The nationwide hemp rules are taking effect March 22 as planned, with no additional delay or review because of the changed administration at the U.S. Department of Agriculture.

The USDA gave notice Monday that the rules have been reviewed and are cleared to take effect as planned. The USDA was giving the hemp plan a second look because it was published less than 24 hours before former President Donald Trump left office in January.

Among other changes, the final hemp rules:

• Allow hemp farmers to use common disposal methods to destroy hemp crops with more than 0.3% THC.
• Give hemp producers 30 days before harvest to get their plants tested for THC, up from 15 days. 
• Give farmers more breathing room before being considered “negligent” for producing hot hemp. The new negligence standard is 1% THC, up from 0.5% THC. 

Not all the final rules have been embraced by the industry, though. The final rules retain a requirement that hot hemp flowers be destroyed and that testing labs be certified by the U.S. Drug Enforcement Administration.

The rules also require hemp to tested for total THC content, not just delta-9 THC.

Learn more about the final hemp rules in this free downloadable reference guide, “USDA Final Hemp Rule: A Handbook for Hemp & CBD Businesses.”

Hemp genetics companies have been actively pursuing patents to protect their intellectual property after years of work to develop novel genetics.

But despite intellectual property protection that became available after the U.S. legalized hemp production in 2018, some companies are still opting for more expensive and more comprehensive plant utility patents for the highest level of protection over their breeding efforts.

Broader than a plant patent or PVP, a utility patent offers the most protection available under the federal law.

Colorado-based Charlotte’s Web Holdings secured two utility patents in mid-January for its new feminized seed hybrid hemp varieties:

• Kirsche, a variety that will be used for the company’s internal cultivation purposes.
• Lindorea, which the company has made publicly available for hemp farmers to buy for their own production seasons.

According to the company, the varieties are the first two allowed utility patents on feminized hybrid hemp plants. So far, the company has earned one plant patent and four utility patents for its breeding efforts.

“Achieving the first patented hemp hybrids demonstrates that it is possible to improve hemp through similar methods as other agronomic crops using natural breeding techniques,” said Bear Reel, Charlotte’s Web vice president of cultivation and R&D and the developer of the new varieties.

According to Reel, Charlotte’s Web considered all the options available to protect its genetics, and settled on a utility patent for the level of protection it offered.

PVP protection, which comes through the U.S. Department of Agriculture, is “limited to the plant itself,” Reel told Hemp Industry Daily.

“Our utility patents help us protect not only the plants themselves, but also provides some protection for our breeding work, and the products that we make from our genetics.”

Protecting years of work

With all the work that goes into identifying traits, hybridizing new varieties and building up a supply of genetics for the marketplace, plant breeders must protect their work to ensure they receive royalty payments associated with their genes, traits and varieties.

It’s a process that is common within other agricultural commodities and specialty crops.

Options for protecting intellectual property include:

• Plant Variety Protection through the USDA, which protects asexually propagated or seed varieties for up to 20 years and is only available for legal hemp varieties.
• Plant patents through the U.S. Patent and Trade Office, which cover key characteristics of asexually propagated or clonal varieties of both hemp and marijuana varieties, for up to 20 years.
• Utility patents through the U.S. PTO, which cover plants and their parts of both marijuana and hemp varieties for up to 20 years.
• Charging other plant breeders to use IP through Material Licensing Agreements.

Some consider utility patents the best option for cannabis breeders because they cover both sexually and asexually propagated new varieties, and because plant breeders can make multiple claims to cover the specific elements of a plant.

In addition to varieties, utility patents can protect genes, traits, methods and plant parts.

“The best protection you can get to protect your genetics and its progeny is getting a utility patents on a variety,” said Wendy Mosher, president and CEO of Fort Collins, Colorado-based New West Genetics.

“Varieties have to show stability over at least six to eight generations, but that is ultimately up to the examiner in most cases.”

But because a utility patent is broader and more complicated, it can also take longer to file and defend. Costs are higher, too, and will include maintenance fees and costs for updates.

Are utility patents the future?

It’s hard to say whether hemp breeding companies seeking out utility patents over PVP or plant patents is the beginning of a trend or dependent on the mission of the company.

In other agricultural industries such as ornamental horticulture, more plant breeders have been investing in utility patents in recent years to protect their breeding efforts, after issues have come up with competing breeders taking liberties with patented genetics and creating essentially derived varieties through irradiation.

According to plant geneticist and intellectual property attorney Dale Hunt of San Diego-based Plant and Planet law firm, it’s likely that companies will continue to opt for plant utility patents because of the limited protections available from plant patents and PVP certificates.

