- Thank you, George, I appreciate that.
So George is our moderator
extraordinaire today
so I appreciate you taking
the time to do this.
And I just wanted to welcome everybody.
I know there have been
a lot of questions about
the transition coming up at
the end of the pilot program
so I just wanted to take
some time today to go through
some of what's coming up,
some of what we see coming up
and again, just thank you all
for taking the time to be here today.
This is gonna be recorded,
and we will have it posted
on the extension hemp
portal in the next few days.
So if you need to leave early,
or you're coming in later,
just know that it will be
recorded and we will post it
so it'll be available to everybody.
So just, first I have two disclaimers.
I am an attorney but
in my role in Extension
I'm not giving legal advice.
So none of this is to be
construed as being legal advice
or a legal opinion,
it is for informational
research purposes only.
My other disclaimer because
the law is still in flux,
it is still changing, and
this is especially for folks
who are watching this as a recorded video.
Today's Friday, August
21st and the information
we're providing today is
accurate, it is up to date.
If you're watching it after this date,
just be aware that things may change.
So again, the best way
to find those updates
is gonna be on the Extension Hemp Portal.
So there are two main questions
that I wanted to cover today.
The first is when does
the pilot program expire?
And the second is what's gonna happen
when the pilot program expires?
So if you are just getting
into hemp right now
and you're looking at
starting a hemp business,
I would say that this is
not necessarily the place
to learn about how to do that,
this is really geared for folks
who have been in the
program, they wanna know
what's coming up in the
next couple of months.
If you are just getting started,
this is also good information for you too
just so you are aware of
what you're getting into
because the law again is changing.
So one of the things I wanted
to start out with today,
and I know that this might be frustrating,
but we don't have definite
answers right now,
I know the pilot program is gonna expire
in about two months, or I
think that that is likely
that it will expire in about two months.
So the main purpose of
this presentation today
is to provide you information
so that you can make
the most informed decisions possible
as we're coming up to the
end of our pilot program.
So again, if you are gonna walk
away at the end of this hour
thinking, I don't have
a definitive answer,
this wasn't worth my time,
that is my upfront disclaimer right now,
just to let you know
what we're gonna be talking about today.
And I am going to
explain why we don't have
a definitive answer for you today.
The other thing that I wanted
to note before we get into
more of the details is
I use the expression,
the end of the pilot program,
technically that is accurate.
But I realize now when I
say that that sometimes
people think that means
that they're no longer
gonna be able to grow hemp
at all in North Carolina.
That is not the case.
And again, I will explain this
as I go through my
presentation but we are under
a certain set of rules
and regulations right now
under the North Carolina
Industrial Hemp Pilot Program.
The pilot program itself
is likely going to be
expiring at the end of
October and at that point,
we will be going under
a different set of rules and regulations.
The part that we don't
know right now is exactly
which rules those will be,
I think we have a good idea
but we don't know 100%.
So I just wanna be clear about that again,
at the end of October
when the pilot program
will likely expire, you still
will be able to grow hemp,
we're just not sure under
which particular set of rules.
So a little bit background
and a lot of you on this call
are probably familiar with this already.
As I said before, we are operating
under our pilot program,
it was authorized under
the 2014 Farm Bill.
We are in our fourth growing
season here in North Carolina
and right now we stand at, I
think about 1500 licensees.
So in four years, we have
grown a lot and I am very aware
that folks have invested a lot of time
and a lot of money and a lot
of effort into this program.
To give us context for where
we are today in the law,
I just wanted to talk
about the federal law,
because we really are at
the intersection of a change
or transition between the 2014
Farm Bill and 2018 Farm Bill,
both of which are federal laws.
And we're also at this
intersection where it gets
really more complicated
because it also intersects
with our state law here in North Carolina.
So for context, and background again,
pilot programs were authorized
under the 2014 Farm Bill
which is a federal law, it
did allow states to create
their own industrial hemp pilot programs.
And again in North Carolina,
we created ours four years ago
and that's what if you
have a license right now,
you're growing hemp in North Carolina,
you are operating under this program.
This is also the law where we
got this definition of THC,
as needing to be below the .3% threshold.
So that limit is set by
the federal government,
it was set by Congress.
If you jump to the 2018
Farm Bill, it expanded the,
expanded hemp and what
you could do with hemp,
in particular took hemp out
of the definition of marijuana
in the Controlled Substances Act
so it's no longer considered to be
a Schedule I controlled
substance and that opened up
a lot more opportunities in terms of
getting into the hemp business.
The other thing that it
said very exclusively
on the 2018 Farm Bill is that
hemp is now to be considered a commodity.
So what that does is it
allows other federal programs
and grant funding and other
opportunities to be available
to the hemp industry.
I will say though, as we all know,
there are definitely still restrictions.
There are certainly
restrictions on hemp that
don't exist on other commodities.
So for example, I don't know
of any other commodities
that you have to have a license to grow
and that get tested
for compliance testing.
So we know that there are
some more restrictions,
but technically under the Farm Bill,
it is now considered to be a commodity.
So also under the 2018 Farm
Bill, Congress gave the USDA
authority to administer what is known as
the Domestic Hemp Production Program
and USDA published what's
known as Interim Final Rule,
I'll refer to that as the
IFR, and that was published
on October 31st of 2019.
