Law could commercialize industrial hemp — with federal OK

Plant can produce CBD oil and dietary supplements, as well as be a substitute for plastic and wood.
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The law updates licensing requirements for hemp growers and strengthens the state’s verification of hemp crops for their compliance with federal policy. Photo by iStock

LANSING — Michigan’s hemp farmers are looking to industrialize the cannabis plant in new ways and beyond its use in marijuana dispensaries.

Legislation that passed the Michigan Senate on June 25 could make that a reality.

Sen. Dan Lauwers, R-Brockway Township, said SB 850 would help align the state’s hemp industry with federal standards, if the U.S. Department of Agriculture (USDA) approves how the state enforces them.

The measure was awaiting Gov. Gretchen Whitmer’s signature as of July 2.

The legislation updates licensing requirements for hemp growers and strengthens the state’s verification of hemp crops for their compliance with federal policy.

“That’s really what the new legislation is about,” Lauwers said. “To demonstrate to the feds that Michigan has the capacity to regulate.”

In Michigan, hemp is grown only under a research pilot program, but with federal approval, the state would join 14 tribal governments and 12 states able to license their own hemp growers and processors.

Hemp plants can be used for its CBD oil and sold as a dietary supplement or other personal care products, but the plant’s fibers also can be used as wood or plastic substitutes, said Dave Crabill, the communications director for iHemp Michigan, an association of local industrial hemp farmers.

“The USDA’s rules have mandated many changes that need to take place, compared to the Industrial Hemp Ag Pilot Program, regarding the cultivation, sampling and testing of hemp,” said Jennifer Holton, the communications director at the Michigan Department of Agriculture and Rural Development.

Michigan will need to comply with the USDA’s rules before Nov. 1, she said.

Federal hemp standards are new and still rely on enforcement of the Controlled Substances Act, which criminalizes marijuana.

THC, the psychoactive compound in marijuana, complicates the market viability for industrial hemp because under federal regulations, hemp crops with THC levels above 0.3% must be destroyed.

Lauwers said, “In my opinion, it’s unfortunate, and I think it’s a matter of time before that law will change again. You can produce THC products legally in this state if you want to.”

Producers of industrial hemp try to remove 100% of the THC when they harvest their plants, Lauwers said.

There should be no reason to go through the work of growing industrial hemp and not be able to sell it, he said.

The USDA held an open comment period in October, where the state agriculture department raised concerns similar to Lauwers’.

“It’d be nice to have USDA come up with rules that were a little friendlier to the industry,” said Crabill, of Clayton Township.

“The destruction (requirement) is problematic. We have other things we could do with the hemp fiber that are beneficial to the environment,” he said.

Lauwer’s legislation includes raising the growing license fee from $100 to $1,250.

iHemp Michigan released a statement expressing concerns about the legislation’s fee structure and the requirement for farmers to report each hemp sale.

License fees are intended to maintain a self-supporting program within the state’s agriculture department, said Theresa Sisung, an associate field crop specialist at the Michigan Farm Bureau.

The state would have new responsibilities to sample and test hemp plants, she said.

“A grower needs to call the [state Department of Agriculture and Rural Development] and say they’re ready to test,” Sisung said. “Someone has to come out, take that sample and then take those samples to the lab to get tested.”

The place to test hemp samples in Michigan is the department’s Geagley Laboratory in East Lansing, but two other labs could absorb the workload if needed, she said.

“If they start to get overwhelmed, they do have the ability to allow other labs to do the testing as long as the labs meet certain criteria, one of which is being Drug Enforcement Administration registered,” Sisung said.

Crabill said, “Right now there’s not a big market — there’s no big players out there buying up a lot of hemp products.”

However, that could change with a clear framework by the Food and Drug Administration for regulating CBD oil as a supplement like vitamin C instead of as a drug, he said.

“It’s hard in this industry right now,” he said. “The more complicated we make this, it’s just going to limit the industry.”

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