Adding Cannabis Cultivation to Your Farm Could Impact Your USDA Loans and Payments

In light of California’s new recreational cannabis cultivation and sales allowances, some organic producers are considering adding cannabis cultivation to their operations. However, producers should be aware that USDA has a long-standing policy regarding cannabis production, which could impact grower’s eligibility for a range of USDA programs including Natural Resource Conservation Service (NRCS), Farm Service Agency (FSA), and crop insurance. 
 
USDA staff cannot provide technical assistance to cannabis producers and producers with conservation contracts with NRCS who are growing cannabis are in violation with their contracts.
 
In the recently released Cannabis Guidance for NRCS California Employees, NRCS notes that producers growing cannabis cannot receive technical assistance or participate in conservation programs regardless of state law or medical cannabis licenses. Additionally, NRCS employees are prohibited from working on land that is being used to grow cannabis.
 
All federal assistance to cannabis producers is prohibited due to cannabis’ federal status as a schedule-1 controlled substance. Therefore, regardless of state law, cannabis remains illegal under federal law for producers to grow, sell, or possess. NRCS notes that when a producer signs a conservation contract, they are expected to read and understand the contract language and are required to comply with federal law, including the prohibition of cannabis.
 
The guidance notes that producers with conservation program contracts that are growing cannabis should be made aware of the violation and that producers will be given the opportunity to come into compliance. Failure to comply will lead to termination of assistance. NRCS will not provide assistance to growers regardless of whether they have medical licenses to grow cannabis.
 
NRCS may provide technical and/or financial assistance to producers of industrial hemp who are in compliance with federal hemp regulations (Section 7606 of the Agricultural Act of 2014).  
 
For more information or clarifications regarding conservation program contracts, contact your local NRCS Service Center.
 

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