The State of Kansas Hemp

The wait for an official industrial hemp program in Kansas is finally over.  On January 24, 2019, the Kansas Secretary of State published the Department of Agriculture’s approved industrial hemp regulations in the Kansas Register.  Senate Bill 263, enacting the Alternative Crop Research Act was signed into law by Governor Jeff Colyer in April of 2018 and the state has made quick work of developing a set of rules and regulations to guide the cultivation and production of industrial hemp in Kansas.  Industrial hemp is defined as any variety within the plant species Cannabis Sativa L that contains a delta-9 tetrahydrocannabinol (THC) concentration of no more than 0.3% on a dry-weight basis.  While THC is just one of many chemical compounds called cannabinoids found in the cannabis plant, it’s the one that produces a psychoactive reaction and gets us “high.”

 

Hemp and the law

In the 2014 Farm Bill, the federal government made the distinction clear between industrial hemp that does not have a sufficient level of THC to provide a psychoactive effect and varieties of marijuana with higher levels of THC, opening the door for university and state department of agriculture research programs. Then, in 2018, the federal government signed the 2018 Agriculture Improvement Act (2018 Farm Bill) into law, identifying industrial hemp as federally legal to cultivate, process, sell and transport across state lines.  Cannabis containing higher THC concentrations remains federally illegal as a DEA Schedule 1 drug.  Although the 2018 Farm Bill will help industrial hemp producers by allowing access to bank accounts and protecting them from federal prosecution, it is certainly not a license to begin freely growing hemp.  The responsibility still remains with the states to enact their own legislation and rules to oversee the production of industrial hemp within their jurisdictions.

Industrial hemp is heralded by many as a miracle crop because it serves as an environmentally-friendly renewable resource with applications in manufacturing, food, consumer goods, bio-fuels such as ethanol, grain feed, and medicine.  Of its non-psychoactive cannabinoids, cannabidiol (CBD) has become popular with those looking for natural remedies to health conditions such as inflammation and anxiety. Because both industrial hemp and marijuana are technically the same species of plant, state governments face the challenge of properly regulating the production of Cannabis Sativa L to ensure that THC concentrations stay below 0.3%.  That includes states such as Colorado where programs exist to grow both marijuana and industrial hemp.  Regardless of the legality of marijuana federally and at the state level, a certain level of protection will likely always exist in legislation to keep consumers safe so it’s clear what level of psychoactive THC is contained in their products.

 

State programs and licensing

Kansas is just one of many states implementing research programs through universities and departments of agriculture.  A small handful of states have not adopted any industrial hemp legislation, while an even smaller group have graduated from research programs to the full commercial cultivation of hemp.  Even in states with the most mature hemp programs like Colorado and Kentucky, licensing for producers and testing of plants and products is still required and their programs are constantly evolving as they identify areas for improvement in their legislation.

Applications for Kansas licenses become available on February 8, 2019 and must be post-marked by March 1, 2019 in order to be considered for the 2019 growing season.  A $200 non-refundable fee must accompany each application.  Additionally, any individual engaged in cultivating, handling, processing or transporting the hemp must submit fingerprint cards and complete a background check waiver.  If the application is approved, a varying license fee will be required depending on the type of license requested ($1,000 for growers, $2,000 for distributors, $3,000 for processors of fiber and grain, $6,000 for processors of floral material).  That fee is good for the entire year for any operations carried out under the particular license and would be paid again each year upon renewal of the license.  A few states charge lower fixed fees but then charge an additional fee that’s calculated per acre or square foot for growers and per weight for processors and distributors.

 

Kansas in review

Beyond the initial application process and fees which are fairly consistent with those in other states, how does the Kansas Industrial Hemp Research Program compare to other programs?  We believe it’s fairly competitive and that the state legislature, Kansas Department of Agriculture and state advisory board have developed a reasonably structured program to begin the process of researching the commercial feasibility of industrial hemp in Kansas.  Disclaimer: this evaluation should not be considered legal advice, is purely our opinion and summarizes just a few of what we felt were interesting takeaways from the finalized rules.  Full details of the regulation can be found through the Kansas Department of Agriculture’s Plant Protection and Weed Control division.