That date is really important
because that date sets
a certain timeline or a certain
trigger for other provisions
under that Interim Final Rule.
So that's why that date
is really important.
The other thing that the
Interim Final Rule said
is that for the 2020 growing season,
states who already had
an existing pilot program
were allowed to continue
their pilot program
through the 2020 growing season.
And again, this is under
the 2014 Farm Bill.
So again, we have this
intersection, where we have
some of our authority for what we're doing
under the 2014 Farm Bill,
but we are transitioning
over still into the 2018 Farm Bill.
The other thing that it said
in the Interim Final Rule
is that state pilot programs expire
one year after USDA's rule was published.
So that is why I keep saying
that our pilot program
is gonna expire at the
end of October this year,
that comes explicitly out
of the Interim Final Rule.
So also under the Interim Final Rule,
it gave USDA two years
develop a final rule,
and it says that states
may submit a state plan
for hemp production to USDA for approval,
it did not say that states have to
or that they're required to,
it gives states the option
of doing so if they wanted to.
It also provides a
framework for what states
have to put in their state plan
if they do wanna submit one.
So I'm not gonna spend
a lot of time on this,
our second speaker, Paul
Adams from NCDA Hemp Program
is going to be talking
about this in more detail.
But just to give you an idea, it does say
that states have to have
certain licensing requirements,
they have to have ways to track land,
they have to have a
plan for testing for THC
and disposal of plants that test high.
Those are all things
out we also have already
under our pilot program, but there will be
changes to some of these things,
which is why I wanted to mention them.
I'm also gonna let Paul
cover some of the issues
that we think will come up under
the USDA's Interim Final Rule.
But I just wanted to flag for you,
we do know that there are
some issues but again,
Paul will get into more
of this in detail later.
So again, as I said before
USDA's Interim Final Rule
says that states may submit a state plan
if a state doesn't have approved plan,
and the other piece of this
that's really important is
if they don't intend
to submit a state plan,
then growers can apply
directly to the USDA
for a three year license.
However, growers can apply
for license from USDA
if state intends to submit a state plan.
So right now, in North
Carolina, growers in our state
are not allowed to,
to apply directly to USDA for a license.
So this is why the North Carolina
Farm Act was so important
a lot of people know this as SB 315,
so some of you who have been
following this for a while
may remember, this bill was introduced
in our general assembly
here in North Carolina
last spring, I believe, in 2019.
And there are a lot of
different provisions in there
specifically about hemp.
One of the things that was in that piece,
I mean, sorry,, that was in that bill
was that it would have
given authority to MTBA
to submit our state plan to USDA.
However, for folks who
have been following this,
the General Assembly did pass our Farm Act
in June of this year.
However, before they passed it,
they stripped all the
hemp provisions out of it.
So that authority that NCDA
needed, the legal authority
they needed in order to
submit our state plan to USDA
was not given to them in that Farm Act.
So again, it's August 21st,
of 2020 and right now,
NCDA doesn't have legal
authority to submit a state plan.
And I'm having trouble
keeping up with everything
in the chat, I will look
at those questions later.
But I saw somebody had asked
why don't we submit a state
plan, that is the reason.
Because legally that's
where we are right now.
And yes, one of the other
things that was in that bill
was a potential ban on smokable hemp.
So I also wanna mention
that because again,
all of the hemp provisions
were stripped out of the
2019 Farm Act or SB 315
so there was never a ban
on smokable hemp in North
Carolina, there is not currently
a ban on smokable hemp in North Carolina.
So I wanna be really
clear about that also,
'cause I know there's been
some confusion about that.
The other piece about the
timing and the legal issue
that we're running into
is that USDA has said
state plans need to be
submitted by mid August
in order for them to be
reviewed and in place
by the end of October.
Once the state submits a
plan, a state plan to USDA,
USDA reviews and then they
will either approve it
or send it back to the state for revisions
and they have said
fairly clearly that they
would like statements to
be submitted by mid August
in order to have them in place
before the end of October
when the pilot program expires.
So just as a result of
everything I've talked about
the North Carolina Pilot Program
again as far as I am aware
today with the best information
that I have available today,
it looks like our pilot
program will expire
at the end of October this year.
That means that licenses
that have been granted
under the pilot program will expire.
And again, as I said before,
we have 1500 licensees.
At that point, growers would need to apply
to the USDA for a license.
We don't have details right
now on what that transition
is gonna look like.
So for example, if your
license is gonna expire
at the end of October, if you
apply to the USDA right now,
again because we have a
valid pilot program in place
and they don't allow dual licensure,
you wouldn't necessarily
get one from USDA today.
So I know NCDA has been working hard
to come up with the details.
I know, they're aware
that this is an issue,
we're all aware that this is an issue,
everybody is working
hard to make sure that
we don't end up with a gap in licensure.
And I realized how important
that is for our growers
and everybody in the industry
to be able to stay in compliance.
And Paul will probably talk
about this a little bit
in his presentation as well.
The one possible alternative
to what I've just talked about
in terms of our pilot program expiring,
it is potentially possible
that Congress could authorize
USDA to extend pilot programs until 2021
or they could extend them
until the Interim Final Rule
is passed, which again
should be sometime in 2021.
