THC Exemption for Hemp Fiber: Balancing Economic Opportunities with the Need for Clarity

In the rush to capitalize on the booming demand for hemp-based products, lawmakers introduced the 2018 Farm Bill, which created the Industrial Hemp industry. While this was a significant step forward for the industry, it soon became evident that the language of the bill was not adequate to protect the industry from profit-driven individuals who cared little for the industry's welfare. While the "∆9-THC" exemption for industrial hemp farms producing fiber may appear reasonable at first glance, it's essential to approach this exemption with caution and learn from past oversights.

If the 2018 Farm Bill has taught us anything, it's that profit-driven individuals can manipulate inadequate legislation to prioritize their financial gain over the industry's intended purpose of promoting sustainable growth and benefiting people and the planet. When crafting an amendment to the 2018 Farm Bill to create an exemption for ∆9-THC in the production of hemp for fiber or hemp seed for proteins, it is crucial to be vigilant about the language and potential loopholes. By learning from past mistakes and scrutinizing the language of the amendment, we can create a regulatory framework that safeguards the industry and promotes sustainable growth.

Content warning: The following post may contain content that could be considered controversial or upsetting to some readers.

At FSO we understand that some may question my motives for this post, and unfortunately, some may even resort to ad hominem attacks rather than addressing the issue at hand. However, we firmly believe that the true issue at hand is that our industry requires the full support and commitment of all parties involved, including the farmers growing the plant, NGOs and advocates, third-party certifying bodies charged with ensuring the plant's efficacy, and even the government (with the USDA being helpful at the federal level).

As members of this industry, it is our responsibility to approach this topic with objectivity. We cannot allow personal biases or financial interests to undermine the integrity of the industry. We must prioritize the sustainability of the industry and work towards building a transparent and ethical supply chain that benefits not only those involved in the industry but also the planet.

Acknowledging the contribution of long-time advocates and businesspeople in the industry, it is important to also recognize that there are those who prioritize profit over ethics and exploit regulatory ambiguities. As in any industry, regulations are not intended to monitor and control ethical players, but to prevent the actions of bad actors from jeopardizing the industry's future. As such, this post aims to promote the industry's sustainability and integrity by addressing potential issues and ensuring that all stakeholders, from farmers to third-party certifying bodies, are committed to ethical practices. Behaviors like those are detrimental to the industry and its sustainability. We must be cautious when granting exemptions and prioritize the integrity of the industry. We cannot allow a few bad actors to jeopardize the future of this remarkable plant and the hard work put into building a sustainable future beyond mere commerce and financial gain.

We believe it is important to prioritize the sustainability and integrity of the industry as a whole. Therefore, I argue against the THC exemption for hemp being grown for fiber until we have the full support and commitment of the USDA. This includes the allocation of research funding to better understand the potential variables and establishing a specific language for the plant. Without this level of clarity and support, the industry is at risk of being exploited by those same aforementioned individuals that aggressively act on unclarity. By taking a proactive approach, we can ensure the long-term success of the industry and maintain its reputation as a responsible and trustworthy business sector.

LOOKING TOWARDS THE FUTURE

The burgeoning hemp industry has attracted considerable attention and investment in recent years, but its rapid expansion also presents a risk of legal ambiguity and misinterpretation. Unfortunately, the lack of clarity surrounding the 2018 Farm Bill has created opportunities for Unethical individuals within the cannabis community to exploit legal loopholes and gray areas, resulting in the proliferation of unregulated markets and products.

The proposed "∆9-THC" exemption for hemp grown for fiber is likely to further complicate the already-confusing legal landscape of the rapidly expanding hemp industry. One of the key lessons we've learned from the 2018 Farm Bill is that regulators who draft the bill's language often fail to consult the right stakeholders in the hemp industry and ask the right questions, which can lead to misinterpretation of the law. It's time to shift away from lobbyists who have vested interests and focus on the scientific functions of the plant. This underscores the critical need for a clear and comprehensive regulatory framework with specific language for hemp plants. If intentionally constructed with a defined purpose, this framework can ensure that farmers fully comprehend the potential risks and legal implications of incorporating hemp plants for fiber into their crop rotation.

