Ohio’s Hemp Industry: Five Things to Know

Despite the Buckeye State’s late start in the hemp industry, Ohio has quickly turned into a national trendsetter, becoming one of the first states to obtain USDA approval of its hemp program. With the Ohio Department of Agriculture expected to finalize its administrative rules in a matter of days, Ohioans could find themselves with the ability to be among the first to be licensed to produce hemp and hemp-derived products in 2020.

So, with that in mind, here’s what you need to know:

1. License applications should arrive soon. One of the final steps in approving Ohio’s hemp rules occurs on Thursday, January 16 when the hemp rules are before the Joint Committee on Agency Rule Review (JCARR). Assuming there are no snags, Ohio regulators anticipate that license applications for Ohio hemp cultivators and processors will be live at the end of January or early February. Regulators are moving quickly to ensure that licenses are issued in advance of the 2020 growing season.
2. Ohio tests for Total THC Content. Similar to the USDA’s Interim Final Rule, Ohio will be utilizing a “Total THC” testing requirement to determine compliance with SB 57. That means that the sum of delta-9 THC and 87.7% of THCA must be below 0.3%. (Delta-9 THC + 87.7% THCA = Total THC). Farmers in many states that have been cultivating hemp under the 2014 Farm Bill have run into problems when attempting to meet this threshold.
3. Hemp crops must be tested within 15 days prior to harvest. Again, following the USDA’s lead, Ohio will require hemp cultivators to have their crops tested within 15 days of harvest. Under the Ohio Department of Agriculture’s proposed rules, hemp plant material testing can be done only by the Department, unless it contracts with third parties to provide those services.
4. Hemp processor applications are a bit more robust for companies extracting cannabinoids in Ohio. Hemp processor license applications will be designed to be simpler than Ohio’s medical marijuana applications. But applicants seeking to extract CBD and other cannabinoids from hemp in Ohio will have to meet requirements that some do not. For example, those companies will have to provide an additional operational plan at the time of application and will also need to post a surety bond of either $10,000 or $20,000, depending on the prior year’s revenue.
5. There are restrictions on where you can locate your hemp business. R.C. 928.03(T) requires the Department to establish a setback distance from pre-existing medical marijuana cultivators. In its proposed rules, the Department established a setback of one-half mile between medical marijuana and hemp cultivators. In addition, hemp cultivators and processors cannot be located within five hundred feet of a school or public park, unless prior approval of the Department is obtained.

There are many more regulatory and practical issues to consider when operating a hemp business. If you have questions or would like to learn more about Ohio’s hemp industry, please do not hesitate to contact Tom Haren and the other Frantz Ward cannabis attorneys.