumption” means “to ingest, inhale, or topically apply to the skin or hair.”[7] “Industrial hemp for human consumption” is therefore a larger category of hemp differentiated from hemp intended for any other use, such as hemp clothing, paper, etc. Within this category of “industrial hemp for human consumption,” smokable hemp is “usable hemp” that must be tested as its marijuana equivalent because it is inhaled by the consumer.[8]
When must crops be tested in Oregon?
As mentioned above, all pre-harvest testing must be conducted no more than 28 days prior to harvest.[9] On the other hand, the USDA currently requires hemp to be tested no more than 15 days prior to harvest.[10] This year (2020), Oregon originally published its Proposed Rules in late July, which were set to finalize in October, at the same time that the 2014 Farm Bill’s authority expires. However, on October 1, 2020, the U.S. Congress passed H.R. 8319, a continuing resolution extending various regulatory deadlines due to the effects of COVID-19 on various industries.[11] HR 8319 contains language that extends the requirement for state hemp programs that align with USDA federal rules. The extension moved the deadline from October 31, 2020 until September 30, 2021. This means that Oregon is permitted to continue operating its hemp program under its current rules until September 30, 2021, which preserves the 28-day pre-harvest testing timeline rather than the USDA 15-day pre-harvest testing deadline. Pre-harvest testing focuses on tetrahydrocannabinol (“THC”) potency, while subsequent testing has separate requirements.
Once hemp is harvested and becomes usable hemp (by definition equivalent to smokable hemp flower) intended for a consumer[12], a grower must test for pesticides, water activity, and THC and cannabidiol (“CBD”) potency before selling or transferring the hemp (hereinafter referred to as “Subsequent Testing”).[13] Usable hemp’s marijuana equivalent, for the purposes of interpreting the regulations, is “usable marijuana.” “Usable marijuana” testing requirements are contained in “OAR 333-007-0300” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253945) through “333-007-0500” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253959) and “OAR 333-064” (https://secure.sos.state.or.us/oard/displayDivisionRules.action?selectedDivision=1276).[14] Since “OAR 333-007-0300” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253945) through “333-007-0500” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253959) and “OAR 333-064” (https://secure.sos.state.or.us/oard/displayDivisionRules.action?selectedDivision=1276) describes marijuana testing regulations, interpreting those rules in application requires the following considerations:
(b) References to “licensee or registrant” or “Processor or processing site” should be read as “grower” or “handler”;
(c) References to “Authority or the Commission” should be read as “Department”; and
(d) References to “consumer of patient” should be read as “consumer” as that is defined in “OAR 603-048-2310” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258108).
“OAR 603-048-2300(3)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106)(emphasis added).
It is a handler’s obligation to ensure the laboratory properly samples and tests the usable hemp, as stated in “OAR 603-048-2300(4)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106):
To be sufficient to meet the requirement for testing under these rules, a grower, or handler must ensure through a testing agreement or contract with the laboratory that the laboratory:
(a) Samples industrial hemp for human consumption and hemp items according to “OAR 333-007-0360” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253952) and “OAR 333-064-0100” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=270104);
(b) Tests industrial hemp for human consumption and hemp items according to “OAR 333-007-0390” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=252965) to “333-007-0440” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253957);
“OAR 333-007-0390” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=252965) to “333-007-0440” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253957) set out requirements for: (1) microbe testing; (2) pesticide testing; (3) solvent testing (if used); (4) water activity testing; (5) potency testing; and (6) control study operations. Importantly, none of these testing requirements address timing of testing for “usable hemp.” The sampling procedures in “OAR 333-007-0360” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253952) and “OAR 333-064-0100” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=270104) also do not specify the timing for sampling.
Furthermore, the rules are silent as to how long “usable hemp” can sit once it has been tested as an end-product intended for human consumption. Thus, sampling and testing hemp as soon as possible after harvesting to keep total THC potency to a minimum is permissible.
Is it possible to “dilute” the potency of total THC by adding biomass?
Hemp handlers often ask how they can get around THC potency testing limits because smokable hemp cannot possibly test below 0.3%. They ask whether it is possible to “dilute” the products in the packaging in an attempt to reduce the potency. Unfortunately, this is likely not possible. “OAR 333-064-0100” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=270104) dictates the sampling requirements of a compliant testing lab, which must be consistent with “ORELAP-SOP-001 Rev 3.1” (https://www.oregon.gov/oha/PH/LABORATORYSERVICES/ENVIRONMENTALLABORATORYACCREDITATION/Documents/sop-001.pdf) (the “Protocol”).[15] That same rule requires that the lab “ensure sampling will result in a sample that is representative of the batch being sampled.”[16] While there is no legal definition of “batch” in “OAR 333-064” (https://secure.sos.state.or.us/oard/displayDivisionRules.action?selectedDivision=1276), the rules that regulate laboratories, “OAR 333-007-0310” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=253946) states that “batch” means “a quantity of marijuana or usable marijuana from a harvest lot.” The Protocol uses this same definition, stating “batch” to mean “a definite quantity of usable marijuana from a harvest lot.” Thus, mixing biomass into the package will not affect the sampling and potency test results because the biomass is not a part of the usable hemp of which the sample is taken from.