The regulatory framework provides a comprehensive roadmap for monetization for all stakeholders, from farmers producing the plant to processors seeking quality and consistency and buyers and financiers requiring risk management to have confidence in the final product. Beyond addressing the fundamental requirements for regulatory revision, we must also consider the voluntary standards that incorporate chain of custody models into their framework. These models enable transactional certificates for the fiber, allowing brands and retailers to confidently make label claims, which, in turn, enhances transparency and accountability throughout the supply chain. By implementing such standards, we can establish a sustainable and profitable hemp industry that benefits all stakeholders while promoting environmental and social responsibility.

Without proper regulation, the exemption could also facilitate an unregulated market, leading to potential health risks for consumers and legal issues for farmers and businesses. The hemp industry has already witnessed the negative impacts of chemically manufactured cannabinoids, such as ∆8-THC, which have been exploited by legacy players that do in fact advocate for the plant, but prosper in the black markets. Thus, it is essential to prioritize the industry's integrity and sustainability by promoting clear regulations and standards.

Instead, we need solid regulatory framing and/or the introduction of voluntary certification schemes that showcase a farm's commitment to best practices that build up a transparent hemp supply chain, that is traceable back to the origins, and follows the plant's product life with a solid chain of custody documentation during that life. We need to prioritize research funding to better understand the variables behind a potential exemption, as well as establish a language specific to the plant that allows farmers to have the confidence in understanding exactly what they are getting into when adding hemp plants specifically for fiber into their crop rotation.

Until we have the full support and commitment of the USDA to establish a clear regulatory framework and language specific to hemp grown for fiber, it is not advisable to grant the "∆9-THC" exemption. We must prioritize research funding and establish voluntary certification schemes to build a transparent and traceable hemp supply chain, while also preventing the proliferation of unregulated markets and products that can lead to potential harm for consumers and legal issues for farmers and businesses.

INFORMATION ON THE PROS AND CONS OF THE "∆9-THC" EXEMPTION FOR HEMP BEING GROWN FOR FIBER CROPS.

Pros:

1. Increased economic opportunities: The proposed exemption to grow hemp for fiber and protein without recognizing the risks of heightened THC levels could increase economic opportunities for farmers and the hemp industry in theory. However, this exemption raises concerns about shielding billion-dollar companies from association with illicit and illegal cannabis businesses. Without full transparency, aided by chain of custody (CoC) models and validation from third-party certifying bodies attesting to not only the quality but also the farm's overall operations, this exemption may lead to excuses for why the hemp is not selling. Global brands and retailers rely on these attestation letters to make label claims regarding the plant's lifecycle and overall quality, and until these processes are in place, it may be difficult to ensure transparency and avoid potential reputational damage.

Editors notes

While the "∆9-THC" exemption for hemp grown for fiber may seem like a positive step forward for the hemp industry and farmers, it's important to consider the potential risks and impacts of enacting such a policy without proper regulations in place, at bare minimum recognizing the need for transparency, which is one of several factors global brands and retailers use for assurances.

One potential benefit of the exemption is the increased economic opportunities it could provide for farmers and the hemp industry. Without the concern of THC levels, farmers could focus on growing hemp specifically for fiber and potentially increase their profits.

It is crucial to note that the economic benefit of the proposed exemption could be short-lived if the industry fails to support the farms. Pricing premiums should always be a motive behind producing any crop for the farmers, and without proper regulations in place, the industry may face the same pitfalls as other unregulated markets. This could lead to a volatile and unsustainable industry that ultimately fails to provide economic opportunities for farmers. Therefore, it is imperative to establish proper regulations to ensure the longevity and sustainability of the hemp industry.

