Tag: usda

USDA Testing Requirements for Hemp

Posted on by Patrick Morin
usda testing requirements for hemp

As mentioned in a previous article, the U.S. Department of Agriculture (USDA) recently published its interim final rule on the establishment of a domestic hemp production. The rule considers products compliant as long as 0.3% THC or below is within the product’s distribution or range.  These rules provide for potentially problematic situations for growers, though they are not unexpected.

Pre-Harvest Testing

Within 15 days prior to anticipated harvest samples must be collected by a Federal, state, local or Tribal law enforcement agency (or designated official). These samples must then be sent to a DEA registered laboratory for testing.

For anyone who has had experience dealing with regulatory agencies, you probably know that waiting for an inspector is part of the game. So what if the “designated official” conducting the sampling takes longer than 15 days? This could result in significant ramifications to the grower. It is possible that sampling beyond the planned harvest date could result in tests higher in THC because cannabis plants convert cannabinoids to THC as they approach maturity and harvest. The results from the pre-harvest test could mean the difference between whether an entire crop is destroyed or not, so the stakes are high.

Acceptable THC Levels

The interim final rule considers products compliant as long as 0.3% THC or below is within the product’s distribution or range. The rule does include some wiggle room in the THC calculation. The distribution or range is calculated by its percentage of THC +/- its “measurement of uncertainty.” This means that a product could test slightly over that limit but still qualify as hemp. The rule states “[t]he method used for sampling from the flower material of the cannabis plant must be sufficient at a confidence level of 95 percent that no more than one percent (1%) of the plants in the lot would exceed the acceptable hemp THC level.” “Acceptable hemp THC level” means:

Acceptable hemp THC level. When a laboratory tests a sample, it must report the delta-9 tetrahydrocannabinol content concentration level on a dry weight basis and the measurement of uncertainty. The acceptable hemp THC level for the purpose of compliance with the requirements of State, Tribal, or USDA hemp plans is when the application of the measurement of uncertainty to the reported delta-9 tetrahydrocannabinol content concentration level on a dry weight basis produces a distribution or range that includes 0.3% or less.

When cannabis is tested, there is a margin of error of the precision of the result. This margin of error, or “confidence level,” must be reported in addition to the actual result. For example, hemp that contains .34% THC but has a +/-.05 measure of uncertainty based on the testing method has a distribution or range of .29% to .39%. Because .3% THC is within this range, the USDA would consider this product compliant.

Confidence Level

Not all testing laboratories will utilize the same testing procedures and protocols, thus the results may vary from one lab to another. This could also lead to laboratory shopping, where customers search for laboratories that provide “flexible” results that are not as precise. This could even incentivize laboratories to stay at that 5% margin of error than trying to minimize the margin.

Decarboxylation

The interim final rule requires that testing methods must include a validated testing methodology that uses post-decarboxylation (or other similarly reliable methods) where the “total THC concentration level” reported accounts for the conversion of Delta-9-tetrahydrocannabinolic acid (THCA) into THC. “Other acceptable methods” include gas or liquid chromatography. The reasoning behind this is that while THC is the chemical component responsible for the intoxicating effect of cannabis, THCA is a non-psychoactive compound having very different properties. When THCA is heated, it goes through a process called decarboxylation, thereby converting to THC.

Mitigation

So what do you do if the THC levels are outside the acceptable range? Technically the product is then not considered hemp and thus would be classified as marijuana which is still a Schedule I drug under Federal law. As a result, the entire crop would need to be destroyed by a person licensed by the DEA to handle Schedule I drugs. But this is a problem also for testing laboratories because they would be in possession of Schedule I drugs. There is no current provision for remediation of crops with higher THC levels, thus the interim final rule threatens farmers’ livelihoods, especially if they are not protected by crop insurance.

If your business has questions regarding hemp compliance, please contact our attorneys at Morsel Law to set up a free initial consultation.

