A recent rule published by the U.S. Department of Agriculture (USDA) introduces additional restrictions on companies providing services to marijuana businesses. Specifically, the Rural Utilities Service (RUS) has determined that participants in its government loan guarantee program, known as OneRD, cannot receive income from marijuana operations.
The new regulation clarifies that lenders are ineligible to engage with any entity that derives income from illegal drugs, drug paraphernalia, or other illegal activities as defined by federal law. The rule explicitly states, “A borrower that intends to lease space or enter into a power purchase agreement with a marijuana dispensary is not eligible,” as this would violate federal laws regarding controlled substances.
Officials are accepting public comments on the proposal until October 30. This rule underscores the ongoing complexities surrounding the conflict between state and federal marijuana laws. Despite these challenges, the USDA has been active in supporting the hemp industry since the legalization of hemp through the 2018 Farm Bill. This includes appointing industry stakeholders to advisory committees aimed at promoting U.S.-grown hemp globally.
In a related move, the USDA and the U.S. Trade Representative recently appointed Dylan Summers, vice president of government affairs for the CBD company Lazarus Naturals, to the Agricultural Technical Advisory Committee for Trade in Tobacco, Cotton, Peanuts, and Hemp. The committee was renamed to acknowledge hemp’s growing significance in agriculture.
While a USDA report indicates the hemp market began to recover in 2023 after suffering substantial losses in the previous year, the industry is now facing uncertainty as congressional bills advance that could effectively ban most consumable hemp-based cannabinoid products. The Congressional Research Service has warned that these bills may lead to confusion within the industry.
Furthermore, the latest Farm Bill contains provisions aimed at reducing regulatory barriers for hemp farmers, including potential changes to policies preventing individuals with felony drug convictions from obtaining licenses to produce industrial hemp. Lawmakers are also considering measures to allow hemp businesses to market products like CBD as dietary supplements or food items.
As the hemp industry navigates these evolving regulations, stakeholders remain hopeful for clarity and support in the face of federal restrictions.
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