There are privately developed programs, such as the Responsible Hemp Standard (RHS), created by members of the hemp industry to provide farms with support and understanding of best practices. These programs also allow each farm to demonstrate their commitment to producing certified hemp for global markets. Private voluntary certification schemes have been developed in the past to stabilize high-risk agricultural sectors, such as the palm oil industry in the early 2000s. The similarities between the palm oil and hemp industries include out-of-the-gate huge profit projects, issues at the farm level for contracts, brokers determining pricing strategies, and more. To stabilize the global palm industry, a private organization contracted the team at Peterson Control Union to develop and rollout RSPSO, a voluntary certification program created to stabilize the global palm oil industry. This scheme created pricing premiums for farmers and established a chain of custody model to easily identify certified palm oil compared to non-certified palm oil using CoC models like 'segregation'. Programs like RSPO are based on the success of voluntary certifications in other at-risk markets like palm oil. Programs like RSPO provide a regulatory framework that supports farms and ensures the sustainability and integrity in high-risk industries like palm oil. This out-of-the-box thinking should be replicated to explore new opportunities in stabilizing the global hemp supply chain.

Yes, the "∆9-THC" exemption for hemp grown for fiber may provide increased economic opportunities, it's important to enact regulations that support the farms to ensure the long-term success and sustainability of the industry.

2. Environmental benefits: Yes, hemp can be a sustainable crop with various applications, such as textiles, paper, and construction materials, the potential benefits of hemp growth must be supported by credible systems for validation and verification. Claims of sustainability, watershed management and reduced use of harmful pesticides and herbicides are just that until they are substantiated by trusted third-party certifying bodies. It is crucial that reputable companies participating in the hemp value chain have access to these certifications to ensure the safety and satisfaction of their customers. In this way, the rigorous standards of other global supply chains must also be applied to the hemp industry to garner the support of private financiers and incumbent banking institutions.

Editors Notes:

Without proper regulations and support for hemp farmers, the potential environmental benefits of hemp cultivation could be undermined. Without clear guidelines for sustainable farming practices and responsible pesticide use, the growth of the industry could lead to harmful environmental impacts. Additionally, without regulations in place to ensure that hemp fiber is being produced sustainably, the benefits of using hemp in various products may be limited.

As of 2022, there are programs like RHS under Control Union's supervision that are available to address these concerns and promote sustainable hemp production. These programs have been globally accepted by some of the largest networks that require a certified hemp supply chain to make validated label claims. By providing certification and guidelines for sustainable farming practices, RHS can help ensure that the potential environmental benefits of hemp cultivation are realized. This approach has been successful in other industries, such as the palm oil industry with the Roundtable on Sustainable Palm Oil (RSPO), which has helped to stabilize the sector and promote sustainable practices.

Enacting regulations and supporting programs like RHS can help to ensure that the hemp industry realizes its potential environmental benefits and contributes to a more sustainable future.

3. Sector benefits: It's important to note that designating unique seed genetics for hemp fiber production can provide farmers with greater confidence in their crop and ensure efficient use of their time and resources. Hemp is a versatile plant that offers several benefits such as protein from the seed oils and cannabinoids for health and wellness. It's essential that farmers have access to transparent and specific seed genetics that are capable of producing their desired outcomes, whether it be for fiber production, protein extraction, or cannabinoid-rich strains. By allowing for the cultivation of hemp for fiber production under a THC exemption, we can increase awareness and availability of genetics that are specific to industrial applications.

Editors Notes:

If we do not enact regulations into this industry that support the farms, programs like RHS will be in vain. The hemp industry has recognized the importance of implementing voluntary certifications, much like what was done with palm oil in the early 2000s through the RSPO, to stabilize at-risk markets. Without clear regulations, there is a risk of losing the potential health benefits that hemp-derived compounds like CBD can offer.

Allowing the growth of hemp for fiber could potentially increase the availability of hemp-derived products for use in wellness and health applications. This would not only benefit consumers but also create new economic opportunities for the hemp industry. However, this can only be achieved if regulations are put in place to ensure the quality and safety of these products, and to prevent bad actors from taking advantage of the market. The hemp industry must take cues from other industries and establish a clear regulatory framework to promote the responsible and sustainable growth of this sector.

