Puerto Rico Hemp Industry – Business Plan Templates

Puerto Rico’s tropical climate and around 2,800 hours of sunlight every year gives it the ability to grow and harvest hemp three times a year while most of the other major producers can only grow and harvest hemp outdoors once or twice a year.

Puerto Rico Hemp Industry Regulations

On December 28, 2018, the Department of Agriculture of Puerto Rico, via the Administrative Order 2018-29, created OLIC (Office for Licensing and Inspection of Hemp) to issue licenses and help the development of the hemp industry in Puerto Rico.

On February 12, 2019, the Governor of Puerto Rico signed Executive Order 2019-006, ordering “to create the committee to attend the development of hemp in accordance with” the Farm Bill 2018. In Puerto Rico, industrial hemp is legal if it contains less than 0.3% THC by weight which is consistent with the definition of hemp in the 2018 Farm Bill.

On July 1, 2019, as a result of the Administrative Order 2019-16, guidelines on “Licenses for Hemp Research Pilot Projects” were signed by the Secretary of Agriculture of Puerto Rico which outline the creation, implementation and oversight of the Hemp program in Puerto Rico.

On July 14, 2020, the USDA approved Puerto Rico’s hemp program.

Hemp Licenses Available in Puerto Rico

A range of licenses for growing, manufacturing, distribution and research of hemp are available.

Cultivation

Allows the possession, cultivation, sale and export of hemp in Puerto Rico. It also permits the sale and distribution of “viable hemp seeds for sowing” if it is in compliance with appropriate laws and regulations.

(application fee $50; license fee (in picture); license term 1 year)

Seed Distribution

Allows to import, distribute, sell and export “viable hemp seeds for sowing” in compliance with applicable laws and regulations.

(application fee $50; license fee $1,000; license term 1 year)

Manufacturing

Permits the purchasing, processing, creation, sale and importation of hemp-derived products into Puerto Rico and the exportation of those products out of Puerto Rico.

(application fee $50; license fee $3,000; license term 1 year)

Import and Distribution

A License for the Importation and Distribution of Hemp Products for Consumption permits the importation and distribution of hemp-derived products “for human or animal consumption” including those containing CBD in any form.

However, the following distributors do not require this license:

Manufacturing License holders.
Importers and distributors of hemp seeds for human and/or animal consumption.
Importers and distributors of hemp-derived products that are not for human or animal consumption.

(application fee $50; no license fee; license term 1 year)

Research

Allows to import seeds as well as grow, cultivate, store, process and investigate hemp or hemp-derived products in Puerto Rico.

(application fee $50; no license fee; license term 1 year)

Testing Lab

Allows a “private laboratory to receive samples of hemp vegetative material” and hemp-derived products for performing laboratory tests.

(application fee $50; license fee $3,000; license term 1 year)

Further information on each license can be found in the Puerto Rico Department of Agriculture Hemp Program. There is no cost for a renewal application for any of the licenses.

Each application and renewal application for any of these licenses must include:

Name of the individual applicant or the legal entity applying for the license. If the applicant is a legal entity, include also the full name of the authorized representative of the legal entity.
Photo ID of the applicant (if applicant is a legal entity, the photo ID of its authorized representative).
Copy of the Merchant Register issued by the Puerto Rico Treasury Department.
Negative Debt Certification issued by the Puerto Rico Treasury Department.
Fingerprint based Criminal Background Check of the Key Participant issued by the FBI.
Negative Certificate of Criminal Record issued by the state or territory where the Key Participant or the authorized representative resides.
If applicant is a legal entity:
- Certificate of Good Standing issued by the Puerto Rico State Department.
- Corporate Resolution or an applicable equivalent authorizing a representative to act on behalf of the legal entity.

Additional requirements for each application and renewal application for every specific license type as stated in the Hemp Program:

Cultivation Licenses

Documentary evidence of the legal possession of the site where hemp will be produced.
Diagram of the site where hemp will be produced in a digital format with coordinates or GPS location of the terrain structures.
A Bonafide Farmer Certificate issued by the DA Regional Director for the municipality where the site on which hemp will be produced is located or a certificate of completion received from 2019 onwards of:
- The course “Next Level” coordinated by the DA’s FIDA, or
- The Farm Administration Program offered by the Agricultural Extension Service of the University of Puerto Rico.

Seed Distribution Licenses

Documentary evidence of the legal possession of the site where hemp seeds will be stored.

Manufacturing Licenses

Documentary evidence of the legal possession of the site where hemp or hemp-derived products will be processed.
A diagram of the site where the hemp or hemp-derived products will be processed in a digital format with coordinates or GPS location of the terrain structures.

Import and Distribution Licenses

License for the Importation and Distribution of Hemp Products for Consumption:

Documentary evidence of the legal possession of the site where hemp-derived products will be stored.

Research Licenses

A Research Proposal including, at a minimum, purpose, research design and methods, research schedule, implications and contributions to knowledge.
A diagram in a digital form of the site where the hemp or hemp-derived products will be produced and processed if required, along with coordinates or GPS location of the site.

Testing Lab Licenses

Must be registered with the DEA and accredited in compliance with state and federal laws and regulations.
Must comply with the requirements described in the USDA-AMS interim final rules at 7 CFR Part 990, available here.
Documentary evidence of the legal possession of the site where the laboratory is located.

Each of these licenses can be renewed 30 days before their expiration.

Puerto Rico Hemp Market

The Puerto Rican government provides incentives to hemp farmers including:

Renting of government-owned land and manufacture facilities
Tax exemptions
Tax credits
Funding for research projects
Investments protected by the US law

By March 1, 2020, 65 cultivation licenses and 13 manufacturing licenses were issued by OLIC under the Hemp Research Pilot Projects program. As of April 2021, OLIC has granted 94 cultivation licenses, 21 manufacturing licenses, 50 import and export licenses for consumption, 10 research licenses, 2 seed distributor licenses and 2 laboratory licenses.

Initially, only around 41 acres of hemp were grown in Puerto Rico. By April 2021, this increased to nearly 78 acres.

According to OLIC’s director, around 4,800 to 9,700 acres of hemp can be harvested in Puerto Rico which would generate approximately $200 million annually.

Puerto Rico Hemp Industry Infographics

Hemp Cultivation Business Plan Template Sample, Puerto Rico

Puerto Rico Hemp Industry

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