Industrial Hemp Economies Ahead for Indian Country


By Corin La Pointe-Aitchison

The USDA will release regulations in August allowing for states and Indian tribes to manage their own industrial hemp programs.  With the rise in popularity and demand for CBD, a compound derived from hemp, many see industrial hemp as a new cash cow.  Some tribal communities have been waiting years for this day. 

With the passage of the 2018 Farm Bill, industrial hemp, meaning cannabis with a delta-9 tetrahydrocannabinol (“THC”) concentration of not more than 0.3 percent on a dry weight basis, was decriminalized.  

THC is the psychoactive compound in cannabis which produces a “high” in those who ingest it.  Hemp, while too low in THC to produce a high, can still be processed for its cannabidiol (“CBD”).  CBD has erupted as a new cure for a variety of ailments, and its demand has made hemp the hottest new agricultural commodity.

The 2018 Farm Bill allows for states or Indian tribes to have primary regulatory authority over hemp production within their territory.  To do this, the 2018 Farm Bill requires tribes or states to submit a formal plan to the United States Department of Agriculture (“USDA”).  At that point, the USDA has 60 days to approve or deny the plan.  Most thought this 60-day period started at the passage of the bill. 

The Flandreau Sioux, who have been trying to grow cannabis on their reservation for years, submitted their plan to the USDA immediately after the 2018 Farm Bill was passed.  After 60 days, the tribe sued the government and asked the court for an injunction against the government, forbidding them to interfere with the tribe’s hemp production. 

Flandreau argued that the passage of the Farm Bill mandated acceptance or rejection of the tribe’s hemp rules with the 60-day limit.  The Court disagreed, accepting the USDA’s argument that the triggering event was the issuance of USDA regulations, not the passage of the Bill.  As such, all plans submitted and yet to be submitted will not be considered until after the USDA issues their regulations in August.

Even after the USDA releases its regulations on hemp production, some complications remain.  The Food and Drug Administration (“FDA”) through the Federal Food, Drug,  and Cosmetic Act (“FD&C Act”) retains authority over the addition of CBD to food or supplements. The FDA maintains that it is “unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.”

All current CBD food or supplements have been made under the existing structure of the 2014 Farm Bill which allowed states to run pilot hemp programs. Because the addition to food and drugs remains subject to FDA authority, interested parties are urging the FDA, too, to release regulations.  Without further regulations by the FDA, a large part of the hemp market will be off limits to interstate sales.

While the 2018 Farm Bill was undeniably a win for tribes, there are lots of questions yet to be answered. The 2020 hemp grow season will likely inform and shape the way the industry moves in the decade to come.  Still, more guidance is needed from the government authorities responsible for regulation.   If a tribe is interested in growing, selling, or processing hemp, they should be aware of the legal complexities and uncertainties involved.

Corin La Pointe-Aitchison, Koyukon Athabaskan, is an Associate in the Seattle office.  His practice focuses on litigation involving tribal governments and enterprises, governmental counsel, and Indian civil rights.