However, I don't have a
sense of how likely that is.
There was some language in
the appropriations bill,
I believe it passed through the house,
it has not passed through the Senate.
And again, I don't have a
crystal ball, I don't know,
I'm not really a gambler either,
or I'd buy more lottery tickets.
But I don't have a sense
of how likely it is
that this will pass.
And that's the reason why I
say I think our pilot program
is likely to expire at the end of October,
because there is some possibility
that Congress would act
and authorize USDA to
extend the pilot programs,
and that would impact North Carolina,
it would also impact a
number of other states.
There has been support
for doing this from NASDA,
the North, sorry, the National Association
of State Departments of Agriculture,
I know there's also been
support for doing this by NCDA,
but again, I just don't have
a sense of how likely it is.
So just a quick summary,
hemp is still legal,
you will still be able to
grow hemp in North Carolina,
even once our pilot program expires.
We just don't know 100% yet
what those rules are gonna be
and what licensure is gonna look like
after our pilot program expires.
Again, a lot of the confusion
in terms of what's happening
right now is because
we are in this transition
between federal law
and between the 2014 Farm Bill
and the provisions of the 2018 Farm Bill.
And then we have this added
complication of our state law.
So it is fairly complicated but I will say
if you are growing in North
Carolina right now, today,
you still have to follow
the laws of our state,
and you still have to follow
the rules of our pilot program
in order to be in compliance.
Technically, you're still
growing for research purposes,
and you still have to have
a license to grow hemp.
The one thing I will add
is proceed with caution.
So again, whether you are
growing hemp right now,
or this is something
you're looking to get into,
just please be aware
that things are changing,
they're changing pretty quickly.
The changes that we are looking
at under the USDA's rule
will be, I will say fairly significant
from what we're operating under right now.
And that's why I wanted to
have this webinar today.
And why I invited Paul
Adams to come speak.
So again, he will be talking more about
what those changes will
potentially look like.
And proceed with caution,
know that there are risks
again, when the laws so much in flux,
there are certainly risks
and I will repeat something
that I said in almost every North Carolina
Industrial Hemp Commission meeting,
don't invest more than
you can afford to lose.
We do have some resources available,
our Extension Hemp Portal,
the website is up here,
Industrialhemp.ces.ncsu.edu.
Again, it's industrialhemp
one word, .ces.ncsu.edu.
I am trying to post legal
updates as soon as I get them,
if you don't see anything,
it's because I haven't heard
of an update to the program yet.
You can also subscribe to our hemp portal.
So if you go to that
website and scroll down,
there is a button on the right hand side
that says subscribe, you will
get updates so every time
there is a new posting, you
will get an email the next day.
I've also put the link here for the
USDA-AMS Domestic Hemp Production
Program, you can go there,
they have a resource
available for all the states
that have already submitted state plans,
they have those listed
and if states have said
that they're operating
under their pilot program
for this year, you'll
see those listed as well
and USDA does seem to be updating
those on a regular basis.
So you can also look at
the interim final rule,
there's a link there for the IFR as well.
And then if you wanna
contact me, you can do so,
at my email's is M-A-C-O-I-T@ncsu.edu,
You can call me at 919-515-4523,
David Suchoff is our production
extension specialist,
his information's here as well.
And we have a group email
for a number of folks
who sure have responsibilities on campus
if you wanna email us,
I also have that link available.
So thank you very much.
I am going to turn it
over to Mr. Paul Adams.
- [George] Hey Marnie, before you go,
do you wanna look at some
of these chat questions?
It seems that there's a lot around this,
kind of this gap period between
our pilot program expiring
and then what happens when it does.
- So I think Paul is gonna touch on that.
- [George] Okay.
- Yeah, George, I'm going
to, I've written down
all the questions that
I've seen in chat thus far
and I'm going to try
to address all of them,
most of them will be in the
course of my discussion, so.
- [George] Perfect, thank you, Paul.
- And then before I turn it over to Paul,
for folks who have
questions, my plan for today
was to talk for 20 minutes
and I pretty much made that.
Paul will also talk for 15 to 20 minutes
and then we have some
time at the end for Q&A.
So we will answer your questions
and I will turn this over to Paul.
- Good afternoon everybody.
Just bear with me while I
get everything underway here.
I do have a presentation
for you guys to look at
so you don't have to stare at me
although I will keep my video chat up.
So you know you're getting it straight
from the horse's mouth so to speak.
George, can you see my
screen appropriately?
- [George] Looks great, Paul.
- Wonderful, okay, everyone.
I'm hopefully going to
give you a little bit more
information than you had yesterday,
but again as Marnie said,
I will just give you
the disclaimer that
there are a lot of things
that are in flux right now
and unfortunately that means
that the ability for me
to give you a concrete
answer is not necessarily,
it's not necessarily possible right now.
So my goal is to tell you
about, where we've been,
and the possibility for where we're going
and to try to explain
how that might happen.
We, anybody in this chat
that's been a grower,
you know all of this information.
You know what hemp is and how we define it
as cannabis sativa, et cetera.
