Chatham Hemp Firm Filing Suit Against U.S.

  Chatham Hemp Firm Filing Suit Against U.S.

Posted by CN Staff on August 01, 2002 at 10:38:21 PT
By The Canadian Press 
Source: London Free Press  

America's war on drugs has turned into a trade battle between the U.S. government and a small Canadian company. Industrial hemp-growing company Kenex Ltd., will take on the U.S. State Department tomorrow when it files a lawsuit under the North American Free Trade Agreement. The company, based in Chatham, is seeking at least $20 million US compensation because it says the U.S. Drug Enforcement Administration's attempt to ban hemp-seed foods is financially devastating. 
"Kenex's business was going to be built around and focused on its access to the U.S. market," says the company's lawyer, Todd Weiler. "They were ready to go to town and they have this come down on them . . . . It's not just that they were exporting into the U.S., they had plans to do a heck of a lot more, and that got stymied." The company, which employs about 10 people, has grown and processed hemp oil, seed and fibre products since 1998 -- when the Canadian government lifted a ban on hemp farming dating back to 1938. Kenex is now North America's largest producer of hemp seed, with three-quarters of its business going to the United States where it's illegal to grow and process hemp. "The U.S. government has such an absurd practice of harassing and seizing shipments that it's put a real chill in the market," says David Bronner, president of Dr. Bronner's Magic Soap, which makes soap containing hemp oil, and chairperson of the Hemp Industry Association's food and oils committee. "Customers need on-time delivery and they can't be worried about holdups, let alone seizures . . . we want the marketplace to be more free so we don't have to worry about DEA harassment." Legal counsel for Kenex met with Washington officials in March in an attempt to prevent a drawn-out trade dispute, but after the officials failed to recognize the legality of Kenex's products, the company moved to seek compensation under Chapter 11 of NAFTA, which allows investors to sue governments. "They haven't played by the rules. And it's crippled our investment . . . we're done if this stands," Kenex president Jean Laprise said in January when the company filed its notice of intent to sue. Spokespeople for the DEA and the State Department refused to comment on the impending case until they reviewed the notice of arbitration. Kenex is the fifth Canadian company to face the U.S. government in arbitration at a NAFTA tribunal. A three-member panel will listen to arguments and issue a decision -- a process that can take two years. Even though hemp seed and oil is highly nutritious -- packed with Vitamin E and essential fatty acids -- and is used in everything from bread to ice cream, the DEA wants it banned. While marijuana has long been considered a controlled substance, industrial hemp products, such as fibres and textiles, are exempt from control under U.S. legislation. However, the 1970 Controlled Substances Act still lists THC as a controlled substance, giving the DEA grounds for its "zero THC policy" in products for human consumption. The ruckus, which prompted Kenex to sue, started when a shipment of its sterilized hemp seed was confiscated at the border in 1999. After a four-month legal battle, Customs allowed the shipment to cross, but by that time the seed had spoiled and the company had lost major customers. Kenex argued the DEA's actions violated the 1970 Controlled Substances Act, which exempts sterilized hemp seed and oil from control. And six months after the seizure, the U.S. Department of Justice said the DEA lacked the authority to confiscate the goods. In October 2001, the DEA issued a ban on food products made with hemp seed and oil, giving manufacturers and retailers until February 2002 to pull products from the shelves. That would have dealt a blow to the $5-million hemp food industry, but a counter-attack launched by the Hemp Industry Association blocked the move in a ninth Circuit Court of Appeals, where a decision is still pending. Kenex is a co-plaintiff in that case. Note: Kenex Ltd. has had its exports seized by the U.S. Drug Enforcement Administration.Newshawk: puff_tuffSource: London Free Press (CN ON)Published: Thursday, August 1, 2002 Copyright: 2002 The London Free Press Contact: letters lfpress.comWebsite: Articles & Web Sites:Kenex Links Challenge to DEA Hemp Rule Drug Czar's View of Edible Hemp of Hemp Foods Gear Up for Fight

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Comment #8 posted by overtoke on August 01, 2002 at 17:45:51 PT:
US Companies Suing Canada
This has happened many times before.An American company will sue the Canadian government for certain laws it has that hurt the company's 'business.'
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Comment #7 posted by VitaminT on August 01, 2002 at 15:04:49 PT
If Kenex wins $20 mil,
I just think there would be a parade of others getting in line to collect on similar claims. Something would have to give, DEA has had it all their way for a long time - I agree - but if they lost several such cases the congressional sleazebags that control our tax money will not be amused, mainly because taxpayers like me would not let them hear the end of it.Now that you mention it, $20 million is a pitifully small ammount. They should have projected their losses over a longer period of time, kick that number up by a factor of 10 or so. $20 million is barely a shot across the bow.
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Comment #6 posted by schmeff on August 01, 2002 at 14:50:36 PT
No Higher Authority
I don't have much hope for a Cannabian victory. The US of DEA follows no one's rules but their own.Will the US pay a $20 million verdict, or simply say, "screw you"?
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Comment #5 posted by Critto on August 01, 2002 at 14:44:49 PT:
It's like Southpark !!!
Well, do y'all remember 'kill Canada before they kill US' ?? I think that DEA is acting such way. I cross my fingers for KENEX, and their pursuit for FREE TRADE.LIBERTY FOREVER !!!
Critto, libertarian
LIBERTARYZM - LIBERTARIANISM - libertarian portal of Critto
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Comment #4 posted by p4me on August 01, 2002 at 12:48:51 PT
Protect us, teach us your chants
Forget Iraq, Mr. Dipshit President, and protect us from Canadian hempseed oil. It is of the greatest national security. Hempseed oil is the gateway drug, to real gruel and hemp cereal and who Knows what else those Canadians will want to addict us to. We have the best fast food chains in the world and we do not need Canadian hemp in American stomachs. It has got to be dangerous or these foods would not be a Schedule 1 Narcotic. Please realize the proper priorities and forget Iraq and concentrate on the hemp invasion from Canada, you f'ing dickhead.1,2
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Comment #3 posted by VitaminT on August 01, 2002 at 12:08:23 PT
NAFTA's Chapter 11
is a dangerous thing. It's an opportunity for corporations to take an end run around not just the laws of a country but the very sovreignty of the country as well.Bill Moyers did a PBS special on the topic and it is freightening. If I can dig out the link I'll post it.All of that said, before we finally do away with Chapter 11, I'd like to see KENEX use it to kick the shit out of the DEA. It would not surprise me to see KENEX win this, much stranger things have happened w/ Chapter 11.
Global Exchange - NAFTA Ch. 11 story
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Comment #2 posted by Ethan Russo MD on August 01, 2002 at 11:40:25 PT:
Petty and Ridiculous
It is this type of petty and ridiculous over-reaching by DEA that will, in the end, convince more and more of the populace that prohibition of the hemp seeds is for the birds. 
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Comment #1 posted by kaptinemo on August 01, 2002 at 11:23:18 PT:
I knew this was coming...
And the antis will really scream, now. Because international trade is at stake. The big shot money men who rammed NAFTA down the throats of the North American worker will now realize it's not a one-way street. Kenex has the DEA dead to rights. And the DEA is not impervious to pressure from those same money men who drooled over themselves when NAFTA was passed.Yessir, American business...which thinks it's employees are fungibles like beans and toilet paper and that it has a right to monitor what you put in your has to let something through that forces acceptance of hemp oil in your diet. And will throw their anal retentive desires for control onto the grill for a proper barbacueing. I love it...
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