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Hemp regulations in the U.S. and Texas
Changes in the cannabis regulations of the United States has always been an interesting observation to investors of the global cannabis market local hemp growers. Right from the Controlled Substances Act of 1970 that banned the cultivation, use, and distribution of cannabis products, U.S. regulation on cannabis has been changed significantly to decriminalize hemp production and distribution under the provisions of three different regulations—the 2014 Farm Bill, 2018 Farm Bill and U.S. Department of Agriculture (USDA) Interim Final Rule on hemp production. The highlight of these regulations includes a differentiation between cannabis products and hemp—hemp was statutorily defined as an industrial variation of the Cannabis sativa with not more than 0.3 percent THC content.
On June 10, 2019, House Bill 1325 was signed into law by Governor Greg Abbott to comply with the provisions of the 2018 Farm Bill. Provisions of this bill authorized the production, retail sale, and inspection of hemp grown in the State of Texas. Announced in October 2019, the USDA’s Domestic Hemp Production Program outlined the provisions of the Department of Agriculture to approve plans submitted by States and Native American tribes for the domestic production of hemp. In some ways, the Interim Final Rule on hemp production modified a few provisions of the Farm Bills and presented a platform for increased local production of hemp. States and the general public were expected to comment on the provisions of the Interim Rule, pending the publication of a final version of the rule. Subsequently, the Texas Hemp Plans were approved by the USDA on January 27, 2020.
This approval automatically grants the State of Texas a legal coverage under the USDA’s Domestic Hemp Production program. However, the growth of industrial hemp was still banned, pending the release of an official publication by the states on the regulatory guidelines on this subject. The guidelines to be released are expected to dictate the terms for licensing, production, plant testing, seed certification, background check fees, and inspection schedule. As announced by officials of the Texas Department of Agriculture, the guideline draft, which must be in compliance with the federal guidelines, was not expected to be completed until later in 2020.
Texas hemp regulations
The Texas Department of Agriculture’s hemp regulations were released in early 2020 with different guidelines published in the Texas Register. As contained in this publication, interested farmers are expected to obtain a license granting the applicant a legal backing to handle hemp in Texas. Applicants are also required to register at least one facility for the production of hemp. A lot permit subsequently grants a licensed farmer the authorization to cultivate one hemp unit of an approved variety in a region in Texas. The guideline framework separates the licensing procedure and fee for different facilities and lot permits. When harvesting the crops on a licensed lot, the farmer is expected to apply for a new license to cover the growing season. The online application process opened to all interested farmers from March 16, 2020, to be reviewed by the TDA licensing Division.
Hemp growth trend in Texas
The Texas Hemp Regulations are in their infancy, with different farmers still experimenting with the best growth conditions that yield maximum output. The TDA included no information about the best growth practice as applicable to the soil and weather conditions in Texas. Several non-profit organizations and groups advocating for the Texas hemp program within Texas have rolled out plans to assist farmers in this new venture. The Texas Hemp Growers Association (THGA) has a 2020 Outlook plan centered around conducting different seed trials across the state. This plan is aimed at developing a verified stance on seed varieties that optimally grows in different regions of the state. Seed yields, cannabidiol percentages, fiber quality, and environmental sustainability are expected to be documented for the soil types in different regions of the state.
With a globally increasing demand for hemp, a cannabis growth rush is expected to surface in Texas within the next few months, with farmers expected to secure licenses for different varieties of hemp. The Texas hemp rush is expected to drive farmer’s interest in hemp cultivation as the value decline in commodity crops is reported to have been consistent for a long time. Hemp is a major commodity in a market used to produce paper, sunscreens, clothing, essential oils, and soap. With the potential to offer higher profit margins when compared with traditional commodity crops, hemp is fast regarded as the new agricultural gold mine by many farmers.
Texas contributions to the global hemp market
According to experts, Texas has been receptive to the cannabis culture, with many high-ranking state officials publicly supporting the federal drive for domestic hemp production. This is connected with the fact that Texas was among the first set of states to have submitted a proposal to the USDA as prescribed by provisions of the Interim Rule. As demand increases tremendously, the cannabis market needs every cache of product it could get. The U.S. and Europe are the two biggest players in the global cannabis market. With the USDA’s Interim Rule, the United States’ contribution to the global cannabis market is set to reach a new high in subsequent years.
Although there are different projections on the potential valuation of the Texas hemp market, as the state’s hemp program kicks off officially in 2020, market analysis experts have warned that farmers should not hope for a sudden valuation yield. Over the decade, the valuation of commodity crops has experienced consistently changing trends, and the hemp market is expected to join these trends as there are many indications suggesting points of hemp market saturation. All over the world, cannabis regulations are expected to keep changing as the cannabis market keeps expanding on all fronts.