By now, you should know
that the NCDA is responsible
for applications, amendments,
trainings and outreach
just like what we're having right now,
and most importantly, compliance testing.
The authority for this
program, as Marnie said,
comes not only from the 2014 Farm Bill,
but soon to be the 2018 Farm Bill,
although we do still
operate under the former.
There are general statutes
and rules approved and passed
by our industrial hemp commission
that govern this program.
And while they're not
perfect, I would prefer
if we could stay under those
as opposed to the Interim Final
Rule as published by USDA.
And without a doubt, the single
most important interaction
that we have with growers is
by far compliance testing.
And I'm gonna spend most
of my time talking about
how our program and their program differ.
Which is certainly some of
the reason why North Carolina
doesn't have a plan at this moment.
Well, we have a plan,
but we have not formally
submitted one to USDA.
This is our license, you all
know what that looks like.
And I'm not going to belabor this
'cause Marnie did a
wonderful job going over it,
but, the 2014 and 2018 Farm Bills
is really where all of our authority
for industrial hemp come from save for
what has been given to
us or not given to us
by the General Assembly and
so we don't currently have
the authority to submit a state plan.
So that's absolutely the major
reason for why we haven't.
But in general, there are
some points of conflict
that we the NCDA have with
the plan as given by USDA.
And even if we submitted a plan to USDA,
their Interim Final Rule
specifies very clearly
that we can only be more restrictive
than the rules that they've
given us, and not less.
And again, we have some major conflicts
between our current procedures
and what the USDA would have us do,
and most of that revolves around testing.
So for my existing growers, you know that
its your legal obligation
to alert us, the NCDA
when your material goes into flower
for compliance testing to occur.
Now, the NCDA can currently
opt not to test which we have,
some people received compliance
testing waivers last year
because of our, because
of how busy that we were
and our general inability
to get to everyone,
as many as there were, we took
nearly 2500 tests last year
with about seven people.
So we were extremely
busy and that caused us
to experience some delays and
we ended up issuing waivers.
So, but we can opt not to test
and that's very important.
We do not currently have
a requirement to test
every grow for every grower.
So that's also very important
when it comes to labor
and the ability of us to service
the hemp growers in North Carolina.
Currently, we sample at
approximately mid flowering,
so that's 21 to 35 days,
roughly before harvest
and we sample flower from the
top one third of the plant,
it's not everybody agrees
with but as regulators,
our goal is compliance and
while THC may be higher
in those cola buds that's
what we're here to do
is to ensure that you're not
growing marijuana in any way.
We take numerous cuttings
from fields and greenhouses
to make a composite
sample that's at any scale
and we are looking
specifically at Delta-9 THC
after decarboxylation has occurred.
So while I did see in the chat that
it is delta-9 in the statute,
North Carolina's interpretation
is that would include
any THC-A that would
contribute to that overall
Delta-9 value for that material
and we have always tested
that way since day one
so I hope that answers that question.
When your material's tested,
those samples are heated
and it is a total value
that we get at the end.
It's always been that way
and considering that USDA
is going to mandate that that
is the way testing will occur
if the pilot program ends that is exactly
what you will have to
deal with them as well.
Based on our testing data, some of you may
or may not know this, we
round anything above 0.300%
but less than 0.4% down, so
by our current standards,
0.39% would pass and the
reason we do that is because
if you were to take one
sample and distribute that
across several labs,
you would get variations
in test results.
And so that's why we give
you that bit of leeway there.
Currently, there are three
tests available for our growers.
The initial test that you
request, a confirmatory test,
which is free, that we carry
out should your first test
not pass, and then finally
a requested retest,
which you do have to pay for.
But at any point, if any
of those are compliant,
then you and your material
would be compliant,
which is something that
you will see varies
between our plan or our existing rules
and the Interim Final Rule
that USDA is publishing.
And finally, we do not
have a negligence policy
or penalty if a grower
tests above the limit,
as long as they comply
with the destruction,
which we don't like doing but
that is what the law requires.
And there's no policy that
says that if you do that
X amount of times in a given period,
that your license is revoked.
And that is also going
to be very important
as we continue this discussion.
So, I think this is really
important and I think
it's gonna give you some context.
But this is our sampling
data for the last four years
or three years and this year in partial.
We only took 135 tests of which 14 failed.
This is about 10 and a
half percent fail rate,
that was in year one and we
only had about 100 growers
at that point in time.
In 2018, we took 437 tests,
which 47 failed, which again,
is about 10 and a half percent.
And at the end of 2018,
we had somewhere between
350 450 growers so the program
nearly tripled in size.
And then in 2019, we took
over 2247 tests as well
as a good number of
waivers, hundreds in fact.
250 failed, which is again
about a 10% fail rate.
So we've been really consistent
over these past three years
and this year so far
we've, although this number
is significantly out of date,
when I put this together,
about 240 tests of which had
12 failed, which is about 5%.
I suspect by the end of the season,
we'll be much closer to 10%.
A lot of people ask
me, why do people fail?
Well, poor genetics is
likely the main cause.
We're chasing CBD or CBG, which,
at least in the case of CBD
is very closely tied to THC content.