Can an Oregon lab test for CBD only, and not trigger its reporting requirements?
Yes. Many growers and handlers like to obtain additional COAs for their products post-harvest to show a high concentration of CBD, an appealing selling point for the product itself. It is quite common for growers and handlers to ask labs to test for CBD only and to then include such COAs in the package to be transported. OAR 333-064-0110 does not require laboratories to report all test results to the ODA, only “failed” test results. It also requires the laboratory to report test results for all tests conducted as “required” by the rules. Because testing after harvest is only required for usable hemp in its end-product form, any additional testing is not “required” by the rules and is not part of laboratory reporting requirements to the ODA. Testing for CBD concentration after conducting required testing is elective and not subject to mandatory reporting to the ODA.
Recommendations
While there is no explicit ban on the smokable hemp flower market, the practical result of the ODA’s testing scheme prevents most hemp from being able to fall below 0.3% total THC limits set by the end-product testing requirements discussed above. Based on the above, we recommend the following:
The ODA and USDA focus on less than 0.3% total THC of end products, in their final forms intended for consumers.
Subsequent testing for total THC potency must be conducted for usable hemp. This means that smokable hemp flower must be tested at some point after harvest, and before being sold to the consumer. The COA from the lab must show that the batch from which the end-product being sold to the consumer originated tested at less than 0.3% total THC after harvest.
Thus, for the upcoming harvest of 2020, it is recommended to test the crop intended as smokable hemp as soon as possible after harvest. Testing as quickly as possible after harvest increases the likelihood that the useable hemp will test with total THC levels less than 0.3%, and thus be eligible for sale as smokable hemp to consumers.
Any usable hemp that tests hot, i.e. above 0.3% total THC after harvest, is best suited for: (1) extraction and processing; or (2) sale into the OLCC market.
Unfortunately, current regulations do not allow sale of any usable hemp intended for ingestion or consumption by an end consumer with more than 0.3% total THC. According to the ODA, the intent of the regulations is not to deprive farmers of the ability to sell hemp that tests “hot,” but rather to allow such hemp to be further processed into extracts, concentrates, tinctures, etc., during which processing the hemp is remediated to bring the total THC level to less than 0.3%. Importantly, hemp extract will test higher than 0.3% total THC prior to remediation, and thus cannot be transported out of Oregon prior to remediation. There is an Oregon statute specifically prohibiting the export of “hot” hemp outside of Oregon’s state borders.[17] According to the ODA, a violation of this statute is a Class C felony.[18]
For growers and handlers possessing both the current inventory of usable hemp and the upcoming harvest, it is recommended to process the hemp into an extract, concentrate, etc. if the usable hemp test is hot. Alternatively, usable hemp that tests above 0.3% total THC may be sold into the Oregon Liquor Control Commission (“OLCC”) licensed retail market. Sale to the OLCC -regulated market requires compliance with specific procedural steps such as tagging, tracking, and tracing.[19]
Enforcement risk and resulting consequences significantly outweigh the benefits of selling non-compliant hemp.
For hemp sold within Oregon:
Testing labs are required to report all failed test results to the ODA within 24 hours.[20] Additionally, the USDA requires states to have an active enforcement program. The ODA, in conjunction with local law enforcement, is currently the primary regulatory body engaging in active enforcement in Oregon. Since all failed test results are reported to the ODA within 24 hours, it will be extremely difficult to avoid the attention of enforcement authorities. Furthermore, the consequences for selling non-compliant hemp is rather large: the ODA may seize, embargo, and/or destroy the hemp; and the ODA may revoke grower/handler registration. Additionally, the enforcement program also entails random site visits from the ODA[21], during which ODA personnel will verify compliance and proper record-keeping. A determination of non-compliance will result in a letter of reprimand in the registrant’s file. A registrant that receives a subsequent determination of non-compliance during the next site visit will be subject to enforcement action. This active enforcement program coupled with the failed test result reporting requirements makes avoiding enforcement authorities’ attention significantly difficult. Therefore, selling non-compliant hemp in Oregon puts the business’s current and future activities, at risk as the registration authorizing the activities themselves may be revoked.
For hemp sold across state lines:
The Federal Hemp Rules currently state that if hemp is compliant within the originating state, then it may move throughout the country across state lines; any hemp that is not in compliance in Oregon is not afforded this protection.[22] Even though the head of DEA recently stated the DEA has higher enforcement priorities such as opioids and methamphetamines, the risk of DEA enforcement of hot hemp is not zero. Selling non-compliant hemp across state lines can result in serious federal felonious drug charges, as any hemp that has more than 0.3% total THC is no longer legally hemp and is considered marijuana and treated as a Schedule I controlled substance. This federal risk is in addition to the Oregonian statutory violation risk mentioned above. There are also various instances of the DEA stepping in to seize shipments containing usable hemp, even if the attached COA shows compliant total THC levels, to test it themselves and asserting their test results override the original COA. Cultiva Law has dealt with this personally within California, a supposed “hemp-friendly” state.
