But that business plan is now in jeopardy as the Department of Agriculture (USDA) has informed growers in several states that their federal license to grow hemp is subject to cancellation if the farmers continue to cultivate both hemp and marijuana. “It’s another attack on the little guy,” said Connor Reeves, a cannabis attorney with the firm McLaughlin PC in Jackson, Mississippi. “They don’t seem to care how it impacts small farmers and folks in rural parts of the country that are otherwise following the law.

” The USDA approves all state hemp programs as required by the 2018 Farm Bill. The agency also directly regulates hemp growers in eight states, including Mississippi, that do not have their own regulatory program. Seven of those states have also legalized medical or recreational cannabis.  Eric Sorenson, a hemp farmer in Mississippi, explored cultivating medical marijuana after it was legalized in the state last year. But his plans were thwarted by the USDA, which informed him that he would lose his license to grow hemp if also grew medicinal weed.

“While Medical Cannabis is not federally legal, we will not be able to allow you to maintain your current hemp license in addition to the medical cannabis cultivator license,” the USDA wrote to Sorenson in an email obtained by Politico. “It doesn’t make any sense,” said Sorenson, who also founded the Mississippi Industrial Hemp Association. “It’s the same plant.” The USDA declined to comment on the decision to rescind or deny specific hemp licenses. But Allan Rodriguez, a spokesperson for the agency, said that the issue is complicated because of the varying legality of marijuana at the state and federal levels.

“While the 2018 Farm Bill legalized hemp production, marijuana remains a Schedule I controlled substance under federal law,” Rodriguez said in a statement. “This presents a unique jurisdictional and regulatory landscape that producers of more traditional agricultural commodities do not have to navigate.” Rodriguez added that USDA remains “committed” to helping farmers learn about hemp-related rules and connecting farmers with research, risk management and conservation tools. USDA also said that the department oversees “all states and growers in the [hemp] program in the same way,” although at least some states that regulate hemp directly have issued both hemp and marijuana cultivation licenses to some growers.

Farmers in Vermont, where the USDA oversees hemp agriculture, have also been told by the agency that they cannot grow both hemp and marijuana. Sam Bellavance, a Vermont cannabis farmer, had separate licenses to grow both marijuana and hemp before the USDA revoked the hemp license earlier this year. He expects his operation to miss out on about $250,000 in revenue because of the loss of the hemp license. “It was definitely a huge blow to our business,” said Bellavance. But other Vermont farmers are still growing both hemp and marijuana.

Vermont Cannabis Control Board Compliance Director Cary Giguere said that his agency is aware of some growers who are still cultivating both crops. Hemp industry officials say that the inconsistency in regulation has led some retailers to shy away from carrying hemp products. That hesitancy has in part led to a decline in hemp prices that has caused many growers to give up or scale back their hemp operations. In 2019, farmers planted 275,000 acres of hemp, but that fell to just 21,000 acres last year, according to data from Hemp Benchmarks.

Industry insiders say that the USDA’s decision to rescind hemp licenses is causing further turmoil in the regulated hemp industry. “It’s just another example of the absurdity of keeping a substance, for which now 55 percent of Americans live in a jurisdiction where it’s legal, federally illegal,” said Tim Bryon Fair, founder of the Vermont Cannabis Solutions law practice. “It’s insane.” Sherry Boodram, the CEO and co-founder of cannabis consulting firm CannDelta Inc., told High Times that the problem of farmers losing their hemp licenses illustrates the problems caused by the continued prohibition of marijuana at the federal level.

“The disconnect between US federal and state laws pertaining to cannabis will continue to create unfair barriers for industry participants until cannabis becomes federally legal. This is an example of the unexpected hurdles the industry is continuing to be faced with,” Boodram writes in an email. “The fact that the U.S. Department of Agriculture is revoking hemp licenses for farmers who were given the choice to grow cannabis in states where it’s legal, is in my opinion, as ridiculous as legally being able to sell hemp-derived THC (such as delta 8).

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