And quite frankly, to get really high CBD,
the genetics that will do
that are probably not capable
of passing compliance
at the end of the season
after it's been harvested and cured
and I think anybody who's been
working in the CBD industry
has realized that 0.3% is
a very, very tight margin,
even for our current
testing standards, and so
it's just a an ugly
part of this whole thing
that people are going
to fail at some point.
So let's talk about what the USDA
has in their Interim Final Rule.
So they have a legal
requirement for growers
to report harvest date,
so that you can be tested.
And what I mean by that
is, they have mandated
that you will have to be tested
within 15 days of harvest.
So you'll have to say,
I'm going to harvest on,
let's just say today 8/21,
and within two weeks of that,
so going back basically to the seventh,
sometime between the seventh and the 21st,
you'd have to be tested and if not,
then you'd have to be tested again.
And as we know, THC content increases
throughout the growing, flowering period
and is known to increase more
significantly at the end.
So they're basically
mandating that when times are
basically the most difficult,
I would say, in my experience,
and THC content is most likely to be high,
they're mandating testing
occurs at that time.
They're also mandating that every grower
and all of their lots be tested.
As I told you last year,
we ended with about
1300 growers per se, took over 2000 tests
with about seven staff and
we did not get everyone
nor did we get every single lot.
And so in order to do that, it
would be an extreme hardship
for us to be able to do that,
especially on a 15 day timeframe.
For anything one acre or less,
the USDA's current sampling
plan says that they can
take one plant, it's a
very low sample size.
We take more than that,
and while I know that
you don't appreciate us
taking your material,
I think that in doing so
it's more representative
and that you are less
likely to have an outlier
that skews your test results.
They are going to require
Delta-9 THC to be measured
post decarboxylation,
just as we already do.
So in that way we are similar.
USDA is mandating that there
is basically a calculation
of possible error for every test result.
So as an example, your
test report might say 0.34%
plus or minus 0.3%.
In that example, that
sample would fail at zero
because 0.300% is not within that range,
which is what they've mandated,
there is no up to 0.39
based on our current
standards, so that would be,
it's a very small margin to
hit at the end of the season
when things are most turbulent
and that's going to result
in a lot more failed tests
and a lot more destructions
which is not something
that we would like to see for our growers.
Based on conversations we
had earlier on with the USDA,
it doesn't seem like we would
be allowed to retest you.
So if you fail, it seems
like that's your only shot,
you get one chance and not any more.
They also have instated what
is known as a negligence,
a negligent violation.
So that would mean
testing at 0.5% or higher
would result in a negligent violation.
If that happens three times
in a five year period,
then your license would be revoked.
It's not a question of if
but when in a lot of cases,
especially for breeders
who are trying to develop new strains.
So I think that that really illustrates
some really key differences
that we don't necessarily agree with
and that I think would
cause a lot of people
to lose a significant amount of money,
especially in a program that's
been around for four years,
with as many people and as many acres
and greenhouse square feet as we have.
So, that being said, this is
what we're hoping to avoid
more of, and I fear that
under USDA guidelines,
there would be a lot more of this.
So just to illustrate
sort of the sort of impact
that hemp has had on
North Carolina, this is,
this data is a year old and
our program has probably
doubled since that time.
And this is growing and storage locations
across North Carolina
and you can see it covers
pretty much the entirety of
our state, it's a big deal.
Here it is visualized a
different way, counties in red
have really high densities
of growing locations,
and the ones that are in blue
don't have any hemp at this
time, or at least didn't
at that point, and so may have so again,
hemp has spread rapidly
through North Carolina
and a lot of people are really
trying to give it a shot,
they've really poured a lot
of money and time into this.
And lastly, these are again,
hotspots for hemp growing
and activity here and I hope
to have these maps revisualized
so hemp is a big deal here and
it's really set in quickly.
I will hopefully, momentarily,
get to more of these questions.
But moving forward,
again, as things today,
which is things stand
today, which is the 21st,
not the 19th when I originally wrote this,
it appears we will be under
the federal guidelines
come November 1st, unless Congress acts
and expands the pilot program.
So we as an agency, have been
advocating as hard as we can
to Congress, through our channels
to extend the pilot
program and as Marnie said,
there's been some positive
movement but nothing is official.
Lastly, as it stands,
North Carolina growers
are not yet able to apply
to the federal program
and it seems that grandfathering
in will not be an option.
We are working to figure out exactly how
that transition will occur if it must,
and what will be the protocols
for our existing growers.
So, while I leave this slide up,
I don't really have a
lot else for you today,
other than to answer your questions.
I'm gonna scroll through the track and see
what these questions are and try to answer
some that I've already seen.
But Phil Wilson is the
director of Plant Industries,
he's my direct supervisor.
That's all of his contact information
as well as our hemp website.
You should already have
NC State's hemp portal,
there's an email that
you can reach them at.
And then lastly, that's my information
and how that you can get
more information should you need it
or if you need to reach out to me.
So, if you'll hold tight,
I am going to try to answer
some of these questions.
So one of the questions
that I saw early on
is somebody asked whether
the growing season would,
is considered the end of the calendar year
or perhaps the October 31 deadline.
So, under our pilot
program, which will last
until October 31st
unless something changes,
you are subject to our rules,
the NCDA rules that I have
shared with you today,
at least in terms of testing.