Find states that only require pre-harvest testing.
Importantly, it may be possible to ship usable hemp with only compliant pre-harvest test results, to any states that do not require testing after harvest prior to sale as smokable hemp. In doing so, a grower can ensure that usable hemp being shipped across state lines is compliant for both the originating state (Oregon) and in the destination state, with only pre-harvest COAs attached. However, this option cannot be undertaken lightly and requires thorough review of the destination state’s hemp testing regulations, as well as detailed plans for transport since, as discussed above, hemp that tests above 0.3% total THC is classified as marijuana by the DEA.
Conclusions
The smokable hemp market is rather vast, and Oregon’s practical ban is sure to affect many growers and handlers who have already significantly invested time and money into that market in particular. Due to the harsh regulatory reality it will likely become best practice to test usable hemp as soon as possible to minimize total THC levels. If the Subsequent Test shows less than 0.3% total THC, the usable hemp may be sold to end consumers both within Oregon and across state lines (with USDA and DEA intervention in mind as mentioned in Section 4(C)). On the other hand, if the Subsequent Test shows more than 0.3% total THC, the most legally compliant option is to process the usable hemp further into an oil, concentrate, extract, etc., or consider selling the usable hemp to an OLCC-licensed retailer.
Please note that Oregon’s Hemp Program is still under review by the USDA and the rules are subject to change. Comment submissions for any future proposed regulatory changes are highly encouraged.
[1] See “OAR 603-048-0600(2)(c)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258101)
[2] Id.
[3] See “OAR 603-048-2300(1) (Emphasis added)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106).
[4] See “OAR 603-048-2305” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258107).
[5] See “OAR 603-048-2300(19)(a)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106).
[6] See “OAR 603-048-2300(44)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106); “OAR 603-048-2300(26)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106)(defining “industrial hemp for human consumption” as “all non-seed parts and varieties of the Cannabis plant, whether growing or not, that pre-harvest contained an average tetrahydrocannabinol concentration that did not exceed 0.3 percent on a dry weight basis, and is intended to be processed and used for human consumption”).
[7] See “OAR 603-048-2300(10)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106).
[8] See “OAR 603-048-2300(3)(a)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106).
[9] Supra Footnote 1; for more information on Pre-harvest testing requirements and procedures, see our memorandum, Updates on Hemp Regulations in Oregon in Accordance with USDA Rules, dated Aug. 24, 2020.
[10] See “USDA Interim Final Rules §990.26” (https://www.federalregister.gov/documents/2019/10/31/2019-23749/establishment-of-a-domestic-hemp-production-program#sectno-citation-%E2%80%89990.26).
[11] See H.R. 8319, 116th Congress §122 (2020).
[12] OAR 603-048-2310(9)(stating: “‘consumer’ includes: (a) A person who purchases, acquires, owns, holds or uses hemp items other than for the purpose of resale; and (b) A person who purchases, receives, or otherwise uses hemp items who is not a registered handler or a marijuana processor, wholesaler or retailer licensed by OLCC.”
[13] See OAR 333-007-0320(1).
[14] See OAR 603-048-2300(3)(a); OAR 333-007-0310(68) (defining “usable marijuana” as “the dried leaves and flowers of marijuana” including “pre-rolled marijuana as long as the pre-roll consists of only dried marijuana leaves and flowers, and unflavored rolling paper and a filter or tip”)
[15] See OAR 333-064-0100(2)(a)(E)(i)
[16] Id.
[17] See “ORS 475B.227(2)” (https://www.oregonlaws.org/ors/475B.227) (stating “a person may not import marijuana items into this state or export marijuana items from this state”). ORS 475B.227(1)(b) defines “marijuana item” to include “industrial hemp products and commodities that contain more than 0.3 percent tetrahydrocannabinol.
[18] Id. The statutory language specifies that any amount more than sixteen (16) times the legal possession limit of marijuana items contained in “ORS 475B.337” (https://www.oregonlaws.org/ors/475B.337) is a class C felony for any person, not just OLCC licensees.
[19] See “OAR 603-048-0500” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258100).
[20] See “OAR 603-048-2300(2)(d)” (https://secure.sos.state.or.us/oard/viewSingleRule.action?ruleVrsnRsn=258106).
[21] See ODA Hemp Program Update and Changes, Youtube, Jul. 9. 2020, https://www.youtube.com/watch?v=0uM4cObAN30&t=220s (last visited Sep. 4, 2020). Additionally, the ODA has stated they will notify the registrant at least 24 hours in advance to the visit in this same webinar.
[22] “USDA Interim Final Rules §990.63” (https://www.federalregister.gov/documents/2019/10/31/2019-23749/establishment-of-a-domestic-hemp-production-program)
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Mio Asami | Cultiva Law PLLC Strategic Legal Counsel | Mio@CultivaLaw.com Office (213) 306-6800 | Direct (213) 460-3456 SEATTLE | PORTLAND | LOS ANGELES | SAN FRANCISCO
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