A few interesting items

•  If you’re thinking about doing research at your home, stop right there.  Licenses will not be given if an application includes a home or residence as the location of any hemp-related activities.  You are required to provide exact GPS coordinates of any locations involved with the program and what each location is being used for.

•  You must have a license for the activity you wish to engage in.  For example, if you want to grow hemp and then extract oils from it, you would need to apply for and receive both a grower license and a processor license.

•  You are allowed to sell anything you grow, process or distribute for a profit which includes sales to people in other states as long as they are legally allowed to possess the hemp material based on the laws within their particular states.

•  Many other states require that an applicant provide proof of previous agricultural experience and/or the equipment necessary to engage in the cultivation or processing of hemp.  Kansas does not require this in their regulation.

•  Farmers can grow on a maximum of 80 acres in 2019 under one license.  There is a loophole for a farmer interested in growing on more than 80 acres, though.  The regulation allows for multiple licenses in a single category or multiple categories, so a farmer could submit multiple grower applications (paying the application and license fees for each) and potentially be awarded licenses for a cumulative amount of land greater than 80 acres.  If you’re feeling that ambitious, more power to you, but consideration should be given to the risk of loss involved, especially for a crop that hasn’t been grown commercially in the state for half a century.

•  In some states, there is a minimum acreage requirement for growing.  Kansas does not have this requirement.  There’s also no penalty if you apply to grow on 40 acres and end up growing on only 1.

•  The primary licensee on any application must be a Kansas resident.  There is no indication that other licensees on your application must be Kansas residents as well.

•  Any individual who will be involved with your business needs to be included on your license, background checked and fingerprinted.  Additionally, each motor vehicle involved in the transportation of hemp material must be included on the license.  That could potentially pose issues for harvesting due to the use of seasonal workers, rented trucks, etc.  Licensees do have the ability to amend their application to account for this, but it does require a $750 be paid for each amended application.  One $750 amendment to your application could potentially include an unlimited number of additional individuals and vehicles.

•  You can’t sell your license to someone else.  If anyone tries to sell you one, run (then report them to the Kansas Bureau of Investigation).  Only the Kansas Department of Agriculture can issue licenses and they are issued to individuals.  A company cannot hold a license.

•  Your license is only good for your particular research area.  For example, if another individual in the program with an active grower license asked you to come help harvest, your license would not be valid in their research area.  You would need to be included on their initial licensing application or added via an amended application.

•  For growers, you must notify the Department of Agriculture at least 30 days before each intended harvest date.  The department will then take a sampling of the plants when it is time to harvest to confirm their THC content is less than 0.3%.  You have 10 days to complete your harvest after receiving a passing analysis.  In the event you can’t complete your harvest in 10 days, you do have the opportunity to request a second harvest that initiates a new sampling and analysis by the department but does incur an additional testing fee.

•  If your hemp contains more than 0.3% THC when tested, you will have the opportunity to request a second sampling be tested.  If it too, contains an unacceptable level of THC, you will be required to destroy your entire crop.  If it contains more than 2%, you will be referred to the Kansas Bureau of Investigation and other law enforcement for further investigation.

•  Follow the rules or your license will be revoked and you’ll be required to destroy any hemp material or plants in your possession and will be ineligible to participate in the Kansas hemp program for the next five years.

…oh, and industrial hemp mazes are explicitly prohibited!

 

Research is critical

As with any emerging industry, misconceptions, misunderstandings and misinformation abound regarding both industrial hemp and marijuana.  Accuracy of information is especially important, though, when it comes to cannabis because of the enhanced level of regulatory scrutiny.  We strongly encourage anyone interested in entering the cannabis industry to visit the websites of your state department of agriculture regarding industrial hemp or department of health regarding marijuana to do your research on the rules and regulations in your area.  As always, you are more than welcome to reach out to us directly with questions and comments at [email protected]

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