Irrigation Leader
Interview,  Water Law

The Use of Federal Water for Growing Hemp An Interview With Reclamation's Steve Davies

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lthough the Agricultural Act of 2014 includes provisions for the growth of industrial hemp for research purposes under state-approved programs, the use of federal water had been in question given hemp’s classification under the Controlled Substances Act. However, in late May 2018, the Bureau of Reclamation’s Montana Area Office issued the first permit for the use of federal water from a reservoir operated by Reclamation to irrigate industrial hemp. Only one permit has been issued so far; however, this action could allow for the crop’s growth in popularity throughout the West.

In an interview with Tyler Young, writer for Irrigation Leader magazine, Montana Area Office Manager Steve Davies speaks about the recently issued permit. Mr. Davies elaborates on the process Reclamation took to issue the permit, how interested applicants should approach the application process, and his perspective on the future of hemp production in Montana.

Tyler Young: Please tell our readers about the approved request to use federal water for the growth of industrial hemp.

Steve Davies: In June 2017, we received a request for a water service contract from an individual who was leasing agricultural lands adjacent to the Helena Valley Irrigation District near Reclamation’s Canyon Ferry Reservoir for the purpose of growing industrial hemp. The lands being leased in this situation were not actually within the district’s boarders, but were adjacent to the district’s canal. The request came to Reclamation because we have the authority of market water from the Canyon Ferry Reservoir, so the individual asked for a water service contract for federal water to grow the industrial hemp.

Unfortunately, the grower had already planted the crop in 2017 prior to contacting Reclamation for the water service contract. This was the first formal request that Reclamation had received for that purpose. We have policy that requires upholding the Controlled Substance Act of 1970, which specifically included hemp as a prohibited crop. Although the 2014 Farm Bill contained provisions that allowed for exemptions to the Controlled Substance Act, we were unable to get to a decision on whether we could lawfully provide water for this purpose before the crop dried up several weeks later. About 69 acres of crop was lost.

In 2018, this same grower submitted another request for a water service contract prior to planting the industrial hemp crop. This new request included comprehensive documentation about how the grower’s plan to grow hemp fit the narrow exemptions of the Farm Bill Act. Reclamation was in a much better position of making sure we could legally provide the water based on this additional documentation. In particular, we were able to confirm that this plan had the involvement of the state Department of Agriculture and an institution of higher learning (university) and that the cultivated crop was for research purposes under an established agricultural pilot program. Each of the required provisions identified in the Farm Bill were met, and we were assured that we could legally provide the water and not get caught between the Controlled Substance Act and the Farm Bill Act. A water service contract was subsequently issued in May 2018 prior to the grower planting the crop. We really have to give this individual credit for doing the legwork necessary to demonstrate how she legally fit this program.

Looking at the overall timeline for dealing with this situation, it was really important for Reclamation to get this decision right. We did not want to issue a water service contract for this crop and find ourselves in the position later of having to back out. This request was just in Montana, but Reclamation operates in the 17 western states. The cultivation of hemp and marijuana has gained popularity as several states, such as in California, Colorado, and Oregon, have legalized marijuana, so we must pay attention to the particular uses that growers want federal water for.

Tyler Young: Could you describe Reclamation’s official stance on the growth of hemp?

Steve Davies: We have policy that prohibits the use of federal water for the growth of hemp, as defined under the Controlled Substance Act. That said, we recognize the fairly narrow provisions of the 2014 Farm Bill Act for growing industrial hemp under an authorized pilot program and how federal water can be used in cases that fit these specific provisions. We are currently getting other inquiries about raising hemp, because farmers are finding a market for the product. Going forward, and until Congress provides additional language on the 2014 Farm Bill Act provisions, we will review such requests on a case-by-case basis to make sure these provisions are met.

Tyler Young: What is the step-by-step process for those who want to pursue growing hemp in Montana?

Steve Davies: I think first and foremost, they need to be registered and licensed under the state of Montana’s established pilot program. For growers in Montana, they really need to be affiliated with the state Department of Agriculture to grow industrial hemp under that pilot program. It fits exactly the provisions of the 2014 Farm Bill Act. Second, they should identify their water source, especially if they expect to need federal water.

Tyler Young: What does the hemp industry look like in Montana?

Steve Davies: I think there is a stronger interest today. The United States imports millions of dollars of hemp from countries such as Canada and China. We are in very close proximity to Canada; this crop is being grown right across the border. A lot of products that can be derived from hemp, and certainly that is driving the interest for farmers today.

Different types of crops are constantly being explored and grown, and when you cross the border into Canada, it is even more so. The state of Montana’s pilot program has at least a few dozen growers, and the particular grower that I talked about earlier who is now getting Reclamation water is the smallest of all those growers, so there is a strong interest. We are trying to understand the market more, but we have to be mindful of some of the other things that are going on in the United States in terms of legalizing marijuana, for which the Controlled Substance Act and Reclamation policy strictly prohibit the use of federal water. We rely on Congress to pass laws and provide clarification on how they apply to the use of federal water in this industry.

Tyler Young: How is this situation changing your day-to-day role?

Steve Davies: Reclamation is a very traditional organization that provides water to users for a wide variety of agricultural crops in Montana. The list is growing, constrained only by what farmers can successfully grow and find a market for. We are a large marketer of water in the United States, and to some extent in Montana. Irrigation districts and water users are becoming more and more creative in how they apply water and their growing patterns, so everything is constantly evolving, and we try to keep up with that. I think the number of applications for water to grow hemp will only increase in the future. Interest is growing, not just on the part of growers, but also on the part of Congress, which wants flexibility for users to grow what they need to grow to be able to survive and compete in the agricultural industry.

Steve Davies is the Area Manager for the Bureau of Reclamation's Montana Area Office. He can be reached at sdavies@usbr.gov