If you were to apply
to the USDA right now,
and were you to be approved,
which we've discussed,
that's currently not
possible, but were you,
as soon as you are approved,
you would be subject to
their rules, not ours.
So I would suggest that anyone
who has material right now,
you should harvest before October 31st
if at all possible.
Now for you greenhouse
growers, that's gonna be
a little bit more difficult
because you may not be
appropriately in your cycle of harvest
at that point in time.
But by harvesting
at or before October 31st, you ensure that
the rules that you have to
comply with are the ones that
you're familiar with and the
ones that we have in place now.
And so hopefully that
answers your question,
if you wait till after November
1st, or you were to acquire
a USDA license, then that would mean that
you would be subject to the
rules regardless of whether,
regardless of pilot program,
you would be subject
to their rules, and it would
have to be done that way
or it would be non compliant.
I know that a number of people early on
asked what our plan was,
our plan, which we have
several contingency plans
is if at all possible
to extend the pilot
program and if it cannot,
then we will facilitate your transition
to the USDA's program because
that will be what is left,
that will be the choice.
The only choice that is left
and so as to what will happen
after October, which I
know was another question,
as it stands today, it
seems like we will be under
the USDA's Interim Final Rule
and subject to their rules
at October, unless, again
Congress takes action
and extends the pilot program.
I believe that Gary Cross asks,
if there would be a refund
on fees for existing licensees.
In order for you to have
material in your possession,
you will have to have a valid license
and that might mean that you've
paid a renewal fee recently.
You would have to do that
in order to legally have it,
else, your license would
expire and so while,
yes, you will probably not
get a full year out of that,
there is no refund option at this point.
If that becomes available,
that information will be
distributed to you all.
As soon as that is, as
soon as we know that,
but as it stands, no, I don't believe
there will be any refunds.
So as far as,
I know there's been some
questions about processors,
there's really not a lot
of information there.
USDA as well as NCDA has mostly dealt with
a cultivation side so from the point where
you want information to the
point where you get a license
and then cultivation to the
point of compliance testing
and then getting,
getting your compliance
test and then marketing it.
And as soon as you
market it, that becomes,
that becomes basically
what would effectively be
Food and Drug under their
purview at that point in time.
If you recall, Marnie had
mentioned that the hemp provisions
were stripped out of SB 315.
Some of the provisions
included in that or provisions
that would have allowed our own
Food and Drug Protection
Division here in North Carolina
to actually provide
governance over the sale
and potentially offer
protections to processors.
And so that is not available again,
because it was stripped out of the vote
and it has not been taken back up again.
So I'm just taking some
time, I don't know,
Marnie, if you've seen any questions
or if there's anything that I haven't?
- [Marnie] I've been trying to
answer some of them in chat.
I know you've answered that
question about refunds.
If folks have additional questions,
'cause the chat is fairly
long right now, and again,
I have been trying to go through it.
But if you have questions and
we haven't addressed them yet,
please put them in chat again.
- So I see a question here
from a gentleman that has asked
effectively due to stricter
regulations proposed by USDA,
state has elected to not submit a plan.
So unfortunately, it's not that simple.
One, we don't have the
regulatory authority
or the statutory authority
more importantly,
to actually submit a plan.
But yes, I mean, effectively,
the NCDA does not agree with the USDA.
And we're trying to protect
you from losing more money
than you can already potentially
lose under our program.
And I don't know that anybody else
is going to bat for you in that way.
I'm not saying we're
perfect, nor am I saying
our plan is perfect, but we
realized that this program
has cost a lot to the farmer
and we intend to support
the farmer and we don't believe
that the Interim Final Rule
really supports the farmer.
We believe that that is,
that would be the USDA
learning at the expense of our farmer.
So certainly part of our reasoning there.
- [Marnie] So Paul, there's a
question from River Wheeler,
with new USDA rules, what governing body
would be responsible for testing?
- So, if you're under the USDA plan,
it's my understanding that
a lot of the responsibility
for complying with their
rules will fall to the grower.
That's just based on some
conversations that we've had.
And so, in terms of seeking
compliance testing, destruction
and pretty much any other
reporting requirement
or requirement in that Interim Final Rule
would fall to the grower to do that.
Let's see, I have a question here.
Somebody applying to USDA and
holding a current NC license,
whether you hold a license or
not, if you're in the state
of North Carolina, you will
not be able to apply to USDA
at this particular juncture.
And when you apply to USDA,
you will have to basically
put all of the information,
most of the information
required by our current
application as to where it'll be,
you'll be providing that to them as well.
I know that somebody did say
that you would be required
to have a background check
that is, in fact true,
there is a mandated background check.
- [Marnie] Just a clarification,
there's a question.
I'm sorry, it's moving,
that said if you apply
for a USDA license and pilot
program gets extension,
then the USDA license
trumps the NCDA license?
So my understanding is that
there won't be overlap,
we will in terms of
what is currently valid
and what rules we'll be following,
we are either going to be
under the rules of our pilot
program in North Carolina,
or we will be under the rules of the USDA.
