The Department of Agriculture is publishing a final rule today allowing farmers to legally begin widespread hemp production. It has "requirements for licensing, maintaining records on the land where hemp will be grown, testing the levels of THC — the active ingredient in marijuana that causes a high — and disposing of plants" that could, David Pitt reports for The Associated Press.

The rule comes none too soon. Though the 2018 Farm Bill legalized hemp production, the industry has had growing pains as the crop's booming popularity has outpaced laws to govern its growth and distribution. Farmers have also had difficulties with banking and a lack of financial protections when distributors and processors don't live up to their promises. An article by Janet Patton in Kentucky's Lexington Herald-Leader gives examples; other states are seeing similar issues.

A group of Kentucky farmers filed suit against hemp processor GenCanna Oct.11, saying it had exploited their lack of legal and financial protection. They and GenCanna had agreed to buy a building from the Burley Tobacco Growers Cooperative Association for $1.2 million and turn it into a hemp-drying facility, but the farmers say the company never provided a promised dryer. They "also allege that GenCanna didn’t provide them with hemp to plant until it was too late in the growing season to make other arrangements, forcing them to accept 'horrific' contracts and plants that have produce a lower yield crop," Patton reports. Some small-time Ohio Valley hemp farmers have formed a cooperative, partly to gain a stronger position in bargaining with processors.

Seed quality is another problem. Lexington hemp company Elemental Processing sued Oregon-based HP farms for $44 million, alleging HP farms sold them the wrong kind of seed. Farmers need the CBD-rich "feminized" seeds, but it's impossible to tell the sex of a hemp seed until it grows. "According to the lawsuit, farmers planted 1,100 acres that had to be plowed under after the plants turned out to be male, costing the company millions," Patton reports.

Hemp processors and distributors are also facing problems, since banks are reluctant to lend to them, Patton reports. Until very recently, even major legal cannabis operations in states like California were obliged to operate as cash-only businesses because banks refused to deal with them. Things should be a little more stable in the hemp industry soon, since the the 2018 Farm Bill stipulates that hemp will be eligible for crop insurance starting next year, Patton reports.

In Vermont, the hemp supply has exceeded demand, so prices have plummeted. One processor told VtDigger that he paid $100 to $150 per pound for it last year, but this year he has paid $20 to $55.

Hemp's most powerful backer in Congress, Senate Majority Leader Mitch McConnell, said in a floor speech today about the USDA rule, "Our work to support the future of hemp is hardly over. There are ongoing conversations with the FDA on CBD products. Ongoing work to help growers and retailers to access credit and financial products. There will inevitably be ups and downs as this new industry develops, but today’s announcement is another crucial step."