2019 Brings Potential Changes to Hemp Production in Maryland

Industrial hemp being grown on University of Kentucky research farm. Image by University of Kentucky

The article is not a substitute for legal advice. 

            As I have discussed earlier, the 2018 Farm Bill makes significant changes to the classification of hemp and allows states to begin to develop regulations for the legal production of hemp.  The 2018 Farm Bill removes hemp from the definition of marijuana under the Controlled Substances Act and allows for states and tribal governments to begin developing hemp production plans.  Hemp produced under these plans will potentially be eligible for the federal crop insurance program.  The Maryland General Assembly during the previous session passed legislation allowing the Maryland Department of Agriculture (MDA) to develop a hemp production plan for the state.  MDA will be able to create this hemp production plan once USDA releases the guidelines for the state programs.

State and Federal Hemp Production Plans

            Although hemp is no longer a Schedule 1 drug, this does not mean it is legal to grow.  To be legal, Section 10113 requires that a state, tribe, or federal government develop a hemp production plan.  A hemp production plan is the way producers will be monitored and will regulate the production of hemp.  Section 10113 lays out two routes for a producer to begin producing hemp legally. 

The first route is for a state or tribal government to take charge of regulating hemp production within their boundaries.  To take charge, a state department of agriculture will submit to USDA for approval of a hemp production plan.  The hemp production plan must include:

  1. The system of land where hemp is produced, including the legal description of the land.  The system will need to maintain land records for at least three years.
  2. Testing procedures to demonstrate that hemp produced has less than 0.3 percent THC concentration level per dry weight basis.
  3. Procedures for destroying any plants and products with THC concentrations higher than allowed by the law.
  4. Procedures to enforce the law.
  5. Procedures for conducting at minimum annual inspections of a random sample of hemp producers to verify hemp produced in the state does not violate the law.
  6. A system to convey hemp producers’ information to USDA.
  7. Certification to USDA that the state or tribe has the resources and personnel to carry out the requirements of the hemp production plan.

A producer will need to comply first with the state’s hemp production plan before legally growing hemp.  Currently, these plans are estimated to take a year to 18 months for states to finalize and USDA to approve.

            The second route is if the state or tribal government does not have an approved production plan, then USDA will develop a plan for them.  USDA’s ability to create a state or tribal plan will depend on the existing state or tribal laws.  For example, if state law still classifies hemp as a controlled substance, then USDA will not be able to develop a production plan.  If hemp production is permitted, then the USDA hemp production plan will need to meet the same minimum criteria required for states and tribal governments.

            One important note about the 2018 Farm Bill is that Section 10114 allows for hemp products to be transported freely through states.  States can still ban hemp products, but the state would not be able to limit transportation through the state of hemp products bound for other states.

Image of harvesting industrial hemp with tractor and mower. Image is by K-State Research and Extension.

Violations

            Section 10113 does lay out what potential violations would be.  A producer can negligently violate a state’s, tribal government, or USDA hemp production plan by failing to provide a proper legal description of the land that hemp will be grown on.  A producer could also violate by failing to obtain the required license or other authorization required under the plan before producing hemp.  Another example would be producing hemp with a THC level greater than 0.3 percent per dry weight.

            With the first negligent violation, a producer can correct the violation by complying with a corrective action plan developed by the state, tribal government o, USDA.  Three negligent violations in five years will result in the producer being barred from producing hemp for five years.  Section 10113 does not allow anyone with a felony drug conviction within the past 10 years to grow hemp under a hemp production plan. During the 2019 legislative session, the Maryland General Assembly passed HB 1123 which will make changes to the state’s hemp laws.  The bill was recently signed by Governor Hogan and will be effective on June 1, 2019. Maryland’s criminal law currently excludes industrial hemp from the definition of marijuana.  Section 5-101 currently excludes “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9-tetrahydrocannabinol concentration that does not exceed 0.3% on a dry weight basis.” (MD. CODE ANN., CRIM. LAW. § 5-101 (r)(2)(vi)).  On June 1, 2019, this definition will be revised to include “the plant Cannabis sativa L. and any part of that plant, including all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta–9–tetrahydrocannabinol concentration that does not exceed 0.3% on a dry weight basis.” (HB 1123).  This revision will make clear that products derived from industrial hemp are excluded from the definition of marijuana.  