USDA Interim Hemp Rule – What You Need to Know

Posted on by Patrick Morin
USDA interim hemp rule

The U.S. Department of Agriculture (USDA) recently published its interim final rule on the establishment of a domestic hemp production. The rule establishes a program under which states and tribal nations must submit plans to regulate the production of hemp. Since most people don’t enjoy reading more than 150-pages of regulatory jargon, we’ve highlighted some of the important information you may be interested in below.

How do state programs get approved?

State or tribal nations seeking primary regulatory authority over its respective hemp program, may now begin submitting plans for approval. The USDA will approve or deny proposed plans within 60 calendar days. If a State or tribal plan is revoked, producers in that jurisdiction can take shelter under the revoked plan for the remainder of the calendar year and will have a 90-day window to apply for a hemp producer’s license under the USDA plan.

What if your state doesn’t submit a plan?

For producers located in a state or tribal nation that do not submit a plan, they will be subject to USDA’s plan. These producers may submit an application for a hemp producer’s license starting on November 30 and ending on October 31, 2020. In subsequent years, the annual application period will be from August 1 to October 31. To apply, an applicant must provide contact information, a legal description of the hemp producer’s lot, a criminal history report and other information as may be requested.

What are the testing requirements?

A representative sample of the hemp must be physically collected and delivered to a DEA-registered laboratory for testing. The rule also requires a Federal, state, local or Tribal law enforcement agency (or designated official) to collect samples from the flower material from the plant and test for THC concentration within 15 days prior to the anticipated harvest.

What are the “acceptable” THC levels?

Plans must also include procedures for sampling and testing hemp to ensure it does not exceed an acceptable THC level. The rule considers products compliant as long as 0.3% THC or below is within the product’s distribution or range. The rule does include some wiggle room in the THC calculation. The distribution or range is calculated by its percentage of THC +/- its “measurement of uncertainty.” For example, hemp that contains .34% THC but has a +/-.05 measure of uncertainty based on the testing method has a distribution or range of .29% to .39%. Because .3% THC is within this range, the USDA would consider this product compliant.

THC levels above acceptable range

Plans that do not meet the “acceptable hemp THC level” must be disposed of in accordance with DEA regulations. This means the product must be collected by an authorized person and destroyed by a DEA-registered reverse distributor. The producer must then send documentation to the USDA confirming the product’s disposal. Hemp producers will automatically receive a negligence violation if their product contains more than 0.5% THC. Moreover, if any producer receives 3 negligence violations in a five-year period, the producer will be banned from hemp production for 5 years.

Producer reporting requirements

All producers must report all addresses and locations where hemp will be grown, including indoor growing facilities, along with the acreage of that land. Annual reports must be submitted by December 15 each year, which provides certain producer information, land information and test result reports.

Transportation of hemp across state lines

On a Federal level there are no restrictions. Under the rule, states and tribal nations cannot place restrictions on the ability for compliant hemp product to cross their respective borders lines. However, certain state and local law enforcement agencies have taken a different view, stopping and seizing hemp shipments discovered in their jurisdictions. For example, the Idaho State Police seized a shipment of over 7,000 lbs of industrial hemp traveling from Oregon to Colorado and the West Virginia State Police seized a hemp shipment destined for Pennsylvania.

Until state laws catch up with federal law, interstate transport of hemp remains a fundamental risk with real business implications to hemp producers and their customers. Re-routing shipments to avoid certain states adds to costs and, if delayed, may lead to spoilage and financial loss. Some ways to mitigate risk mat be providing truckers transporting hemp: (1) a lab certificate attesting to 0.3% or below THC content levels to eliminate confusion between hemp and illegal cannabis; and (2) a copy of the hemp cultivation license issued under the state, tribe, USDA plan, or the 2014 Farm Bill to dispel doubts regarding the lawfulness of the production.

If your business has questions regarding hemp compliance, please contact our attorneys at Morsel Law to set up a free initial consultation.


Whole-Farm Crop Insurance Now Available for Hemp Producers!

