On April 20, 2017 at 4:20 pm, a group of 18 farmers and business owners were gathered in a small demonstration kitchen at the back of the Natural Grocers on Colfax Avenue in Denver. Outside the large square-framed windows, revelers scrambled across the street toward the Colorado State Capital building, excited to indulge in the time honored 4/20 tradition of listening to chill beats, doing nothing in particular, and getting righteously high.
But these farmers and business owners weren’t at the Natural Grocers on Colfax because they cared about celebrating during the world’s official cannabis holiday. They were gathered to learn about the opportunities, challenges and requirements with USDA organic certification for industrial hemp.
One moment perfectly captured the dichotomy between the two “cannabis” industries (“industrial hemp” and “marijuana”).
A man in a hoodie eating a foil-wrapped taco stopped to gaze into the grocery store window. The 4/20 celebrator was perplexed to see a group of people listening to a PowerPoint presentation on such a festive Denver afternoon.
Meanwhile, Damian Farris, co-owner of Colorado Cultivars, the largest domestic certified organic hemp grain supplier, explained the pricing difference between conventional and organic products. “To understand where hemp is going take a look around your local grocery store. Organic usually sells for 1.5 to 2 times more than conventional. So you see the value and potential for U.S. certified organic hemp.”
The man in the hoodie continued on his way.
Organic Certification for Industrial Hemp
Sam Welsch, President of OneCert, hosted the meeting. OneCert is an accredited third-party certifier that complies with organic regulations administrated by the USDA’s National Organic Program (NOP). Once a third-party certifier like OneCert is accredited, it has the authority to approve or deny applications for organic certification.
Farmers, ranchers and business owners can get numerous agricultural products certified organic. The list includes crops, livestock, dairy, processing and handling—each its own part of a larger organic certification process.
Brian Olesen, an organic farmer and owner of Plum Daisy Jams and Jellies, told Hemp Business Journal it can take three years to get a farm to organic certified. “I’m here to learn about organic hemp and this opportunity,” he said. “We grow organic apricots, peaches and plums—check out our jams on QVC.”
OneCert held the meeting to explain how organic hemp certification is new in the United States. “We’re here today to learn about the requirements farmers and business owners need to know so their application for organic certification will be successful,” Welsch said. “We’ve certified 16 for hemp—with around 40 to 50 applicants.”
Welsch explained to Hemp Business Journal there are over 200 operations certified to the National Organic Program worldwide. A lot of hemp is certified to Canadian and EU standards and then imported into the U.S. under equivalency arrangements, with 99 handling operations that list hemp as a product. Six of the 99 are certified by OneCert.
Farris explained the process to become certified organic through OneCert was very time consuming, taking almost a year, and required lots of detailed paper work. “All of your equipment, processing, packaging, anything that touches the plant must be approved by the certifier. Literally everything needs to be in compliance, the entire process,” he said.
Welsch told those gathered the costs to go through the certification process with OneCert ranges from $1,00-$5,300 and to expect inspections to be thorough and rigorous. “Have your paperwork organized and ready for us. That makes everything go smoother,” he said.
The NOSB and the Big 3 Regulators (USDA, FDA & DEA)
According to the USDA website, there are currently 80 certifying agents accredited and authorized to certify operations to the USDA organic standards. Of these, 48 are based in the U.S. and 32 in foreign countries. Welsch explained OneCert is not the only certifier certifying hemp. There are 18 domestic crop operations growing industrial hemp and 10 of those are certified by OneCert.
But if there are so many accredited certifiers why has OneCert certified over half of them for domestic hemp? And, why does OneCert require applicants to sign an Industrial Hemp Affirmation document? Simple questions, complicated answer.
At the same time as the Natural Grocers meeting on Colfax, the National Organic Standards Board (NOSB) was holding its bi-annual meeting at the Downtown Denver Sheraton. The NOSB meets to determine whether certain substances and production methods are acceptable for use in food items certified as organic and then votes on certain issues. If an NOSB proposal receives a decisive vote (2/3 majority) by Board members in favor of the proposed motion, it becomes a recommendation to the USDA, and is provided to the Secretary through the AMS National Organic Program (AMS NOP).
