On August 20, 2020 the United States Drug Enforcement Administration (DEA) handed down its Interim Final Ruling; the contents of which may place greater scrutiny and testing requirements on domestic hemp production. Below is the American Fiber’s response to the recent ruling.
The ruling in effect requires that all US cultivated hemp remain below the 0.3% THC threshold at all times through its processing lifecycle. This ruling, if taken at face value potentially raises the risk profile for those processing and manufacturing hemp in the US. Under current standard cultivation and processing practices, the types of hemp cultivars grown in the US will undoubtedly be out of compliance at various points during the processing lifecycle. From pruning to extraction/distillation, the amount of THC present as a percent of the total mass in the plant fluctuates up until the final product is completed. That said, even if the intent of the DEA’s ruling is to simply clarify and not regulate, the market wide consternation brought on by this ruling is a glimpse into the unpredictable nature of cannabis cultivation in the US as it exists today.
American Fiber Co. applauds the DEA for taking an active role in the creation of a framework for the legal hemp business to operate, however we believe that this ruling is a net negative for domestic hemp production. The ad hoc nature, real or perceived, implicit in the DEAs ruling will likely have a chilling effect on US cultivators and processors, pushing them away from hemp, and potentially creating a supply vacuum left behind that could be filled with imported hemp from Central and South America.