Posted on by Patrick Morin
Hemp fields

Last week, the United States Department of Agriculture’s (USDA) Risk Management Agency (which oversees federal crop insurance), announced the availability of whole-farm “coverage for hemp grown for fiber, flower or seeds” for the 2020 grow year. This coverage will be available to hemp producers who are in areas covered by USDA-approved hemp plans or who are part of approved state or university research pilot programs. Other producers cannot obtain coverage until a USDA-approved plan is in place.

A “Whole-Farm” policy insures all commodities on a farm, under one policy, against unavoidable natural causes of loss (e.g., hurricanes and other natural disasters). This type of coverage is most often seen with specialty crops and organic products. The coverage period is the duration of the grower’s tax year. More information on the program can be found here.

The 2018 Farm Bill amended the Controlled Substances Act to address how industrial hemp is to be defined and regulated at the federal level, and those modifications cleared the way for the Federal Crop Insurance Corporation to offer policies for it. The Farm Bill defines hemp as containing 0.3 percent or less tetrahydrocannabinol (THC) on a dry weight basis.

USDA’s Agricultural Marketing Service (AMS) is formulating regulations that will include specific details for both a USDA plan and a submission process for state plans. AMS expects to release the rules later this year. For more information on hemp production click here.

While the inclusion of hemp in whole-farm coverage is a significant step forward, there is still a long way to go before growers have the benefit of fully developed hemp crop insurance. Our legal team is committed to the hemp and CBD industry and is available to assist hemp growers, breeders, processors and retailers, in all stages of development.

Please contact us to schedule your FREE consultation today!

Your Organic Food May Not Be Organic

Posted on by Patrick Morin

The USDA’s Inspector General recently released its annual report on the National Organic Program (NOP). The report found widespread problems with the NOP that could result in “reduced U.S. consumer confidence in the integrity of organic products imported into the United States.” The report cites the USDA’s Agricultural Marketing Service’s (AMS) failure to reconcile organic standards between different countries, verify documents at U.S. ports of entry and conduct mandatory audits of major exporters.

In visits to seven U.S. ports of entry, the IG found produce shipments of all kinds are fumigated at the border to prevent pests from entering the country. That practice, according to the IG, runs counter to the assurance U.S. consumers get from the NOP that “foreign agricultural products maintain their organic integrity from farm to table.” The IG recommends that the NOP come up with performance measures for timely audits and suggests adoption of a schedule to review each participating country every two years.

The failure of the AMS to do their job is inviting trouble. Food fraud is big business and will probably be even more so after this report is shared across the globe. If a farmer can sell his non-organic wheat as organic for twice the price, he might consider it, or he might not. But what about a wholesale broker run by a criminal enterprise looking for new sources of income, would they think twice about reclassifying products as organic to make more profit? Probably not.

Hopefully the IG report will lead to significant changes for the NOP, but in the meantime consumers should be vigilant about identifying the source of their organic foods. Maybe you’ll think twice about spending extra money on organic food that probably isn’t organic.

If you have questions about products labeling, contact our attorneys at Morsel Law.

President Signs Mandatory GMO Labeling Law: What You Need to Know

Posted on by Patrick Morin

Last week President Obama signed the National Bioengineered Food Disclosure Standard into federal law. The law mandates disclosure of genetically modified organisms (“GMO”) on food labels. The law directs the U.S. Department of Agriculture (“USDA”) to establish, within two years, a nationwide mandatory disclosure standard for bioengineered foods and the labeling procedures. This means that the law itself does not define the standard, but instead gives the USDA significant discretion to define and implement the required disclosure.

Below are some things manufacturers should know about the law:

  • Preemption of State Laws. The new law specifically preempts all state and local labeling requirements applicable to genetically engineered (“GE”) foods that do not mirror the language in the law. This would even apply to state laws already passed, including Vermont where mandatory GMO labeling went into effect in July.
  • Defining Bioengineered Food. The law defines bioengineered food as food that contains genetic material “that has been modified through in vitro recombinant deoxyribonucleic acid (DNA) techniques” and “for which the modification could not otherwise be obtained through conventional breeding or found in nature.” This definition could be interpreted as quite restrictive, so it will be important to watch the rule-making process to see how the law is interpreted.
  • Labeling Requirements. The law does not specify GMO labeling standards, this is left up to the USDA to determine. However, the law does state the methods to disclose GMOs in food, such as text on the packaging, a USDA-created symbol, or an electronic or digital link (such as a QR code) selected by the manufacturer. Small food manufacturers are provided the additional flexibility to disclose GMO ingredients either by listing a toll free number or link to website containing the disclosure on their labels. The purpose of the law was to disclose GMO ingredients on food labels so consumers searching grocery store aisles could make informed decisions, but law effectively fails to achieve its purpose because “disclosure” can be a link to somewhere else, not on the label itself.
  • You Aren’t What You Eat. Meat from animals that consume bioengineered food are exempt from disclosure. Specifically, the law prohibits the USDA from considering any food primarily derived from an animal because “the animal consumed feed produced from, containing, or consisting of a bioengineered substance.” So, for example, you go into a store to buy some beef for a family barbecue and, because of your concern about the safety of GE foods, you want to purchase a GMO free product. You’re aware that most cows slated for consumption are fed a diet containing mostly corn, a majority of which is bioengineered. The label doesn’t disclose GMO ingredients, so you think you’re safe. Think again. Even if the cow eats nothing else but bioengineered corn its entire life, the meat is not considered GE under the new law. Thus, Congress is betting that consumers will be uniformed about the provisions in the law and think their meat is non-GMO, even if its arguably not.

Update: Ag Committee Passes Bill to Repeal COOL

Posted on by Patrick Morin

The Agriculture Committee of the U.S. House of Representatives voted 38 to 6 to approve HR. 2393, a bill that would repeal Country of Origin Labeling (COOL) requirements for beef, pork and chicken products, while leaving intact the requirements for all other covered commodities, such as seafood and shellfish. This move comes just two days after the World Trade Organization (WTO) ruled against parts of the COOL law, a requirement that labels tell consumers what countries the meat is from: for example, “born in Canada, raised and slaughtered in the United States” or “born, raised and slaughtered in the United States.”

House Agriculture Committee Chairman Mike Conaway, R-Texas, a long-time supporter of the meat industry, stated “[w]e cannot sit back and let American businesses be held hostage to the desires of a small minority who refuse to acknowledge that the battle is lost.” But other congressmen don’t believe swift and immediate action is the way to react. Rep. Collin Peterson, D-Minnesota, ranking member on the Agriculture Committee, stated “I’m disappointed that the WTO ruled against the United States, but I think repealing COOL is premature…there are still several steps that have to occur before [retaliation from Canada and Mexico] would take place.”

What is interesting is how quickly Congress reacted to the WTO ruling, an international trade body with no input from American citizens. As mentioned in an earlier article, consumers are demanding increased transparency in the food supply, especially when it comes to knowing where their meat comes from. Moreover, more than 60 other countries have mandatory labeling requirements, including the European Union which requires indication of the country of birth, fattening and slaughter. Although the U.S. and EU laws are different, it is possible for Congress to review similar meat labeling laws and determine whether their is a suitable alternative to repealing the law outright. This may take some time, but it is better to get it right than to do it quick.

Congress is supposed to represent the people, not special interest groups; however, in passing this bill through committee it sends the message that their campaign donors are more important than voters. Time will only tell whether this bill goes anywhere, but I hope voters take notice and remember in November.

U.S. On Verge Of “COOL” War

Posted on by Patrick Morin

Those of us born before 1980 probably remember growing up the midst of the Cold War between the United States and Soviet Union. The Cold War ended in 1991, however, the U.S. could find itself facing a trade war, this time with its North American neighbors.

On Monday, the World Trade Organization (WTO) ruled the U.S. country-of-origin labeling (COOL) required on certain meat packaging discriminates against livestock from Canada and Mexico. The ruling could lead to retaliatory measures in the form of tariffs on U.S. imports.  Canada and Mexico have both indicated they intend to impose sanctions on U.S. exports as early as late summer.

