Federal and Surrounding State Programs
The 2014 Farm Bill authorizes states and institutions of higher education to grow, process, and market hemp for research purposes. States with hemp laws that allow hemp to be grown within their states may operate pilot programs. Hemp varieties that test above 0.3% THC on a dry weight basis are not legally defined as hemp.
The 2018 Farm Bill authorizes the USDA to establish a nation-wide hemp production program. This program requires participating states and tribal nations to submit a state/tribal plan for approval that meets the requirements outlined in the IFR, 7 C.F.R. Part 990, published on October 31, 2019. Currently, 29 tribes and 18 states have approved plans under the IFR. The program also establishes a federal plan for producers in states or territories of Indian tribes that choose not to administer a state or tribe-specific plan, provided also that the state or tribe does not ban hemp production. The 2018 Farm Bill also authorizes states to continue to operate a pilot program established under the 2014 Farm Bill, until the program is discontinued on October 31, 2020, at which time Wisconsin must have a USDA-approved state plan in place to continue administering a state-operated hemp program in Wisconsin. The USDA-approved state plan must be compliant with the 2018 Farm Bill and the IFR. In addition, certain provisions of the 2018 Farm Bill apply to all states whether they are still operating a pilot program or are operating under the IFR. These include the expanded definition of hemp, the free market movement of hemp across all state boundaries whether or not a state has a hemp program, and the inclusion of hemp crops in farm credit banking loan programs and federal farm insurance programs.
Wisconsin, along with 16 other states, notified the USDA that for the 2020 growing season, it would continue to operate a pilot program under the 2014 Farm Bill. The Wisconsin Pilot Program has been in operation since 2018, and will continue for the 2020 growing season (ending October 31, 2020). The IFR was published one day before the Department’s program began accepting licenses for the 2020 growing season. The Department chose to continue with the pilot program in order to finish the pilot at the end of the 2020 season and begin with a new program at the beginning of the 2021 season.
Surrounding State Comparison
Minnesota
Minnesota’s pilot program began in 2016 under the 2014 Farm Bill and will continue to operate a pilot program until October 31, 2020. Operationally, the Minnesota program is very similar to the Wisconsin program with the primary difference in laboratory testing. Prior to 2019, testing was done in a private lab for delta-9 THC, and it did not include THC-A. In 2019, Minnesota switched over to testing for the post-decarboxylation concentration of THC which includes THC-A, and began transitioning to using a Minnesota state regulatory lab. The fee structure includes a grower license fee $150 with a growing location fee of $250, a processor license fee of $250, a license change fee of $50, an additional inspection fee for sampling of $250, and an additional testing fee of $125.
Illinois
The Industrial Hemp Act was passed in Illinois in 2018, at which time the pilot program became available to commercial hemp growers. As of March 30, 2020, Illinois has submitted a state plan to the USDA, and that plan is currently under review. Illinois is currently operating as a pilot program under the 2014 Farm Bill. Components of the Illinois program that differ from the Wisconsin program include specifications for laboratories to be approved for regulatory testing, a minimum growing area of ¼ acres for outdoor hemp crops and 500 square feet for indoor crops, destruction of hemp with a post-decarboxylation THC content of equal to or greater than 0.7% for an initial test, and a retest is allowed if the initial test is between 0.3% and 0.7% THC. If the retest exceeds 0.3% THC, the crop must be destroyed. Illinois allows licensing periods of one, two, or three years at $375, $700, or $1000 respectively.
Michigan
The Michigan hemp pilot program began in 2019 under the 2014 Farm Bill. The Michigan program tests for post-decarboxylation THC concentration. In the event of a failed initial regulatory test, the Michigan pilot program allows up to two resamples and tests, while the Wisconsin program allows one resample and test. The Michigan program is distinctly different in their use of testing facilities licensed under the Michigan Medical Marihuana Facilities Licensing Act, which allows certain licenses to test industrial hemp, or allows a testing facility approved by the department. In addition, growers must post signage at each boundary line of a grow location with state-specified language. Growers must also enter into a seed-to-sale tracking system established under the Marihuana Tracking Act. Michigan has a grower license fee of $100, a site modification fee of $50, and a processor, handler, broker fee of $1350. A $250 late fee applies to both licenses. Michigan continues in 2020 under the authority of the 2014 Farm Bill.
Iowa
Iowa Senate Bill 599 was signed into law in May 2019 and the Iowa hemp program became effective under the IFR. Iowa began accepting applications for its hemp program on April 1, 2020. As of April 28, 2020, Iowa had 18 licensed growers and six additional applications were under review. Iowa charges licensing fees of $500 plus $5/acre (0-5 acres), $750 plus $5/acre (5.1-10 acres), and $1000 plus $5/acre (10.1 – 40 acres). Iowa has a maximum 40-acre limit per license. Each license applies to one location only.
Data and Analytical Methodologies
The Department gathered information from several states and the federal government, related to regulations, sampling and testing protocols, compliance, importation, and other related subject areas. Staff at the Department reviewed this information and the Department’s legal authority, in drafting this emergency rule. The Department also reviewed the operation of the program over the prior growing seasons conducted under the previous emergency rules.
Department Contact
Questions and comments related to this rule may be directed to:
Melody Walker
Wisconsin Department of Agriculture, Trade and Consumer Protection
2811 Agriculture Drive
Madison, WI 53718
Phone: (608) 224-4586
______________________________________________________________________________
FINDING OF EMERGENCY
A finding of emergency is not required. Section 38 of 2019 Act 68 provides that the Department of Agriculture, Trade and Consumer Protection is not required to provide a finding of emergency for a rule promulgated under this section. SECTION 1: Chapter ATCP 22 repealed and recreated to read:
EMERGENCY RULE
Hemp
ATCP 22.01 Purpose. This chapter implements the hemp program created under s. 94.55 (3), Stats. ATCP 22.02 Definitions. As used in this chapter:
(1) “Applicant” means a person who has submitted a license application for a grower license or processor license.