            HB 1123 makes minimal changes to the existing hemp research program that MDA manages.  The most significant changes in HB 1123 will be with the creation of a Hemp Production Program.  The new program will allow growers who meet the qualifications in the state’s hemp production plan to grow hemp without participating in the research program.

            HB1123 will become effective on June 1, 2019, but this does not mean that growers can start growing hemp immediately unless they are already participating in the research program.  MDA still needs to develop a hemp production plan for USDA approval.  At this time, USDA has not published the regulations to implement the requirements for a hemp production plan but this is expected to happen later this year.  Maryland growers still need to wait for more leeway in growing hemp till sometime in 2020.

References

H.B. 1123, 439th Sess., (Md. 2019).

Court of Appeals Finds Indiana Hog Farm Entitled to Right-to-Farm Defense, Upholding Its Constitutionality

Image of hogs in modern hog facility. Image is by Kevin Chang via flickr.com.

The article is not a substitute for legal advice. 

            In 2019, we continue to see decisions involving the application of the right-to-farm law (RTF) defense in a few states.  Recently, the Court of Appeals of Indiana upheld a trial court’s decision applying the state’s RTF law.  In this case, the RTF law applied to claims that a neighboring hog farm was creating a nuisance.  Although over the past 18 months, we have seen decisions involving RTF laws not applying to agricultural companies being hit with large damage verdicts, it is crucial to remember that in many cases, the RTF defense continues to apply and prevent large verdicts.

Background

            Samuel Himsel’s family acquired farmland in the early 1990s which had been in agriculture since at least 1941.  Between 1994 and 2013, the property was consistently used for crop production.  In 2013, Himsel and his sons began to operate a hog operation on the farmland.  Before starting the operation, Himsel petitioned the county planning commission to rezone the farmland from agricultural residential to agricultural intense, to allow for the development of the hog farm.  At the public hearing, a few neighbors spoke in opposition of the rezoning request, including Richard Himsel (a cousin to Samuel Himsel).  The county commissioners’ unanimously approved the planning commission’s findings approving the rezoning.  None of the neighbors appealed the rezoning decision.  Shortly after the rezoning approval, the Indiana Department of Environmental Management (IDEM) approved two permits to allow for construction and operation of the hog farm.  No neighbors appealed the permits approvals by IDEM.  By late 2013, Samuel and his sons had entered into contracts, raising hogs in the newly constructed buildings.

            Neighboring Samuel Himsel was Richard Himsel, who had lived on his property since 1994 and had raised livestock there until 2000 when he retired and sold the farmland.  At one point, Richard also operated a large hog farm on his farm for two years before a fire destroyed the barns and he did not rebuild.  Robert Lannon, another neighbor, built his house in 1971 but his property had never been used for agriculture.

            In 2015, Richard Himsel and Robert Lannon and their respective wives sued Samuel Himsel and his sons.  In the lawsuit, the neighbors claimed nuisance, negligence, and trespass along with claims that the RTF law was unconstitutional.  Samuel Himsel and his sons answered, raising the RTF defense, and moved for summary judgment.  In 2018, the trial court granted Samuel’s motion for summary judgment on all claims.  The neighbors appealed this decision.

Court of Appeals Decision

            On appeal, the neighbors argued that the RTF defense did not apply based on language in the RTF law requiring the “operation would not have been a nuisance at the time the agricultural … operation began on that locality.” (§ 32-30-6-9(d)(3)).  With this argument, the court looks at when the farming operation began.  A row crop operation had started on the land around 1941, and the neighbors’ non-agricultural uses began around 1971.  The farm had changed to a hog farm in 2012.  Based on 2005 amendments to the RTF law, the switch to a hog farm was not a significant enough change to the farm to bar the RTF defense.  The amendments broadened the RTF’s coming to the nuisance defense to encompass all future nuisances.