The labeling law was originally introduced by Congress as part of the 2002 farm bill. The current rules require labels to state, for example, that the animal that produced the meat was “born in Mexico, raised and slaughtered in the United States” or “born, raised and slaughtered in the United States.”  Canada and Mexico argued that these labeling requirements caused the prices of their meats to drop because meatpackers don’t want to go through the hassle and expense of segregating imported animals. The WTO report supports this argument, claiming that U.S. regulations, which require meat producers to indicate on retail packaging where each animal was born, raised and slaughtered, give less favorable treatment to imported meat than domestic products.

As a result of the WTO ruling, Congress is now faced with a tough choice: amend or repeal the law, or suffer punitive tariffs on a range of goods. Any amendment needs to be narrowly tailored so that U.S. meat producers are not favored over imports. In 2013 while the dispute was working its way through the WTO, Congress amend the labeling rules, but the WTO stated in their report the amendment did not go far enough. Repealing the law could appease Canada and Mexico and prevent a trade war; however, what message would this send to U.S. consumers? As consumer demand has

been increasing over the past several years for transparency in the food supply, by repealing COOL Congress would in effect be telling consumers that U.S. trade interests are more important. How well this would sit with consumers is unknown, but with the 2016 election on the horizon I’m willing to bet legislators are polling their constituents on this issue. If Congress does nothing U.S. exporters will certainly suffer, most likely passing the additional cost onto consumers. But it isn’t just additional cost, it’s lost jobs. Jobs in the industries affected by the tariffs and jobs that supply those industries. In the stagnant economy in which we live, any action that results in job losses needs to be thoroughly reviewed.

The U.S. Congress is on the clock and the world is watching.  Whatever side you may be on, this is going to be a fight of historic proportions as money continues to pour in from all sides. Stayed tuned for updates as we closely follow this matter and post updates to our blog.

Nature Valley Isn’t Natural Anymore

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General Mills Inc., the maker of Nature Valley, agreed to keep the phrase “100% natural” off of its food products as part of legal settlement with several consumers and advocacy groups. In doing so, General Mills follows a string of other food companies, including Trader Joe’s, Kashi and PepsiCo, that have agreed to settle similar cases without admitting liability to avoid further litigation costs. The real issue here is whether General Mills violated the law? Well, under the current FDA regulations it appears they didn’t.

Up to this point the FDA has refused to define the term “natural”, but has noted on an informal statement support for the policy that “nothing artificial or synthetic is included in, or has been added to, the product that would not be expected to be there.” 58 Fed. Reg. 2302, 2407 (Jan. 6, 1993). The USDA, however, has defined “natural” (when applied to meat, poultry or eggs) as a product containing no artificial ingredient or added color and is only minimally processed. “Minimally processed” means that the product was processed in a manner that does not fundamentally alter the product.

The Food Labeling Modernization Act would prohibit the use of the word “natural” on a food that includes any synthesized ingredient, or any ingredient that has undergone chemical changes such as corn syrup, high-fructose corn syrup, high-maltose corn syrup, maltodextrin, chemically modified food starch, or alkalized cocoa. The bill also calls on the FDA to develop a more encompassing definition of natural.

Here, the plaintiffs accused General Mills of making misleading statements by marketing Nature Valley products as natural when they contained genetically modified and processed ingredients. Under the terms of the settlement, General Mills agreed not to use the “100% natural” claim for products that include processed ingredients, including corn syrup and the food additive maltodextrin. The settlement also prohibits the company from using the phrase on products that contain more than a trace amount of genetically modified ingredients. Interesting to note, new packages for Nature Valley granola bars now have a stamp that claims “made with 100% natural oats”.

Labeling and marketing your food product to comply with state and federal regulations is a difficult and time consuming process. If you need assistance in either of these regulatory areas please contact our attorneys at Morsel Law.

Is My Product Organic or Natural?

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As the natural and organic market continues to gain strength, with sales topping $81 billion in 2012, businesses are striving to meet consumer demand.  However, for businesses that are entering this sector in hopes of capturing some of the market share, understanding the difference between labeling your product as “organic” and “natural” is essential to ensure you don’t run afoul of federal regulators.