The only time there might be something
that you could potentially
consider overlap
is what I'm hoping we will
get clarification from USDA on
which is, if our pilot program expires
October 31st, at 11:59pm,
then starting November 1st,
you have to have some other
kind of license in place
in order to be compliant from USDA.
But and so there is a
possibility and Paul,
you can correct me if
I'm wrong but I imagine
there's a possible scenario
where USDA will say that
you can apply for a license from them,
but that it won't be valid until
after our pilot program expires.
So again, that's the
transition plan that I'm hoping
we will get in place and that we'll have
more information about hopefully soon.
Again, there won't be a
time when both programs
will be valid, or there's
not gonna be a time
when you can have a
license from both places.
So the example that I use is, for example,
when I moved to North
Carolina, I went to the DMV,
I handed them my license
from the state I moved from,
they took my picture, they took my money,
they asked me some questions
and then they handed me
a new license, right?
There was no time in between
so I was always in compliance,
I always had a valid driver's license,
but you can never have
a valid driver's license
in two states at the same time.
I hope that helps and Paul, I don't know
if you wanna add anything to that
- Marnie, you're right.
As far as the transition
is concerned, ideally,
if we do not get any indication
in the very near future
that the pilot program will be extended,
which again is our preference,
we will hope to arrange
with USDA for North Carolina
growers to submit applications
to them prior to the
October 31st transition.
And basically have you guys
pre approved for licenses
come November 1st, such that
you will have no lapse in coverage.
A couple other questions I saw,
someone asked if there would be any value
in advocating to Congress?
Absolutely, if you wanna see changes,
that when it comes to industrial hemp,
you can always reach out
to your representatives
in order to advocate for what it is
that you think is appropriate.
Somebody also asked if
there was a timeline
for Congress to act, there is not,
it would be voluntary for them to do this,
it would have to be
proposed and then voted on.
And as Marnie and I both
have sort of mentioned,
there was some activity in
the house that may extend
the pilot program, but it
would have to go through
the Senate and be voted
on and passed as well
in order for that to happen.
Another question here, it will
not take a congressional act
for growers to be able
to submit a plan to USDA,
the infrastructure is there
for you to be able to do that.
North Carolina Department of Agriculture
is working with USDA
to make this transition
as easy as possible and
we should be sending out
correspondence to that effect very soon.
But again, everything is still in the air.
- [Marnie] More clarifications,
so Christopher just
posted something that says
the application CA says
that the Department of Ag,
US Department of Ag looks at
applications from August 1st
to October 31 of each year.
So that's correct,
Christopher but that won't go,
that won't apply to
growers in North Carolina
until you are under the laws of the USDA
and right now, we're not
under the laws of USDA.
I say that, I should qualify that,
because we're still
operating under the rules
of our pilot program
here in North Carolina.
Paul, do you wanna help
me clarify that point?
- Right, so a lot of the
rules that are put out by USDA
only take effect, if a
state one, either chooses,
like acknowledges that
they will not be operating
their own program and so
there are various interactions
that will change these dates.
Having spoken to representatives at USDA,
I can assure you that there
will be plenty of time
and you will be able to apply,
once a finalized decision is made
and we can there is some flexibility there
according to USDA.
So currently you cannot apply because
it's not entirely clear what
you, what NCDA is going to do
relevant to this entire
situation, which I know
is not extremely helpful, but
again, we are trying to take
a pathway that minimizes the
impact on our existing growers
and allows us to continue moving forward.
I can also say with certainty
that the rules that the USDA
have placed are interim for
a reason, which means that
they are going to change the rules again,
and likely next year.
And so one thing that
we also hope to avoid
by an extension of the pilot
program is you having to
go from our rules for
their first set of rules
to their second set of rules,
all within about a year's period.
That's going to make
it extremely confusing
and extremely difficult for everyone.
So we're also trying to avoid that.
So somebody asked for a
COVID based extension,
so it's my understanding that the reason
that they would potentially extend it
is exactly for that reason
that it would be tied into
a COVID relief package.
So yes, absolutely,
that has impacted the
way business is done.
If you currently do not have a license,
you cannot apply to the USDA's program,
you could theoretically apply to ours.
My suggestion is to wait
until this is resolved.
- [Marnie] So Paul, there's a question,
there have been a lot of
questions about processors,
so there was a question from Jay, it said,
"Can you address issues with processors?"
- I will do my best to
tell you what I know
about processor situation.
So, first and foremost, again,
both the USDA and the NCDA,
we large, our organizations
currently largely
only deal with cultivation, okay?
So, again, we perform services like this
where we bring you information,
we help get people licensed,
once you're licensed,
we help you keep your
information up to date,
we carry out your compliance testing,
we give you the greenlight to harvest
so that you can conduct business.
After you make that first
sale to a processor,
it is no longer under my
jurisdiction here at NCDA.
And at present, most of
the rules that exist are
are basically federal law.
So the FDA has specified that
you can't make medical claims
they've specified that
you can't put CBD in items
for human or animal consumption.
And that you cannot market it
as a nutritional supplement.
And all of that is beyond NCDA's control.
The only piece of legislation
that would have allowed NCDA
and its divisions to
interact with processors
in the retail market was removed from
the North Carolina Farm
Act before it was passed.