            To the court, agricultural uses dominated the area the neighbors had moved into.  Some of the neighbors even kept livestock on their own properties.  The county’s planning commission and county commissioners recognized the agricultural nature of the area where the hog farm was built and attempted to maintain the agricultural nature of that portion of the county.  The nature of the area helped to demonstrate that the area in question was agricultural, not residential, and the hog farm would not have been a nuisance when established in 1941.

Image of piglets in hog facility. Image is by University of Missouri’s College of Agriculture.

            The court also disagreed with the neighbors’ arguments that allowing the RTF defense would allow large hog farms and other concentrated animal feeding operations (CAFO) of any size to be built in areas with a history of agricultural uses.  To the court, this argument ignored the administrative process farmers must work through to build a large CAFO.  In reviewing the regulatory process which farmers go through to build a CAFO, the court points out that the neighbors had an opportunity to challenge the building of the hog farm, but choose not to do so.

            Looking at the exception to the RTF defense, nuisance suits resulting from negligent operation of the farm, the neighbors offered no evidence demonstrating the hog farm were negligently operated or violated any of the state regulations related to CAFOs.  The neighbors did claim that the hog farm were negligently sited and should be construed as a negligent operation.  Siting would be the decision on where to build and operate the hog farm.  The court disagreed that negligent siting could create a claim of negligent operation to create an exception to the RTF defense.

Why Care?

            RTF laws continue to be in the news as neighbors challenge nearby animal operations.  Although we have seen stories over the past year highlighting a few decisions where courts have held RTF defenses do not apply, in the majority of states, the state’s RTF defense continues to be valid and offers a defense to nuisance claims.  As discussed in prior posts, decisions like the Himsel case highlight why agricultural operators and neighbors must understand how RTF laws operate in their states. 

            I did not include any of the arguments from the neighbors that the RTF law was unconstitutional in today’s post.  The court of appeals rejected these arguments.  Many courts when presented with a case arguing that the state’s RFT law is unconstitutional typically reject these arguments.  Currently, the only state where the RTF law has been found unconstitutional is Iowa.

            The final issue not addressed is attorneys’ fees.  Indiana’s RTF law allows for attorneys’ fees in certain situations.  In Indiana, attorneys’ fees will be awarded when the court finds the nuisance action frivolous (§ 32-30-6-9.5).  At this point, the neighbors may still appeal to the Supreme Court of Indiana, and we will have to see if the verdict is still upheld and if Samuel Himsel and his sons will request attorneys’ fees once the case is returned to the trial court.

References

Himsel v. Himsel, 18A-PL-645, 2019 WL 1758411 (Ind. Ct. App. April 22, 2019).

Ind. Code §§ 32-30-6-1, 32-30-6-9 to 32-30-36-9.5 (2019).

Court of Appeals Agrees USDA Did Not Have the Discretion to Implement New Program Benefiting Farmers

Combine dumping wheat into grain cart pulled by tractor in wheat field in Colorado. Image by Shannon Dizmang.

The article is not a substitute for legal advice.

            Many are paying attention to the implementation of the new Farm Bill, looking at how changes to existing and new programs will operate.  One issue that may come up after passing the 2018 Farm Bill is how quickly USDA must implement program changes or new programs.  In Ausmus v. Perdue, a group of Colorado wheat farmers recently had a lower court decision upheld.  The farmers had requested a new crop insurance product authorized in the 2014 Farm Bill before USDA’s Risk Management Agency (RMA) implemented a product for wheat.  The lower court ruled and the court of appeals agreed that although it might conflict with the agency’s other duties under federal law, RMA had to allow producers to use the program after the effective date of the 2014 Farm Bill and not when RMA implemented the regulations. 

Continue reading

2018 Farm Bill Makes Hemp Production Legal; But State Still Needs to Act to Take Advantage of Change

Close-ups of the industrial hemp research plots at the Spindletop research farm. Image by University of Kentucky

The article is not a substitute for legal advice.