All agriculture products sold, labeled or represented as organic need to be in compliance with the Organic Foods Production Act of 1990 (Act).  Pursuant to the regulations promulgated by the Act, organic growers and handlers (including food processors and distributors) must be certified by state or private agencies/organizations under the uniform standards developed by the USDA; however, farmers and handlers who sell less than $5,000 of organic products per year, and retail food establishments that sell organic products but do not process them, are exempt from certification.  In order to label your product as “organic” at least 95% of the contents need to be certified organic.  Products labeled as “made with organic” ingredients must contain at least 70% organically produced ingredients.  Obviously, if you label your product “100% organic” it must be true.  The USDA organic seal may be used only on products that are “100% organic” or “organic”.  Fines of up to $11,000 per violation can be levied against any person who knowingly sells or labels a product as organic that is not produced in accordance with the regulations.

Now labeling your product as”natural” is a whole different story.  Up to this point the FDA has refused to define the term “natural”, but has noted on an informal statement support for the policy that “nothing artificial or synthetic is included in, or has been added to, the product that would not be expected to be there.”  58 Fed. Reg. 2302, 2407 (Jan. 6, 1993).  The USDA, however, has defined “natural” (when applied to meat, poultry or eggs) as a product containing no artificial ingredient or added color and is only minimally processed.  “Minimally processed” means that the product was processed in a manner that does not fundamentally alter the product.  Although there has been much litigation concerning natural labeling, there is no clear standard under the FDA regulations.

If you need assistance navigating or complying with the laws affecting your food or beverage businesses, please feel free to contact our attorneys at Morsel Law.

“Gluten-Free” Must Now Be Gluten-Free

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After a year of phasing in compliance, the Food and Drug Administration (FDA) now requires any food labeled “gluten-free,” to contain no more than 20-parts per million of gluten, which is the lowest level detectable in food and one that would generally be acceptable even for those who suffer extreme gluten-intolerance health problems. The rule also holds foods labeled “without gluten,” “free of gluten,” and “no gluten” to the same standard. The rule also brings the United States in line with international labeling standards that are employed across Europe and other parts of the world.

Products must not contain any wheat, barley or hybrids, or be derived from a gluten-containing grain that has not been processed to remove gluten. However, some products that are labeled “gluten-free” that have levels above the defined levels of acceptability for gluten-free products may still be allowed to remain on shelves for the next six months to a year as the ban isn’t retroactive. While the FDA has insisted that companies phase out above-acceptable levels of gluten in their gluten-free products, those with long shelf-lives, like pasta, may remain on shelves.

The FDA will engage in additional rule-making to establish how it will determine compliance for hydrolyzed and fermented foods (e.g., yogurt, sauerkraut, hydrolyzed protein) because the current methods cannot quantify gluten in these foods. In the meantime, hydrolyzed and fermented foods that meet the definition of “gluten-free” may bear a gluten free claim. The FDA will exercise enforcement discretion to beer that currently makes a “gluten-free” claim and that are (a) made from a non-gluten-containing grain or (b) made from a gluten-containing grain, where the beer has been subject to processing that the manufacturer has determined will remove gluten. This enforcement discretion pertains only to beers subject to FDA’s jurisdiction and that were making a “gluten-free” claim as of August 5, 2013. Please note that the FDA regulates non-malt beers (beers made without malted barley or hops).

The effective compliance date of the rule is August 5, 2014. Products labeled prior to the compliance date that bear the claim “gluten-free” will not be subject to regulatory action by FDA. However, any product labeled by the manufacturer on or after August 5, 2014, bearing a “gluten-free” labeling claim that does not comply with the definition will be subject to regulatory action. The “gluten-free” final rule applies only to packaged foods, the FDA expects restaurants that use “gluten-free” on their menus are consistent with the federal definition; however, the final rule does obligate restaurants to be in compliance.

If you need assistance to determine whether your food product is in compliance with the FDA labeling requirements, please contact the attorneys at Morsel Law.