Cons:

1. Confusion and misinterpretation of the law: If the exemption is granted, there may be confusion and misinterpretation of the law surrounding the use of hemp for fiber. This could lead to legal disputes and uncertainty for farmers and businesses.

Lack of clarity around THC levels: If the exemption is granted, it may not be immediately clear what THC levels are considered acceptable for hemp grown for fiber. This could lead to confusion among farmers and businesses, as well as law enforcement officials tasked with enforcing the law. For example, if the threshold for acceptable THC levels is not clearly defined, farmers may unknowingly grow hemp that exceeds the limit, leading to legal disputes and uncertainty.

Misidentification of hemp plants: Another potential issue is the misidentification of hemp plants. Since hemp plants grown for fiber are not required to be tested for THC levels, it may be difficult to differentiate between hemp plants grown for fiber and those grown for CBD or recreational use. This could lead to legal issues if hemp plants intended for other uses are misidentified as fiber hemp.

State-by-state regulations: Currently, the regulation of hemp and CBD products is largely handled by individual states. This means that there may be differences in how hemp grown for fiber is regulated from state to state, leading to confusion and uncertainty for farmers and businesses operating in multiple states.

2. Risk of contamination: While hemp grown specifically for fiber destined for the textile/garment industry or other commercial applications typically contains very low levels of THC, there is still a risk of contamination from other hemp plants with higher THC levels through outcrossing. This poses a significant legal and health risk for farmers, businesses, and consumers alike. Global brands and retailers that are interested in investing in the industrial hemp fiber sector, specifically for the textile and garment industry, take this risk into consideration. Even one accusation on social media of an illegal grow operation where industrial hemp grown under the "THC Exemption" clause was found to be a high ∆9-THC grow can expose these brands to unwanted legal and reputational risks. It is imperative that the industry takes measures to ensure the purity and consistency of fiber hemp genetics to maintain the trust and confidence of stakeholders in this emerging market.

Editor Notes:

The lack of best practices in place to ensure the quality of the crop is a major issue in the hemp industry. The Responsible Hemp Standard's 'know your neighbor' program is an example of a best practice designed specifically to address the risk of contamination from other hemp plants. Without such programs, there is a risk of cross-pollination from unknown origins that could result in higher THC levels and legal issues for farmers and businesses. In addition, there is a potential for health risks to consumers if products with elevated THC levels make their way into the market. Therefore, it is important to have strict regulations and best practices in place to ensure the quality and safety of hemp-derived products.

3. Public perception: The exemption could lead to confusion among the public regarding the difference between hemp grown for fiber and hemp grown for CBD or recreational use. This could lead to negative public perception of hemp, which could impact the growth of the industry.

Potential Issue:

Without a standardized language or regulatory framework that closes legal loopholes and gray areas, some individuals within the cannabis community may exploit these gaps for their own benefit. This can create challenges from a negative optics perspective, making it critical to implement action items like standardized language that closes the loop on gray areas.

Public perception: The lack of clarity surrounding the exemption for hemp grown for fiber could lead to confusion among the public regarding the difference between hemp grown for fiber and hemp grown for CBD or recreational use. This confusion could cause negative public perception of hemp, which could have a damaging impact on the growth of the industry.

Editors Notes

To address these concerns, I think that it is important to establish clear language and a regulatory framework that ensures hemp grown for fiber is clearly distinguished from other varieties of hemp. This will help to eliminate confusion and provide a framework for enforcing regulations, which will help to safeguard the industry from exploitation and negative public perception.

We believe in the potential of the industrial hemp space to create economic opportunities for farmers and businesses, while also promoting sustainability and innovation. Our team is dedicated to navigating the complexities of this evolving industry, and we welcome anyone interested to reach out to us for more information and support.

Let's work together to build a thriving and responsible hemp industry for the future.