KYHA Submits Comments to DEA re: Interim Final Rule (IFR)

October 20, 2020

RIN 1117-AB53/Docket No. DEA-500

DEA Comment Letter Final Draft

United States Drug Enforcement Agency
DEA Federal Register Representative/DPW, Diversion Control Division 8701 Morrissette Drive
Springfield, VA 22152

ATTN: U.S. Drug Enforcement Agency,

Thank you for being open for comments on the proposed changes to the 21 CFR Parts 1308 and 1312. The Kentucky Hemp Association is a non-profit focused on moving the hemp industry forward and preparing the industry for work in both normal times and extraordinary times. Hemp has come a long way since the 2014 Farm Bill, and currently billions of dollars are circulating within the industry. Cash flow, investments, farms, and payroll for committed employees across the country are driving factors in the success of hemp as a commercial crop. Even with a small economy of scale, we have the support of local, state, and federal leaders and law enforcement in our respective communities.

We are unified in our efforts to solve problems in the hemp industry and are committed to finding solutions that will also help regulators do their jobs. Many of our colleagues believe that sensible regula- tions can be effective, but it must also be noted that hemp businesses are responsible, tax-paying, and lo- cally employed small operations. From genetics, to farming, to processing, and retail, there are standards of operating that have been employed effectively, and regulating is no exception. Farmers and business owners cannot operate in a “Grey Area” and need a chance to comply with new regulations in sensible steps and timelines. It is not an easy problem to solve, but we can be of service to find solutions for our mutual concerns.

First, we wish to thank you for relinquishing the vast majority of the regulatory process to the USDA and FDA, where all food, drug and cosmetics items should be. It makes sense for us to work with the FDA to improve and grow the industry, while ensuring that products are safe and effective for con- sumers. We also appreciate the removal of import/export provisions for FDA products containing CBD as this will save hemp producers a great deal of money, time, and paperwork each year. We can continue to work with our respective Departments of Agriculture and the USDA to import and export goods as we do for all commercial produce, trees, and seeds.

We are concerned with one of the topics mentioned in the DEA Interim Final Rule, which is the issue of concentrates above 0.3% THC being considered a controlled substance.

Transporting “In-Process Material” out-of-state has been a challenge since the inception of legitimate processing within the hemp industry. It has been challenged by businesses, processors, brokers, and farmers within the hemp industry and can be an inhibitor of growth or a catalyst for success. Much like the oil and gas industry, there are segments and stages of the refining process, and it is difficult for many processors to be 100% compliant with federal THC limits in all these phases. All of this “In-Process Material” is generally “hot”, meaning above 0.3% THC, but is not intended or allowed for direct consumption in its state. Refinement would be the only way to get it to a retail product, and our intent is to do it safely and efficiently.

Our state recently created a “waiver agreement” between our Department of Agriculture and our State Police, to track each producer who either processes, purchases, or manufactures products with con- centrates above 0.3% THC. At no time are these concentrates being sold to members of the general pub- lic. We feel that by registering our concentrates with the state and state law enforcement, we are able to continue to grow the industry, produce valuable products, and make sure that concentrates aren’t being sold as marijuana.

Please keep in mind that a concentrate of 0.6% THC or so is still going to have very little drug value to anyone on the streets. Currently, dispensaries in legal marijuana states are selling cannabis flower that is upwards of 20-25% THC, and concentrates that are vastly higher than that. We feel that an extract which is derived from hemp will never have the drug value of some of the 70% or greater THC extracts being sold legally right now. There will always be exceptions to every rule, but with a concentra- tion of 1 or 2% THC, there is no incentive to try to sell it on the streets.

It would be considerate for your agency to craft a similar waiver to monitor these transactions and provide protection for those wanting to expand interstate commerce through this platform. This would only be eligible for those that have hemp licenses in designated states, and identify those that aren’t “play- ing by the book.” In transport alone, hundreds of liters of raw oil is worth a small fortune, so the IRS would probably be interested in a better tracking system as well. This is also important for employee safety within a hemp business because this decreases black market involvement within the hemp industry. We would absolutely be willing to help craft a draft form for your agency that can apply to all 50 states, as this is an important issue of concern.

Finally, we realize that the federal government wants sensible regulation on hemp and will do what is necessary to have a full-fledged, global industry. We only ask you to look at the situation from our per- spective. Our stakeholders are some of the brightest and innovative farmers America has to offer. We range from multi-generation family farmers to PhD scientists, professors and executives that have provid- ed the research and innovation needed to figure out what our industry needs. Many of our regulators do not recognize the pitfalls and challenges we have all experienced, even as we develop new solutions every day.

Give us the opportunity to find solutions and we will help your agency overcome these challenges. We are willing and able to provide the data, research and support to do this and help the FDA, USDA, and local Departments of Agriculture regulate hemp to the best of their ability. Thank you for taking the time to read our comment letter addressing our concerns and we look forward to engaging with your agency in the future.

Sincerely,

Kentucky Hemp Association:

President, Tate Hall
Vice President, Jana Groda Secretary, Katie Moyer Treasurer, Rick Vance