The AMS National Organic Program published a Handbook that includes Instruction on Organic Certification of Industrial Hemp Production. The instruction refers to the Statement of Principles on Industrial Hemp issued on August 12, 2016 by the USDA in consultation with the U.S. Drug Enforcement Administration (DEA) and the U.S. Food and Drug Administration (FDA).
And therein lies the bureaucratic rub for organic hemp. Hemp industry farmers and business owners told Hemp Business Journal it isn’t clear if the USDA is adhering to the congressional intent of Sec. 7606 of the 2014 Farm Bill or looking to apply the DEA’s intent to try to regulate some constituents of industrial hemp (e.g. Cannabidiol) as it does marijuana under the Control Substances Act (CSA).
What is clear is the Statement of Principles provides the USDA’s opinion on how its applying federal law. The Statement of Principles is not law—it’s the USDA’s interpretation of the law, with the FDA and DEA sitting at the table providing “consultation.” And while laws and opinions are vastly different, the confusion over it has most certifiers sitting on the sidelines while OneCert becomes the go-to certifier for domestic hemp producers.
Public Comments Heard, Not Answered
During the NOSB meeting, public comments were heard from across the agricultural industry including four individuals in the hemp industry: Lauren Stansbury, Public Relations for the Hemp Industries Association, Tim Gordon, President of CBDRx and COHIA, Janel Ralph, CEO of Palmetto Harmony, and Ed Lehrburger, CEO of Pure Hemp Technology. All of their comments contained a similar message, and one that Colleen Keahey, Director of the Hemp Industrial Association, shared with Hemp Business Journal:
We ask that the NOSB make a strong recommendation to the USDA-NOP to immediately clarify the instruction “Organic Certification of Industrial Hemp Production” to allow organic certifications of Industrial Hemp adhering to the congressional intent of the Sect. 7606 definition, and removing the language “as articulated in the Statement of Principles on Industrial Hemp” from the instruction.
Miles McEvoy, Deputy Administrator for the National Organics Program, was unavailable for comment but the AMS Natural Organic Program’s office provided this statement:
Hemp is not currently on the National Organic Standards Board (NOSB) work agenda. Those with an interest in organic hemp production are welcome to send a letter to the AMS National Organic Program explaining their perspective. Letters can be sent to: National Organic Program, 1400 Independence Avenue, S.W., Mail Stop 0268, Washington DC 20250.
Hemp Business Journal contacted the USDA but no one responded to the interview request.
Discriminating Against Domestic Products?
During her public comments, Stansbury asked the NOSB why Canadian hemp products were being certified organic and being imported into the United States, yet hemp farmers and producers in the United States don’t have a clear path to USDA Organic Certification. “It’s a clear contradiction and discrimination to domestic producers,” she said.
Bob Hoban, the Managing Partner at Hoban Law, explained the legal discrimination argument in a guest post on New Cannabis Ventures published last summer a month before the Statement of Principles were released. He suggested domestic companies do the following if they want to be certified to grow organic hemp:
Submit an application to a certification agency. That agency is required to accept applications by 7 C.F.R. § 205.501(a)(19). Organic certification requires crop rotation, so the applicant should be requesting other crops for certification in addition to hemp. That will ensure that their application will be accepted. It may not be possible to obtain organic hemp seed or planting stock, so the applicant may use untreated non-organic hemp seed or planting stock. Hemp production does not violate any provision of the USDA organic regulations. It is being certified in other countries and hemp products are being imported and sold in the USA with labels displaying the USDA organic seal. Choosing a certification agency that has already certified hemp will provide greater assurance that the agency will limit its review to compliance with USDA organic regulations. Other laws and regulations may also be applicable to the growing of hemp and processing of hemp products. A USDA accredited organic certification agency’s authority is limited to assessing compliance with USDA organic regulations. Organic certification does not affect the enforcement of any other law or regulation that may also be applicable to your operation. -Bob Hoban
Whether it’s discrimination or a bureaucratic web of governmental interests that’s holding up organic hemp, two things are clear: OneCert is certifying hemp USDA Organic, and Colorado Cultivars is a USDA Organic certified hemp producer.
“Colorado Cultivars is probably 30% of the U.S. organic hemp market,” said Farris. “And we’re planting more now.”
“As long as they comply, we will certify. And you know what, I might even one day certify marijuana,” said Welsch, as he nodded with a smile to the revelers outside the window.