The new Industrial Hemp Law mandates that a person wanting to cultivate hemp, whether for fiber, CBD Oil or grain, certify and provide in writing to the Louisiana Department of Agriculture and Forestry [LDAF] in the initial hemp grower’s license application both the (i) legal description and (ii) GPS coordinates of the land on which he will grow hemp. In addition, a person must also certify in advance that the land on which he will cultivate hemp is controlled by him either by ownership or other means. All of these certifications must be repeated at each annual license renewal.

Advantages of Written Leases to Oral Leases

Evidence of ownership would be satisfied by providing copies of recorded deeds for sites owned outright by a grower. The hemp law recognizes evidence of control would also be satisfied by a lease to a grower from the landowner.

If it will be a hemp agricultural lease that will be presented to LDAF as evidence of control of the land to be planted in hemp, among other things the lease must contain a legal description and GPS coordinates of the leased land, and the degree of control a grower is granted in the lease by the landowner must be complete. The landowner should also be made aware of the broad rights over hemp fields growers must grant LDAF, such as the right of complete and unrestricted access to all hemp fields for inspection, testing and enforcement; the right to destroy any hemp plants found to be in violation or on land the legal description and GPS coordinates of which are not registered with LDAF; and more.

A person must have recorded deeds or written hemp agricultural leases already in place before he signs and files his grower application. A longstanding written agricultural lease one might intend to rely on as evidence of control of hemp fields should be checked for compliance with the hemp law well in advance to make certain that the term of the signed lease has not expired and that complete legal descriptions and GPS coordinates are in the lease document. If not, amended leases with the landowners would be necessary.

It would be prudent for even a person intending to grow hemp on land he owns outright by deed to form a limited liability company for the purpose of the LDAF grower license application in an effort to shield his personal assets from liability. The new company, as the holder of the grower license, would then engage in hemp cultivation pursuant to a written lease with the owner personally as the landlord, which would satisfy LDAF’s control requirement.

With careful advance planning and advice, a person will be able to make use of the methods the law allows both to insulate his personal assets from liability that might emanate from unintentional errant hemp cultivation activity, as well as reap the tax advantages that can be obtained with limited liability companies.

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Disclaimer: This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

Grower Control of Hemp Cultivation Sites through Ownership or Lease