Here’s the latest CBD news:
- USDA has released new guidelines detailing how hemp businesses can receive federal loans.
- USDA has approved Massachusetts’ state hemp plan.
CBD News Stories
- USDA Releases Guidelines for Hemp Businesses to Receive Federal Loans
- USDA Approves Massachusetts’ State Hemp Plan
USDA Releases Guidelines for Hemp Businesses to Receive Federal Loans
The US Department of Agriculture (USDA) has released a document with guidelines for servicing direct and guaranteed loans in relation to hemp.
USDA has gradually updated guidance on hemp in several programs and services to comply with the 2018 Farm Bill, which made hemp federally and fully legal.
“While it’s understood that this new commodity will likely produce some servicing challenges because of State and Federal regulations, it should be treated as closely as possible to any other agricultural commodity and serviced in the same manner,” wrote the agency in a memo to state offices.
The memo goes on to provide details about servicing in general, as well servicing direct and guaranteed loans.
Loans will begin being serviced by the Farm Service Agency (FSA) in 2020, and only licensed hemp producers will be eligible, including those operating under the 2014 Farm Bill.
Borrowers growing without a license will be considered in non-monetary default and losses will not be covered.
Licenses cannot be transferred under any circumstances.
For both direct and guaranteed loans, a contract is required that indicates four key points:
- provide for termination based on objective “for cause” criteria only
- require that the grower be notified of specific reasons for cancellation
- provide assurance of the producer’s opportunity to generate enough income to develop a cash flow budget and repay the loan, and
- be issued by a purchaser that has a reasonable and realistic prospect of fulfilling the contract.
For those requesting loan servicing, the FSA needs to see Farm Business Plans that “reflect realistic performance assumptions under current conditions for specific situations, including but not limited to:
- increased input costs by region
- intended use of hemp being produced (CBD, fiber, seed, grain, etc.)
- increased income for organic production
- changes in unit numbers and weights
- quality levels if production is for CBD
- other relevant factors that affect net income.”
FSA will conduct routine servicing on each type of loan.
Review the memo in full here.
USDA Approves Massachusetts’ State Hemp Plan
USDA approved the hemp plan of Massachusetts this week, increasing the total number of approved state plans to 17.
Other states that have been approved include Delaware, Florida, Georgia, Iowa, Kansas, Louisiana, Montana, Nebraska, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Washington, West Virginia, and Wyoming.
USDA has been gradually approving state plans and said that it “continues to receive and review hemp production plans from states and Indian tribes.”
The agency has so far approved plans from 42 tribes.
Plans that are currently under review are from Hawaii and the US Virgin Islands.
Seven states are in the process of drafting their hemp plans for USDA approval or resubmitting their plan: Arizona, California, Connecticut, Illinois, Nevada, Oklahoma, and Tennessee.
Eighteen states are choosing to grow under the 2014 Farm Bill provisions for one more growing season: Alabama, Alaska, Arkansas, Colorado, Indiana, Kentucky, Maine, Maryland, Minnesota, Missouri, New Mexico, North Carolina, North Dakota, Oregon, Utah, Vermont, Virginia, and Wisconsin.