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Hemp Production Contract Checklist

Developed by:

Ryan Smith, Research Associate, University of Maryland;
Paul Goeringer, Extension Specialist, University of Maryland; and
Eliza Thomas, Research Associate, University of Maryland
 
Image of hemp plants by Jessica Hyde.jpg

Image of hemp plants by Jessica Hyde

Hemp production in the United States is developing slowly. Though statutory regulations have finally been approved (see USDA–Agricultural Marketing Service’s Hemp Production page), the industry is still in its infancy. It makes the fair-market value and general practices challenging to discern.

According to USDA guidelines, hemp refers to “cannabis varieties and any part of the plant, whether growing or not, containing a [THC] concentration of no more than [0.03%] on a dry weight basis,” and industrial hemp is defined as “hemp.” These definitions define the commodity product but do not differentiate the final market product.

Hemp produces various products, including CBD extracts, food-grade oil and seed, and fiber-used textiles, paper, and building materials. Though all hemp products must meet regulatory THC standards, the growth practices for each hemp product vary considerably.

 The USDA has provided guidelines for producers interested in hemp production to assist grower compliance. The U.S. Hemp Guidance Program details responsibilities and procedures for growers and processors. Guidelines focus on sampling, testing, personnel, security, storage, distribution, and records retention.

This project aims to provide growers guidance when entering a contract for hemp production. The Hemp Production Contract Checklist briefly discusses pre-contract considerations specific to hemp and then provides a detailed contract consideration checklist. While not every item within the list applies, reviewing each item may give a grower a moment of pause to consider their interests and whether those interests are worthy of contractual protection.

The Hemp Production Contract Checklist is modeled after a “Grain Production Contract Checklist” developed by the Iowa Attorney General in 1996.

Click below to download the publication as a pdf

This is material is based upon work supported by USDA/NIFA under Award Number 2018-70027-28588.
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