Hemp industry leaders laid out a new framework for enforcing state-level regulations and called for less burdensome licensing fees for the growing industry.
But all state-level work to regulate the business, which the Kentucky Hemp Association says employs more than 3,000 people, will be moot unless Congress acts before Dec. 11.
Most states, including Kentucky, have passed their own legislation and oversight of hemp or cannabis products, according to the National Conference of State Legislatures. Since the 2018 Farm Bill opened a loophole that launched the hemp industry, Kentucky has introduced its own framework to limit the amount of THC in products, age-restrict adults to 21 and older and require specific business licensing.
But on Dec. 11, the floor will fall out from under hemp businesses. Sen. Mitch McConnell closed the loophole he authored over concerns about children, product safety and synthetics. The new language will effectively ban intoxicating products and those containing more than a trace amount of THC. That ban was pushed back a month, and is now looming during the lame-duck period.
“We're here this morning to tee up next year's legislative session and what we hope to accomplish with you guys next year,” said Jim Higdon, co-founder of Cornbread Hemp. “But before we do, we have a critical task to achieve in Washington D.C. where the legality of our industry is under threat.”
Congressman Andy Barr, who is now running for Senate against former state Rep. Charles Booker, has proposed his own strict framework for hemp products. His bill in many ways partly aligns with what industry leaders are calling for — age limits, third-party testing, manufacturing standards and potency caps on THC per serving, which already exists in Kentucky. After touring Heritage Hemp Company in Coxs Creek, he said hemp could help replace the hole left by tobacco’s decline.
“We've been looking for substitute crops for a long time since the decline of tobacco production in Kentucky. That was such a signature crop, signature industry for Kentucky farmers,” Barr said.
Barr’s bipartisan bill hasn’t moved yet, but some think either regulations or another temporary reprieve for the hemp industry will be included in the next budget bill; the current continuing resolution expires on Dec. 11 too. Barr said hemp farmers need predictability.
“They want to be viewed as a responsible and mature industry that will have a future,” Barr said.
Some elements of the bill give hemp growers and sellers pause. To protect against marketing aimed at children, Barr’s bill bans “bright colored products and packaging” or labels showing characters, animals, vehicles, candy or fruit. It also creates dual taxes, both based on the retail price of THC products and on the potency of beverages.
Annie Rouse, owner of Cannabuzz and board member of the Kentucky Hemp Association, looked ahead to the Kentucky General Assembly session beginning in January. Assuming the hemp ban does not take effect, she called on lawmakers to sharpen enforcement mechanisms for hemp businesses in the state rather than further tightening regulations.
“There is a rumor that's going around that says that hemp is not regulated. This is absolutely false,” Rouse said. “We are regulated very well, just not efficiently regulated, because we're regulated by three departments across three executive branches.”
Rouse said people who don’t hold licenses or fail to follow the law should be ticketed instead of needing to go to court and pay a fine there. She also argued hemp business licenses are significantly more expensive than the same licenses for alcohol.
“I pay $13,780 in licensing fees to operate in this manner, which is the exact same way that distilleries and breweries operate in the state,” Rouse said. “Conversely, the same business operations for a large-scale distillery pays $3,990.”
