The USDA is Revoking Hemp Farmers Licenses Over Growing Legal Cannabis
Nearly five years after farmers celebrated the 2018 Farm Bill that allowed the chance to grow hemp legally, some are seeing that rug pulled out from under them with little warning.
The first to get their story out was Sam Bellavance, a dairy farmer and business owner in Vermont who quickly saw the opportunity presented and ran with it. He started growing hemp on 10 acres of his Alburgh land and worked hard to create Sunset Lake Craft CBD. His brand offers tinctures, topical oils, and dog treats among other products and sales steadily increased year-over-year.
So, when Vermont moved to legalize other forms of cannabis it only seemed logical to Bellavance to expand his brand and diversify his crops yet again. Over the past year he planted his first marijuana crops with the intention of creating a brand separate from his CBD and hemp products.
Unfortunately, in March 2023 a representative of the U.S. Department of Agriculture (USDA) reached out via email to inform him that “regulations didn’t allow for a hemp-licensee to also be producing marijuana, even if licensed to do so by a state program.” Further, it instructed him to surrender one license or the other to continue producing either crop.
Shortly after Bellavance story was shared by the local Vermont publication Seven Days, the story was picked up by Politico, who found others in the same situation.
Hemp Farmers Stand to Lose Millions Because the Government is Slow to Act
“While Medical Cannabis is not federally legal, we will not be able to allow you to maintain your current hemp license in addition to the medical cannabis cultivator license,” an USDA representative told Eric Sorenson, according to Politico.
Bellavance estimates that he stands to lose roughly $250,000 in revenue due to having his license revoked. While Bellavance was approached after planting his cannabis crops, a hemp farmer in Missouri told Politico that the USDA had informed him in April of 2023 that he would lose his federal hemp license if he were to apply to participate in the states newly legal marijuana industry.
“The expertise gained by growing one plant is very transferable to the other — they basically are the same species — and having a black-and-white bar like this is bad public policy,” Jonathan Miller, general counsel to the U.S. Hemp Roundtable, told Marijuana Moment. “I would hope that USDA would revisit this, and if they believe their hands are tied by statute, then is something we should fix in the Farm Bill.”
One would think that hemp farmers would be the best marijuana farmers. After all the two plants are nearly identical until you get into the genetics that determine the potency of cannabinoids like THC and CBD, which determine whether a plant is hemp or not. But this is far from the first time that the conflict between federal and state laws has created problems for those trying to establish themselves in these grey-area industries.
“It’s like saying you can grow apples but you can’t grow pears,” Sam Bellavance, farmer and owner of Sunset Lake Craft CBD, told Vermont’s Independent Voice: Seven Days.
Is the USDA Abusing their Federal Authority by Revoking Hemp Licenses?
In their article, Politico suggests that the federal government may be abusing their authority in states where the USDA directly oversees the hemp licenses and programs. While many states already had hemp or CBD specific laws in the books, many more implemented regulatory laws shortly after the 2018 Farm bill was passed. Only a small few did not.
So far, the only states where farmers have received warnings or had licenses revoked are in states where there is no state-run program. When asked if this may be part of the reason for the licenses being revoked, the USDA declined to provide a direct answer.
Instead, they provided Politico with a vague and generic answer about how the contrast between federal and state law provides a difficult landscape for the legality of growing these crops.
“While the 2018 Farm Bill legalized hemp production, marijuana remains a Schedule I controlled substance under federal law,” said USDA spokesperson Allan Rodriguez in a statement to Politico. “This presents a unique jurisdictional and regulatory landscape that producers of more traditional agricultural commodities do not have to navigate.”
Clear and Concise Regulations Are Necessary to Avoid State and Federal Law Conflicts
“USDA recognizes that this is a rapidly evolving area of dual state and federal regulation, and we will continue to monitor our policies to keep pace,” a USDA spokesperson told Marijuana Moment. “Additionally, we will continue working to educate farmers on the current laws and regulations so they can make the best choices for their operations.”
Unfortunately, recognizing that the situation is constantly changing doesn’t give anyone guidance they can rely on. Farmers don’t want to waste five years on a crop, only to have their license — and along with it a part of their business and their livelihood — yanked away. Especially not for growing another crop that is legal in their state.
Until the U.S. government does more to clarify the laws surrounding hemp and cannabis it is going to continue to be an uncertain investment, which will lead to instability for anyone hoping to enter the industry. Without these changes, it will be up to local, state, and federal government agencies to interpret the laws on their own — which is only going to lead to further confusion the longer it continues.
FDA and A Revised Farm Bill Could See the CBD Market Worth More Than Craft Beer
In 2022, the U.S. hemp industry was larger than both medical and recreational marijuana — and rivaled nationally with craft beer sales. With roughly $28.4 billion in sales, over 300,000 jobs and $13 billion in wages, Whitney Economics said the total economy is worth an excess of $79 billion.
Comparably, craft beer sales in the U.S. for 2022 was also $28.4 million. This shouldn’t entirely be surprising, considering the U.S. approval rate for medical and recreational marijuana now sit well over half of the population.
With the growing popularity of hemp derived cannabis products including CBD, CBN, THCa, delta-8 and delta-9 THC to name a few, these numbers are only expected to grow. But the rate at which they grow from here will largely depend on how long the U.S. government takes to enact changes that provide investors, entrepreneurs, and farmers, with more certainty that they aren’t wasting their time.
“There are huge opportunities for hemp in the U.S. However, the fact that the FDA is not clarifying policy is driving significant uncertainty into the market and increasing investor risk. This is suppressing the growth of hemp in the U.S.,” Whitney Economics said in their recent assessment of the hemp industry. “Much of this would be addressed with greater clarity by the FDA.”
The patchwork of laws regarding the cannabis and hemp plants changes from state to state, and sometimes from one county or city to the next. The fact that the government has moved so slowly to enact policies around cannabis and hemp has been a hold up every step of the way for farmers and everyone else working in the hemp and cannabis industries.
These changes to archaic law are necessary now more than ever. Without it, those trying to make a living by enriching the lives of others through hemp and cannabis can’t do so without fear of having everything they’ve worked for taken away with a single email like happened to Bellavance.
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