Wisconsin's Hemp Program Will Be Handed Over to Federal Authorities

BY JEAN-GABRIEL FERNANDEZ

Wisconsin is set to become the first state to relinquish authority over its state hemp program to the federal U.S. Department of Agriculture (USDA). The announced transition will occur on January 1st, 2022. Starting on that date, Wisconsin farmers and hemp processors will have to comply with the final rule on hemp released by USDA earlier this year.

The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) has overseen a very rocky few years for hemp in the state. When the 2014 Farm Bill was signed into law, industrial hemp became a legal crop in Wisconsin under a research pilot program. Wisconsin hemp growers and processors have been required to submit a research plan to become licensed as providers of hemp for research purposes. When the 2018 Farm Bill fully legalized hemp, confusion was sown by numerous delays in USDA’s efforts to publish a final rule and roll out a legal hemp structure across the nation.

In October 2020, Wisconsin farmers and processors were scrambling to keep up with federal regulations. USDA had failed to approve Wisconsin’s hemp plan, and lawmakers extended the deadline for Wisconsin farmers in the nick of time. DATCP still transitioned to a different hemp program while awaiting USDA’s final rule on hemp, which was more than two years in the making.

HARD CROP TO GROW

What followed was an unexpected and significant decline in interest for hemp farming in Wisconsin. Applications to be a licensed hemp grower or processor, which had been higher than 2,200 per year until then, fell to 1,339 in 2021, a 42% drop. Of these 1,339 people, more than a thousand were returning applicants. Not only did Wisconsin’s hemp industry fail to attract new faces, it also drove away nearly half of the crowd willing to give it a shot in just three years.

Hemp—and by extension cannabis itself, as hemp is merely a strain of cannabis with low psychoactive effects—is a difficult crop to grow, as it requires a lot of care, infrastructure and water. Unlike other crops, hemp requires regular testing to ensure it does not contain more than 0.3% THC (tetrahydrocannabinol, the psychoactive component of cannabis); if it does, then the cannabis plants are considered to be illegal marijuana and must be destroyed. Additionally, a large majority of cultivated acres of hemp are dedicated to the extraction of cannabidiol (CBD) products, which were extremely popular a couple years ago, but the production proved far greater than the demand, leading the price of CBD to fall, along with the profitability of hemp.

As a result, acreage dedicated to hemp was divided by three in Wisconsin, down from 14,200 acres to 5,300 acres in the 2021 growing season. Now, at the height of instability, DATCP is handing control of this industry over to the federal authorities.

“Through continued outreach with industry stakeholders and USDA, DATCP’s plan is to transition the program from a state-

run program to a federal-run program. We believe this transition will provide hemp growers with the greatest opportunity to produce hemp in Wisconsin,” said Randy Romanski, DATCP Secretary-designee.

WHAT TO EXPECT FROM THIS CHANGE

Wisconsin is, along with North Carolina, the first state to abandon control over its own hemp program. Hawaii, New Hampshire and Mississippi are also operating directly under the authority of USDA, but unlike Wisconsin, they never had a state plan in the first place.

The reason behind Wisconsin’s decision to abandon the state’s control over hemp seems to be purely financial. A June report from the Legislative Fiscal Bureau found that the hemp program was set to end the year with a negative balance of $450,000. This is in large part due to constantly increasing costs because of the ever-shifting legal framework imposed by federal authorities coupled with plummeting income due to shrinking applications and associated fees, which were supposed to keep the hemp program funded. The state legislature refused to provide additional funding. DATCP suggested doubling application fees to increase income, but they eventually decided against it, choosing instead to relinquish the program to federal authorities.

The question of state versus federal control had cropped up last year, when nobody knew whether federal lawmakers would allow our state to retain its hemp program. At the time, DATCP claimed to want to hold onto the state program because it was more advantageous to our farmers.

Photo by Yarygin/Getty Images.

CHANGING THE RULES

The main argument brought forth is that, under DATCP rules, Wisconsin farmers could grow hemp that tested up to 0.399% THC, as DATCP rounded down. Under federal rule, Wisconsin farmers would not benefit from that leniency.

One reason why DATCP might have changed their position on the adequacy of federal rules on hemp is that USDA applied several changes to their rules in 2021, granting farmers some more wiggle room. USDA increased the THC levels considered a negligent violation requiring eradication of the crop from 0.5% THC to 1% THC, allowing remediation for crops that test above the legal threshold but below 1%. USDA also doubled the time granted to farmers to get their crops tested.

The transition to USDA control would mean an end to licensing fees mandated by DATCP, as USDA does not charge an annual registration fee to hemp growers. However, because DATCP is currently in charge of testing crops for THC, the transition could also incur much greater delays in getting the mandatory tests done though USDA. Wisconsin growers have also expressed worries that being managed by a federal agency rather than a state-run one could lead to difficult customer service relations and impede Wisconsin’s already weakened hemp industry.

Jean-Gabriel Fernandez is a journalist and Sorbonne graduate living in Milwaukee.