Hemp-CBD Across State Lines: Iowa

22 Sep Hemp-CBD Across State Lines: Iowa

The Agriculture Improvement Act of 2018 (“2018 Farm Bill”) legalized hemp by removing the crop and its derivatives from the definition of marijuana under the Controlled Substances Act (“CSA”) and by providing a detailed framework for the cultivation of hemp. The 2018 Farm Bill gives the US Department of Agriculture (“USDA”) regulatory authority over hemp cultivation at the federal level. In turn, states have the option to maintain primary regulatory authority over the crop cultivated within their borders by submitting a plan to the USDA.

This federal and state interplay has resulted in many legislative and regulatory changes at the state level. Indeed, most states have introduced (and adopted) bills that would authorize the commercial production of hemp within their borders. A smaller but growing number of states also regulate the sale of products derived from hemp.

In light of these legislative changes, we are presenting a 50-state series analyzing how each jurisdiction treats hemp-derived cannabidiol (“Hemp CBD”). Each Sunday, we summarize a new state in alphabetical order. Today, we turn to Iowa.

On May 13, 2019, Iowa Governor Kim Reynolds signed into law Senate File 599, aka the Iowa Hemp Act (the “Act”). The Act requires Iowa’s Department of Agriculture and Land Stewardship (“DALS”)  to prepare and submit a plan for hemp cultivation to the USDA. DALS will assume primary authority over the “production of hemp” after the USDA approves Iowa’s state plan. Under the Act, “produce” means “to provide for the planting, raising, cultivating, managing, harvesting, and storing a crop.” DALS will issue hemp licenses and the Act outlines the application process and licensee qualifications.

A hemp licensee is exempt from criminal offenses for “producing, possessing, using, harvesting, handling, manufacturing, marketing, transporting, delivering, or distributing hemp” so long as the licensee is in compliance with the Act and DALS subsequent regulations. DALS will likely issue regulations elaborating on what is required to produce, process, manufacture, market, transport and deliver hemp and hemp products.

The Act defines hemp products as “an item derived from or made by processing hemp or parts of hemp, including but not limited to any item manufactured from hemp , including but not limited to cloth, cordage, fiber, food, fuel, paint, paper, particleboard, plastic, hemp seed, seed meal, or seed oil. Hemp product does not include any of the following: (1) An item or part of an item with a maximum delta-9 tetrahydrocannabinol concentration that exceeds three-tenths of one percent on a dry weight basis. (2) Hemp seed that is capable of germination.”

The Act allows for the retail sale of a hemp product if the hemp was “produced in this state or another state in compliance with the federal hemp law or other applicable federal law.” In addition, “[t]o the extent consistent with applicable federal law, a derivative of hemp, including hemp-derived cannabidiol, may be added to cosmetics, personal care products, and products intended for human or animal consumption. The addition of such a derivative shall not be considered an adulteration of the product, unless otherwise provided in applicable federal law.” Reading between the lines, it sounds like the Act mandates that Iowa follow the FDA’s guidance in determining what hemp products will be permitted for sale within the state’s borders.

Though the Act seems to allow for the sale of at least some Hemp-CBD products, the sale of Hemp-CBD remains risky in Iowa until the USDA approves of DALS’s state plan. Don’t believe me? Then take Iowa Attorney General Thomas Miller’s word for it. AG Miller issued a Statement on Hemp and CBD Products after Governor Reynolds signed the Act into law. Miller’s position on the matter is summed up nicely in this particular passage of that Statement:

The only provision of the Iowa Hemp Act that can be currently implemented is Section 3, which requires the [DALS] to prepare a state plan to be submitted to the USDA. Per Section 18 of the Act, the other provisions of the [Act]  cannot be implemented until after the USDA approves Iowa’s state plan. Therefore, at present time, no one can grow, manufacturer, or process hemp in Iowa, outside of the two mCBD manufacturers licensed by the Iowa Department of Public Health.

I need to briefly interrupt AG Miller to note that “mCBD manufacturers” refers to Iowa’s limited Medical Cannabidiol Act, which allows patients to legally possess “medical cannabidiol” if they have a qualifying condition and obtain a registration card based on a recommendation from a healthcare professional. See Iowa Code Ann. § 124E et seq. OK, now back to the statement:

In addition, the coordinating amendments, many of which remove hemp and hemp products from the Uniform Controlled Substances Act, do not become effective until after the USDA approves Iowa’s state plan. Until the coordinating amendments of the Iowa Hemp Act are effective, any product sold over-the-counter containing CBD or THC technically falls within the definition of marijuana and is considered a Schedule I controlled substance.