“Specifically, it’s not an infringement of a plant patent to use the patented plant for further breeding; same for a PVP-registered variety,” Hunt told Hemp Industry Daily in an email.

Because hemp and marijuana companies may want to protect genetics to have their own unique, proprietary consumer product that is protected all the way from seed to shelf, it is advisable to spend the extra money on utility protection, Hunt said.

This broader patent coverage could easily cost five to 10 times more than a plant patent, he said.

This high cost is what makes Mosher question whether the hemp industry will see an uptick in plant breeders pursuing utility patent protection.

“It’s highly expensive,” Mosher told Hemp Industry Daily.

“Just like everything else, all of this work is going to start to get consolidated because of the expense.”

Before the USDA PVP patents were available, Mosher applied for and received the first utility patent for a commercial hemp variety.

“Just to file, it’s $10,000 and that’s the filing fee – that’s not your lawyers that prepare it,” Mosher said.

Large companies that have patents on germplasms are able to do so because they have the money to pursue and enforce them, Mosher said.

“I don’t know that that’s going to become standard now. I think a few companies may, but it’s cost prohibitive.”

But Reel said the extra work and money involved in securing a utility patent is worth it.

“Much of the added difficulty in securing a utility patent is in the amount of scientific information required during the patent review process, and in demonstrating inventiveness over other existing genetics,” Reel said.

Licensing patented genetics

Owners of PVP and plant patents must provide seed and tissue culture samples to the federal government to allow for future breeding when the patent expires. That may be seen as a drawback because under Plant Breeders’ Rights, a global plant-protection regulatory convention, PVP certificates allow potential competitors to access plant seeds.

Germplasm, including genetic markers and traits, can still be licensed under utility patents if a company chooses to allow a breeder or another company to do so – just because it’s under a patent doesn’t mean plant traits are locked up forever, Mosher said. But it’s still too early for that yet in the hemp market thus far, she said.

“As the industry gets bigger and more differentiated with what the end consumer needs, that’s when it’s really going to open up for licensing.”

Learn more about hemp genetics and the commercial varieties available on the market in the 2021 Hemp Variety Yearbook.

Laura Drotleff can be reached at [email protected]

Researchers at the U.S. Department of Agriculture say they’re studying ways to boost hemp production and profitability for growers, and are collecting the first national statistics on domestic hemp production to be ready by next year.

But Dionne Toombs, director for USDA’s Office of the Chief Scientist, gave no indication this week at the National Hemp Symposium by Oregon State University that nationwide hemp rules taking effect next month might be delayed or again reviewed, as some hemp operators are hoping.

Toombs said that USDA hemp research includes working on standardizing THC and CBD testing and establishing a new collection of hemp germplasm with Cornell University.

She said USDA scientists “have a proven track record of revolutionizing American agriculture and pioneering technology advancements to bring new commodity innovations to consumers.”

“We have challenged ourselves to discover the next bold move in agriculture, and industrial hemp is positioned to achieve that same success,” she said.

Toombs only briefly touched on the final rules for hemp production that the USDA released just hours before President Donald Trump left office. She said the regulations become effective March 22.

President Joe Biden’s office immediately ordered a review of new rules from federal agencies. But there has been no indication that the latest word on hemp production is changing before the 2021 growing season.

Toombs said little about the policy, instead talking up other research projects the USDA is working on, including:

• A new $66 million Agricultural Research Service lab where scientists will study hemp farming, fiber, and plant breeding.
• Developing software with Oregon State University to assist farmers in incorporating hemp into their crop rotation.
• Assisting plant breeders in enhancing fiber quality.

Toombs said USDA scientists are also researching the genetic diversity of hemp and finding hemp post-production opportunities for new applications.

“These are a few examples of how USDA science agencies are working together to propel industrial hemp production in the next era of American agriculture,” she said.

Hemp is also getting a statistical boost.

The crop will be included in the 2022 U.S. Census of Agriculture, the premier data source on agriculture production and indicators for economic and environmental welfare. The ag census is compiled by USDA’s National Agriculture Statistics Service but does not yet include hemp production itemization for producers.

Ivan Moreno can be reached at [email protected]

A clear majority of hemp farmers and processors support establishing a federal program to promote the crop, according to a survey by two industry groups, but not everyone supports paying for it.

The National Industrial Hemp Council and the Hemp Industries Association polled their members late last year on the question of having a checkoff program, joining the dozen or so U.S. agricultural commodities that already have one. Nearly eight out of 10 hemp growers and processors favor a checkoff program.