(2) “Certified seed source” means hemp seed that is certified according to Wisconsin Crop Improvement Association standards.
(3) “Decarboxylated” means the completion of the chemical reaction that converts tetrahydrocannabinolic acid (THC-A) into delta-9 tetrahydrocannabinol (THC), the intoxicating component of cannabis. The decarboxylated value is also calculated using a conversion formula that sums delta-9 THC and eighty seven and seven tenths (87.7) percent of THC-A.
(4) “Department" means the state of Wisconsin department of agriculture, trade and consumer protection.
(5) “Destroy” means incinerate, till under the soil, compost, or dispose of in another manner approved by the department.
(6) “Distribute" means to sell, offer to sell, exchange, barter, or solicit orders for the sale of hemp or otherwise supply or furnish hemp to purchasers of hemp in this state, whether or not the transactions are made wholly or partially in this state or another state.
(7) “Division” means the division of agricultural resource management.
(8) “Fit for commerce certificate” means a document issued by the department or another state, Indian tribe, or the United States department of agriculture attesting that the hemp has been lawfully produced in compliance with this chapter or another state, tribal, or United States department of agriculture hemp program under Section 7606 of the Agricultural Act of 2014 or Section 10113 of the Agricultural Improvement Act of 2018.
(9) “Grower license” means the document that is issued by the department to a person after a successful grower application and review process and submission of all licensing fees.
(10) “Growing location” means a physical premises where a licensee operates as a hemp grower. A growing location may consist of multiple facilities, fields, greenhouses, or lots.
(11) “Harvest” means to remove from the growing substrate or to remove any part from the plant while in the growing substrate including seeds, flowers, buds, cuttings (plant sections originating from stems, leaves, or roots and capable of developing into new plants), leaves, or any other part of the plant for purposes of propagation, distribution, sale, or further use. Harvest does not include culling plants or plant parts if the plants or plant parts are subsequently destroyed.
(12) “Hemp” means the plant Cannabis sativa L., and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 THC concentration of not more than 0.3 percent on a dry weight basis or the maximum concentration allowed under federal law up to 1 percent, whichever is greater, as tested using post-decarboxylation or other similarly reliable methods. “Hemp” does not include a prescription drug product that has been approved by the U.S. food and drug administration.
(13) “Licensee” means a person possessing a grower license or processor license.
(14) “Lot” means a contiguous area in a field, greenhouse, facility, or growing structure containing the same variety or strain of hemp throughout the area.
(15) “Person” means an individual, corporation, partnership, limited liability company, government or governmental subdivision, or other legal entity.
(16) “Pilot program” means the department’s hemp research pilot program established under s. 94.55 (3), Stats., and this chapter. (17) “Processor license” means a document that is issued to a person after a successful processor application and receipt of all fees.
(18) “Registration” means the annual submission by a licensee of a registration form provided by the department, registration fees, and research agreement or other information as required by the department.
(19) “Registration fee” means the applicable amount that shall be paid by a licensee annually in order to plant, grow, cultivate, or operate.
(20) “Research agreement” means a contract between the department and the licensee, detailing the rules of the pilot program. This is a legally binding agreement between the state of Wisconsin and the applicant. Failure to adhere to the research agreement may result in removal from the pilot program.
(21) “THC” means total delta-9 tetrahydrocannabinol, or total delta-9 THC. Delta-9 THC is the primary psychoactive component of cannabis. Delta-9 THC and THC are interchangeable.
(22) “Variety” means a form of a plant created through plant breeding and cultivation. Cultivar, variety, and strain are interchangeable.
ATCP 22.03 Pilot program license.
(1) Grower license required. No person may operate as a hemp grower without a grower license from the department. A grower license issued under this chapter does not expire unless the pilot program expires or the license is revoked, but an annual registration shall be completed. A grower license may not be transferred to another person. The grower license allows a person to plant, possess, cultivate, grow, and harvest hemp under Wisconsin law. A grower license allows a person to store, handle, and convert into a marketable form under Wisconsin law the hemp cultivated, grown, and harvested under this grower license.
(2) Grower license application. A person applying for a grower license shall apply on a form provided by the department. An applicant shall provide all of the following to the department:
(a) The applicant’s legal name and address and any other name under which the applicant does business. If the applicant is a business entity, the full name of the business, the principal Wisconsin business location address, the full name of the individual who is authorized to sign on behalf of the business entity, phone number, and email address.
(b) If the applicant is a business entity, the name, title, and email address of the individual who will be primarily responsible for the hemp operations of the business entity and who will be the subject of the federal and state criminal background check.
(c) Informed consent form authorizing the department to conduct a federal and state criminal background check.
(d) The global positioning system coordinates for the center of each growing location where hemp will be planted, grown, cultivated, or harvested.
(e) Maps depicting each growing location where hemp will be planted, grown, cultivated, harvested, or processed with appropriate designation for entrances, boundaries, lots, and specific locations corresponding to the global positioning system coordinates and street address.
(f) Number of acres or square footage to be planted. The number of acres or square footage should be the maximum the applicant intends to plant, grow, cultivate, or harvest. Any increase in acres or square footage requires a license amendment and associated additional fees pursuant to s. 22.03 (7), Stats. (g) A description of the research being conducted under the registration.
(h) A signed research agreement.
(i) Other information reasonably required by the department.