And so without another
piece of legislation
that proposes to give some form of the US,
the NCDA, excuse me, specifically,
Food and Drug Protection Division
without that authority,
there's no regulation there.
And so, while we register
processors, any of you
who are registered as
processors know that basically,
that just adds you to a list
and it gives you a letter
that states that you're
registered for those requirements
and that allows you to operate.
It doesn't do much else than that
and so there's a lot of
gray area in processors
like the status of
crude oil, for instance,
requirements on things
like pesticide residues,
heavy metals, mycotoxins,
and just the state
of your facility, like
good management practices,
food safety, those kinds of things.
So as far as legislation
that impacts processors,
there really isn't a whole lot.
And so unfortunately, there's not I mean,
unless you have a specific
issue with processors
that you're, you'd like to bring up,
that I'd be glad to try to address,
there's just not a lot
of legislation out there
that impacts processors.
- [Marnie] So there was
another question from Jay
and I don't know Jay if Paul
answered your question already.
The question's, what
will happen in October
with all the biomass left from last year?
That was good on THC in North Carolina,
but may not be with USDA?
So the way--
- So anything?
- Yeah.
- You can go ahead but
I mean, effectively,
anything that was grown
and harvested lawfully
under this pilot program
will remain lawful.
It will not all of a sudden
just be illegal material
because you harvested it and
were tested for compliance
lawfully underneath our program.
So it'll still be good,
you can still sell it.
- [Marnie] So Jay, does
that answer your question?
- So I know there were some,
there's a lot of questions
about what about what I have
on hand, come November 1st?
So because I see we have
another question here
from Grayson about material on hand.
So if the material that
you have is harvested
and was tested and lawfully harvested
underneath the pilot
program before October 31st
and not under a USDA license,
then it's legal material,
you can have it, it was harvested
legally under federal law
underneath the 2014 Farm Bill, okay?
The complicated portion of this
is with greenhouse growers,
so if you have, and most
of you probably will,
and those who produce clones,
you're probably gonna have material,
you're gonna have mothers,
you may have leftover clones,
you may just be in the
middle of a growing cycle.
But that material, again,
if it's not harvested,
and it's in production,
if we transition to the federal program
and the pilot program is not extended,
that material will be
subject to these rules,
and you'll need a valid license
in order to continue having that material
and so that would come
into us helping facilitate
all of the growers transitioning
to the federal program,
that's what needs to happen.
So that way there is no lapse in coverage.
But mind you, once you get that license,
once November 1st gets here, that material
will be subject to the interim final rule,
and not to pilot program rules.
So that's as far as, just
about as clear as I can make it
in terms of material,
and it's all gonna depend
whether it's living and
viable, still growing,
or whether it's harvested
and was harvested
prior to November 1st.
- [Marnie] I know we have
about two minutes left,
there's another question
from Payton regarding SB 315
and since the hemp
provisions were removed,
does that mean that food
and beverage companies
in North Carolina cannot use crude isolate
and distillate in products?
My understanding Payton, is
that that's a separate issue.
There's a different division in NCDA
that from where Paul works, that regulates
food and beverages in North Carolina
and may have stated that they
follow what the FDA has said
and the FDA has come out
and said that you can't put
CBD into food and beverage products.
We're still waiting, everything
we've talked about today
has to do with the USDA.
That's when you are growing
hemp, once it is harvested,
and it's processed, then a
lot of it will fall under FDA,
which was not our focus for
today, but I can tell you
we don't have FDA regs right now.
I believe they're working on
it, they submitted something
to the White House I think
it was a month or so ago,
but we haven't heard anything since then,
we're still waiting to
get their regulations
- And Payton, I know we've
spoke about a number of issues
in terms of crude isolate and distillate
I mean processors are free
to use any of those materials
in pretty much anything other than food
or items for human or animal consumption.
So yes, I believe Jessica
has brought up a point,
it's my understanding that no one has had
any specific comment on
tinctures in terms of them being
a food but yes, gummies,
drinks, animal snacks
any kind of food proper,
that's certainly a no go
according to the federal government.
- [Marnie] That's my
understanding as well.
It is two o'clock and yes, grace itself
and Emotions are okay too, that's correct.
So it is two o'clock, I don't
wanna hold anybody over,
I know we all spend a
considerable amount of time
on Zoom these days or a lot of us do.
Paul, thank you very much and
if anybody wants to contact us
with questions, Paul's
email address is up there.
If you wanna email us at Extension,
I will put our group email on here.
Thank you for your time today.
- Yeah, I don't know
if anybody's still on,
or how long people will stay on, but Matt,
assuming that hemp can still be produced,
hemp fiber specifically in
your particular application
for hempcrete, you
should still be able to,
process hemp fiber into hempcrete
if that's what you wanted to do,
there doesn't sound like I've
seen any barriers to that.
Other than the potential for
it not meeting building code,
I have heard that as an issue,
so I don't, hopefully that
answers your question.
- [Marnie] Okay, thank you,
Paul, thank you, everybody,
for taking the time to be here today.
- Absolutely.
Feel free to shoot me
an email, give me a call
if you have more burning questions
and as soon as NCDA has something
more definitive, you can
believe that all of the.
