Congress

South Dakota tribe clears hemp plan but governor opposes industry

South Dakota is one of three states that don’t allow production of industrial hemp

Hemp flower on display at the Tennessee Grown booth at the Southern Hemp Expo in Franklin, Tenn., in September 2019. (Bill Clark/CQ Roll Call file photo)

The Flandreau Santee Sioux cleared a major hurdle when the Agriculture Department approved its plan for growing industrial hemp on reservation land, but the tribe may face other obstacles in a state where laws still prohibit hemp farming.

Gov. Kristi Noem, a former Republican House member, vetoed legislation in 2019 that would have amended state law to allow South Dakota farmers to grow hemp after Congress legalized the plant and its products in the 2018 farm bill. Federal law had previously treated hemp, like its botanical cousin marijuana, as an illegal substance although hemp has a lower concentration of the psychoactive compound delta-9-tetrahydrocannabinol, or THC.

South Dakota, Idaho and Mississippi are the only three states that don’t allow the production of industrial hemp.

The 2018 farm bill made hemp a legal substance and legitimate crop at the federal level and at the state and tribal level if those governments have approved hemp farming.

Noem vowed in late 2019 to kill any future hemp legalization bills in her state. The governor says hemp and marijuana are so similar in appearance that it is difficult for law enforcement to tell them apart, which could hamper enforcement of pot infractions.

[USDA’s hemp rules open door to states to set up regulations]

But the governor’s veto authority couldn’t stop the Flandreau Santee Sioux tribal government from OK'ing hemp production on reservation land and winning federal approval for its plan to regulate all the steps necessary for growing, harvesting, processing and distributing hemp products in accordance with interim USDA rules issued to implement the farm bill’s directive on hemp production.

The federal law says tribal and state governments can regulate hemp farming if they submit plans that pass USDA review. The law also empowers the department to license hemp growers in states and tribal lands if they don't submit plans but allow hemp production. The USDA can develop plans for states and tribes whose proposals have been rejected or their approvals revoked.

On Dec. 27, the department’s Agricultural Marketing Service announced the South Dakota tribe was among the first round of tribal and state governments approved to move ahead to a 2020 hemp season under a USDA interim final rule required by the 2018 farm bill.

Two California tribes, the Santa Rosa Cahuilla and La Jolla Band of Luiseno Indians, also had their plans approved. Those tribes will launch hemp production in a state that updated its laws to comply with the 2018 farm bill. The changes took effect Jan. 1.

Patricia Marks, a lawyer who has worked with the Flandreau Santee Sioux on hemp issues, said the tribe sees hemp farming as an economic development opportunity that could stall without cooperation from the state.

In the plan submitted to the USDA, the South Dakota tribe says creating a hemp industry “will allow the Tribe to exercise its inherent sovereignty over its Tribal territory, exercise its inherent right to stimulate its economy, create jobs, develop and operate Tribal businesses, create an additional source of revenue for Tribal programs and operations and provide funding for its members and the community.”

Marks, of Fredericks Peebles & Patterson LLP in Washington, said this week that despite farm bill language, questions remain on whether law enforcement agencies could stop and confiscate imported seeds bought this spring or hemp samples trucked later in the year to labs for mandatory testing of the THC content.

“Who’s responsible if the tribe can’t ship that hemp?” Marks said.

Noem has said the state will abide by farm bill language and an opinion by the USDA general counsel that states and tribal governments can't impede the interstate transport of hemp crops and products.

But Marks said the South Dakota attorney general has not issued guidance for law enforcement agencies to follow.

Tim Bormann, chief of staff to South Dakota Attorney General Jason Ravnsborg, told CQ Roll Call that the holidays had slowed efforts to map out guidance on hemp for the South Dakota Sheriffs Association and the state highway patrol.

“At this point in time, it is being examined. It’s something we know we have to get into,” Bormann said, noting at least two other South Dakota tribes are seeking USDA approval for hemp plans.

Marks said resolution of the transportation issue is needed soon.

“We are most hopeful we don’t end up in court. Only time will tell,” she said.

Get breaking news alerts and more from Roll Call on your iPhone.