ISDA and industry outline Idaho hemp program, cite strict THC limits, high fees and need for processing capacity

The Idaho State Department of Agriculture and hemp industry representatives told the House Agriculture Affairs Committee that Idaho’s hemp program, established under House Bill 126 (2021) and aligned with the federal 2018 Farm Bill for on-farm production, is operating under standards that are stricter than the federal baseline, and that the emerging industry still faces regulatory and economic hurdles.

Chanel Tewalt, director of the Idaho State Department of Agriculture (ISDA), told the committee the 2018 Farm Bill authorized industrial hemp production and left many product- and processing-related issues to states and other federal agencies. She said Idaho’s program requires on-farm THC to remain at or below 0.3% (Idaho’s standard), compared with a 1% threshold in the federal Farm Bill for state programs: “Idaho is much more stringent than the federal standard.” Tewalt also said products leaving processors must test at 0% THC under Idaho practice, a standard she characterized as the strictest in the country, and that these rules create a “bright line” for law enforcement and market differentiation for licensed producers.

Why it matters: Producers and processors said state rules and program fees affect market viability. Industry speakers told lawmakers the state’s strict on-farm and post-processing THC policy, the high cost of licensing and testing, and limited in-state processing capacity create risks for growers and limit the state’s ability to scale a fiber-and-grain hemp economy.

Key regulatory and program points discussed - Legal framework: Tewalt said House Bill 126 implemented a state plan tied to the 2018 Farm Bill, requiring ISDA to write a USDA-acceptable state hemp plan, administrative rules, and protocols for sampling, testing, remediation and disposal. She noted the state plan and protocols require stakeholder and executive review before USDA approval. -THC thresholds: Under Idaho policy described in the hearing, plants testing above 0.3% THC are subject to negligent violations; ISDA described the federal allowance of up to 1% before a violation as more permissive than Idaho’s standard. -Fees and program cost: Tewalt described the hemp program as expensive to administer because of frequent inspections, a relatively small number of licensees and USDA-aligned requirements. She said fees were set in rule and judged high at negotiated rulemaking but compared them favorably to some other states’ fees. - Licensing and USDA requirements: ISDA enforces farm-bill-derived license requirements (including background checks, age criteria and Farm Service Agency interactions). Tewalt said ISDA, not USDA, collects background checks and enforces eligibility in Idaho. -Remediation and testing: The ISDA protocols require on-farm sampling and testing and allow remediation techniques that must be performed on the property; remediation may save a crop from destruction but still count as a negligent violation. Tewalt said remediation options exist but warned there is a limited number of non-negligent violations allowed before a grower can be barred.

Industry perspectives and capacity - Tristan Sponseller, owner of Idaho Hemp Processing and Idaho Premium Hay Farms (Rexburg area), described large-scale industrial hemp fiber production in Idaho and said roughly 90% of the 1,800 acres grown in 2024 (a figure cited in committee) were fiber acreage processed for his facility. He described agronomic benefits (rotational benefits, lower water use in parts of the state, nematode reduction for potato rotations) and operational frictions (Dec. 31 application deadline; lot-fee structure that divides fields by small features such as ditches).

- Sponseller described remediation and testing challenges for fiber growers. He said genetics and environmental stress (heat, water stress) change THC levels and that a certified low-THC seed sometimes produced a 0.7% result in his fields; remediation by removing and disposing of the flower tops or by “redding” during drying has in his experience worked to bring lots back under the 0.3% threshold, but growers still receive a negligent violation.

- Matthew Mead, founder of Hempitecture (Jerome), described conversion of Idaho fiber into insulation and composite products. Mead said Hempitecture purchased nearly 1,000,000 pounds of hemp fiber in 2024, about 42% sourced from Idaho, and that production at his Jerome plant rose from about 1,940 pallets in 2023 to 2,582 pallets in 2024. He said Hempitecture employs 10 full-time workers at the Jerome plant and plans to expand. Mead emphasized the difference between fiber/grain hemp and CBD varieties and urged policy and remediation rules that reflect those distinctions.

- Product performance and market: Mead provided performance details for Hempitecture products: an R-value for bat insulation at about R-3.69 per inch and board insulation at about R-3.25 per inch; he said the company’s products currently cost roughly 10–20% more than mineral fiber and 30–40% more than fiberglass but have a path to parity as scale increases.

- Farmers and processors: Producers described on-the-ground experience. Travis McAfee, a small producer in the Howe area, described planting tiny seed that produced stalks up to 14–16 feet and explained harvest and drying practices, bale weights and payments “by the pound.” McAfee said hemp worked as a rotation crop in areas with limited irrigation and noted local community reaction and law enforcement awareness in small towns.

- Tim Korney, owner of Thousand Springs Mill, described hemp grain as a high-protein food ingredient and discussed dual-purpose varieties (grain and fiber) and early production experiments.

Research, funding and next steps - Mead said the Idaho Global Entrepreneurial Mission (iGEM) support for hemp-related research was cut in late summer 2024, which interrupted work by University of Idaho PhD students and left some projects unfinished. He urged continued research funding and said processors such as Tristan Sponseller are critical infrastructure for the nascent Idaho fiber economy.

- Industry and ISDA speakers urged rule clarity and potential alignment with evolving USDA guidance. Speakers repeatedly asked for recognition that fiber/grain hemp is agronomically and economically different from CBD production and said remediation and enforcement should reflect those differences.

What the committee heard but did not decide - No vote or statutory change was taken at the hearing. The transcript records an informational presentation and Q&A; committee members asked about interstate commerce rules, remediation methods, the legal basis for sampling and remediation protocols (Tewalt said protocols are in rule), and whether THC thresholds should be adjusted to follow USDA guidance.

Excerpts of testimony - ISDA Director Chanel Tewalt: “Idaho is much more stringent than the federal standard…Under the Farm Bill structure a state with an approved hemp program can go up to 1% THC before a violation is issued. That's not the case in Idaho. 0.3 is the standard in Idaho.” - Processor Tristan Sponseller: “To my knowledge, none of the crops have ever surpassed the 1%. The USDA guideline is that a strike against you is only constituted if you reach the 1% or over.” - Manufacturer Matthew Mead: “Hempitecture purchased and converted nearly a million pounds of hemp fiber [in 2024]. In 2024, about 42% of that was grown in Idaho.”

Next steps and follow-up opportunities mentioned by witnesses included possible legislative adjustments to remediation thresholds, scheduling of follow-up hearings for rule-making or statutory change, and discussion with JFAC members about research funding restoration.