This article is authored by Garrett Graff with contributions from our law clerk, Haley Keefer.
As hemp continues to grow as a global commodity, the international shipment of hemp follows. Unfortunately, US-based cannabusinesses have encountered obstacles when shipping hemp and finished products containing hemp internationally. At this time, there is limited federal guidance from the USDA or Customs and Border Protection (“CBP”), leaving cannabusinesses in a risky and uncertain position when shipping these products.
Importing hemp materials and finished products containing hemp
The import process begins with identifying the goods in the shipment. This first step can be difficult for importers because particular hemp products do not clearly fit into a tariff code category. More so, this is problematic because the tariff code guides the import process.
Some products, such as hemp seeds and plants, have received some import and export guidelines. Shipments must be accompanied by a phytosanitary certification, as well as other forms depending on the export country. When shipping guidelines are provided, adherence to the procedures will assist in the entry and exit process. But other shipment types, such as finished products containing hemp-derived cannabinoids, have created headaches for importers because there is no comparable process for these goods, yet.
Beyond identification troubles, importers have encountered additional obstacles.
It is a particular concern that the shipment may be seized for CBP inspection upon arrival. It is CBP’s task to ensure safety of all imports. This includes verifying that the shipment is actually hemp and not illegal marijuana. Unfortunately, there is no uniform testing method for ports of entry to test the shipment. Instead, CBP conducts a patchwork of field tests to determine if the shipment is hemp. This process may require CBP to hold the shipment for an extended period of time to conduct the inspection, creating a risk for deterioration.
Particular forms of hemp trigger CBP speculation more than others. Clone shipments, for example, have caused import confusion. At the early stages of development, it is nearly impossible to differentiate between hemp and marijuana clones because there is no way to measure THC levels. This leaves the shipment at the mercy of CBP.
Further, all imports must comply with the applicable governing federal regulations. This is most common when shipping finished products, specifically goods that fall under the Federal Food, Drug and Cosmetic Act. It is important for importers to consider the product’s compliance prior to import because if the finished goods do not meet FDA standards, the shipment will be denied, and potentially re-exported.
Exporting hemp materials and finished products containing hemp.
For the most part, export obstacles depend on the importing country. This is because CBP is more concerned with shipments entering the US, rather than shipments exiting. But, that is not to say CBP does not monitor exports. Traditionally, hemp exports required an exporter license because hemp was a controlled substance prior to the 2018 Farm Bill. However, depending on the circumstances of the transaction, shipments may require an export license.
What can cannabusinesses do now to help facilitate shipment?
Unfortunately, the USDA’s proposed rules for the Domestic Hemp Production Program does not address import and export concerns. However, in the meantime, there are proactive steps cannabusinesses can take to assist in the process, such as packaging and documentation.
Importantly, specific shipment types require particular attention. We encourage cannabusinesses to contact Hoban Law Group to discuss the unique needs of your shipment and to help facilitate the process.