I recently contributed an article to Maryland Bar Bulletin on changes to hemp restrictions in the 2018 Farm Bill and what needs to happen before farmers can grow the crop legally. The Maryland Bar Bulletin recently published the article online.

Continue reading

Wait for hemp production plans before you begin planting

The hemp research plot at the University of Kentucky College of Agriculture, Food & Environment Spindletop Research Farm was harvested Tuesday monring in Lexington, Ky.

The article is not a substitute for legal advice.

I recently contributed an article to American Agriculturalist magazine on changes to hemp restrictions in the 2018 Farm Bill and what needs to happen before farmers can grow the crop legally. American Agriculturalist recently published the article online.

Continue reading

Pilot Industrial Hemp Program Now Final and Allows For Research Growing of Hemp in Maryland

Image of first UK Industrial Hemp Field Day at Spindletop Research Farm. Image by University of Kentucky.

This post is not legal advice.

In 2016, the Maryland General Assembly first passed legislation allowing for the development of an Industrial Hemp Pilot Program in the state.  That program was recently updated in 2018 by House Bill (HB) 698 to allow farmers contracting with the Maryland Department of Agriculture (MDA) or Institutions of Higher Education (IHE) in Maryland to grow industrial hemp for research purposes. Production of hemp under the program must further either agricultural or academic research. HB 698 became effective on July 1, 2018, MDA has recently issued final regulations to implement this pilot program effective on January 28, 2019, and can be found here

Continue reading

Federal Estate Tax and Gift Tax Limits Announced For 2019

Image by Sridhar Sara. Image of barns and farm from road in Maryland

This is not a substitute for legal advice. 

            In November, the IRS announced the revised federal estate tax and gift tax limits for 2019.  The 2019 federal estate tax limit will increase from $11.18 million to $11.4 million.  The federal gift tax limit will remain at $15,000.  In Maryland, state estate tax limits will increase to $5 million, up from $4 million in 2018.

Continue reading

2018 Farm Bill Makes Hemp Production Legal Only In Certain Situations

The article is not a substitute for legal advice. 

Image of hemp research plots with University of Kentucky. Image by University of Kentucky College of Agriculture, Food and Environment.

            Farmers across the country are looking to begin producing hemp.  The 2014 Farm Bill allowed states to develop hemp research programs, but the 2018 Farm Bill significantly changes the classification of hemp and allows states to begin developing regulations for legal hemp production.  The 2018 Farm Bill removes hemp from the definition of marijuana under the Controlled Substances Act and allows states and tribal governments to begin developing hemp production plans.  Hemp produced under these plans will potentially be eligible for federal crop insurance.  Although the 2018 Farm Bill has made changes to hemp, it is still currently not legal to grow hemp in Maryland until the state develops and has an approved hemp production plan in place.

Continue reading

Year in Review: 2018 Ag Law Developments

Image of White Fence by Zach Stern via flickr.com

This is not a substitute for legal advice.

With 2018 over and 2019 underway, I want to take a minute to look back at many of the top legal developments impacting agriculture in 2018. Many of these legal developments may seem like repeats from my 2017 update; click here. For those interested embedded above is a join podcast episode I did with Tiffany Lashmet covering the top ag law developments. With those repeated issues, in many cases, we have seen resolutions, and we will probably continue to see litigation further develop with a few problems in 2019. Moving into 2019, we will likely see new issues emerge as a new Farm Bill is implemented and further developments in the international trade area. If you have not already signed up for updates, see the bottom of this post or any post on this site to get email updates sent to you as new content is available. Continue reading

A Word of Warning on Saved Seeds

4291486244_69520c3523_o

Tractor with square baler baying wheat straw.  Image is by Dennis Pennington, Bioenergy Educator, Michigan State University Extension from flickr.com

I recently wrote a column for Progressive Forage discussing saved seed laws and how these laws can impact seed selection in forage operations.  The column highlights patent law and the Plant Variety Protection Act (PVPA) and the penalties associated with each law. Continue reading