“This is exciting news for our industry, and exciting that there is such wide consensus in our industry to support such a program,” said Patrick Atagi, Board Chairman of the National Industrial Hemp Council.

The now-famous “Got Milk?” campaign grew out of a checkoff program, which also funds research and educational efforts. Atagi said a checkoff program would “fund much-needed research and educate consumers on the usefulness and versatility of hemp.”

The USDA’s Agricultural Marketing Service currently promotes 21 different agricultural industries with checkoffs. Federal marketing programs, once in place, are mandatory assessments.

The industry groups will now form a panel of representatives from the industry to discuss how the checkoff program would work. Alth0ugh there’s overwhelming interest for a hemp checkoff program, HIA and NIHC still need to convince more industry players to buy into the idea of paying for the program.

Six out of 10 farmers and processors surveyed support paying an fee for the program. The USDA, which approves or denies checkoff programs, has said it will not institute one for hemp unless stakeholders at all levels of the supply chain are in favor.

“It’s clear from the survey response that there is a broad level of excitement around the idea of a national hemp checkoff program, and significant interest in the potential return the hemp industry could see from an effective research and marketing program under USDA,” said HIA President Rick Trojan.

HIA and NIHC said 270 hemp growers and processors completed the survey.

Michael Lewis, the founder and former CEO of Sprig, a CBD beverage company, said he likes the idea of promoting the crop, noting that “it’s still shocking” how little people know about hemp.

“I think the No. 1 challenge for the industry is still education and awareness,” he told Hemp Industry Daily. “So to me, those are the best investments that any stakeholder can make is, public education and awareness.”

Ivan Moreno can be reached at [email protected]

U.S. farmers could bring home almost $10 billion less in annual income in 2021 because of slowed federal pandemic payouts to farmers.

The U.S. Department of Agriculture projects that farm income in 2021 will decrease $9.8 billion, to $111.4 billion.

The falling income forecast comes as Congress pumps the brakes on pandemic-related relief funds for agriculture. The USDA did not project how many of those dollars were going to hemp producers, though the crop was eligible for federal assistance.

Total federal assistance to farmers in 2021 was projected to hit $25.3 billion in 2021, a decrease of $21 billion from 2020. Government payments to agriculture reached an all-time high in 2020.

At the same time, farm expenses are projected to rise by $8.6 billion in 2021 as growers spend more money on fertilizer, feed and labor.

The Biden Administration has said that it plans to offer financial incentives for climate-friendly farming practices as part of its overall plan to fight climate change. But details on those farm payments haven’t been released, and those payments were not reflected in the USDA’s 2021 income projection.

A top official with the U.S. Department of Agriculture praised the agency’s work on hemp this week, putting into doubt any plans to make additional changes.

Sonia Jimenez, deputy administrator for the Specialty Crops Program in the USDA’s Agricultural Marketing Service, talked up the rules in a newsletter the agency sends to farmers.

“The work covered three comment periods and a fair, consistent, science-based process for states, tribes and individual producers,” Jimenez said in the newsletter.

She made no mention of revisiting the hemp rules. Some in the hemp industry are hoping the agency considers a fourth public-comment period and makes additional changes, especially on testing protocols.

President Joe Biden’s chief of staff informed all federal agencies last week to consider pausing any new rules for additional review; the USDA hemp rule was published a day ahead of that memo and is scheduled to take effect in March.

The USDA has said the hemp final rules aren’t on hold, but that the agency is reviewing all programs implemented by the previous administration, as is common when there is a new president.

Learn more about how the USDA’s final rule differs from the interim rule by downloading Hemp Industry Daily’s special report, “USDA Final Hemp Rule: A Handbook for Hemp & CBD Businesses” here.

Nationwide hemp rules released in the closing days of the Trump Administration aren’t on hold, according to the U.S. Department of Agriculture.

But the agency will be reviewing all programs implemented by the previous administration, as is common when there is a new president.

USDA spokesman Matt Herrick told Hemp Industry Daily in an emailed statement that “we have no specific programs or rules to point to at this time that are on hold, but it’s proper for a new administration to have adequate time to review existing programs as well as those implemented by the previous administration in the final days of their tenure.”

He didn’t say whether hemp producers finalizing planting plans for 2021 should expect USDA to again open the rules for public comments.

The agency already re-opened them once, but some hemp activists are hoping USDA will take another round of feedback.

That’s because the White House issued a memo late Wednesday instructing federal agencies to consider additional 30-day comment periods for rules that have been finalized but not yet taken effect. Hemp falls into that category; the rules were published Tuesday but don’t take effect until March.