Hemp Trade Nipped in The Bud 

Hemp Trade Nipped in The Bud 
Posted by CN Staff on August 25, 2002 at 07:38:31 PT
By David Armstrong, Chronicle Staff Writer
Source: San Francisco Chronicle 
America's war on drugs is roiling the small but growing industrial hemp business, throwing the industry's customers into doubt and confusion. It is also causing something of an international flap. Caught in the middle is John Roulac, a Sebastopol businessman, who says he has found himself enmeshed in a Kafkaesque tale of circular logic and rigid, incomprehensible bureaucracy.
Roulac, who owns and operates a company that imports industrial-grade hemp seeds and hemp oil, was trying to bring a shipment of hemp seeds south across the Canadian border in February. His plan was to mix the seed in chips and candy bars that his company, Nutiva Inc., sells to the health-food supermarket chains Whole Foods and Wild Oats, among others. But it just wasn't that easy, as Roulac found out when he became an unwilling combatant in the drug war. "I had to make something like 50 phone calls over three days," recalls Roulac, who finally convinced U.S. Customs officials that the seeds, which contain faint trace amounts of THC, the psychoactive chemical in marijuana, couldn't possibly get anyone high, and are a legal product. Besides, the seeds are sterilized. After three days of wrangling, Customs cleared the shipment, citing a recent ruling by the Ninth Circuit Court of Appeals in San Francisco. Finally, the shelled hemp seeds, grown legally in Canada and shipped by Kenex Ltd. of Chatham, Ont., were on their way to Sebastopol. Industrial hemp is a variety of Cannabis sativa, the plant that also produces marijuana. But industrial hemp comes chiefly from the plant's stalk and seeds and is not used to get high. Smokable, mind-expanding weed comes from leaves and buds of different strains of Cannabis sativa. During the past few years, hemp has become a popular ingredient in a wide range of products, from bath oils and skin-care products to woven clothing to muffins, cakes, candy bars and chips. All told, hemp is a $200 million-per- year business in the United States, up from $75 million in 1997, according to the Hemp Industry Association. However, the industry is growing in fits and starts, and the regulatory constraints on even seemingly innocuous hemp products have made producers and importers hopping mad. So far this year, the hemp industry has filed two lawsuits to loosen regulatory bonds. In February, the Hemp Industry Association, with Kenex as co-plaintiff, won a stay of a Drug Enforcement Administration edict that banned edible hemp products that contain THC. The Ninth Circuit Court of Appeals in San Francisco issued the stay, and is expected to issue a final ruling by early next year. SUIT AGAINST U.S. GOVERNMENT Separately, Kenex, which saw a shipment of its sterilized hemp seed held at the U.S. border for four months in late 1999 and early 2000, filed its own lawsuit on Aug. 2 against the U.S. government, charging restraint of trade in violation of Chapter 11 of the North American Free Trade Agreement. The suit has gone to a NAFTA panel for arbitration, only the sixth time a case against the United States has reached arbitration since NAFTA went into effect in 1994. Kenex is asking for $20 million in compensation for lost business. As a private entity, the Canadian company cannot under NAFTA rules overturn DEA policy. (However, under NAFTA's Chapter 20, a lawsuit by a foreign government, rather than a corporation, could do that.) A big cash award would be a setback for the U.S. government's antidrug policy and could perhaps stimulate growth in the cross-border hemp trade. And that's exactly what hemp entrepreneurs such as Roulac would like to see happen. Roulac says that the government's aggressive, "zero-tolerance" antidrug policies are stifling legitimate trade that has nothing to do with the multibillion commerce in illicit drugs. "It's a constant minefield," he said. "The government throws up roadblocks to this business. They hassle us at the border. When you're a small company, you need to move your product fast." GEORGE WASHINGTON GREW HEMP Although it is controversial now, industrial hemp has deep roots in American history and commerce. George Washington grew hemp at Mount Vernon, his home in Virginia, to make rope, and the plant was a valuable agricultural crop until the antidrug fervor of the 1930s; marijuana was outlawed in 1937. It is illegal to grow hemp in the United States, although cultivating the plant as a nondrug, agricultural crop is legal in many countries, including Canada, Britain and China. Hence, American purveyors of industrial hemp must import all of their supply. Most imported hemp comes from Canada, which legalized nondrug cultivation of Cannabis sativa in 1998 and limits the THC content to 0.3 percent. Because the trade is new, neither the Canadian nor U.S. governments have records of the monetary value of imported Canadian hemp, according to the Hemp Industry Association, a trade organization based in Occidental (Sonoma County). Under current law, "Some industrial forms of hemp are permitted in this country," said Will Glaspy, a spokesman for the DEA. "It can be imported to make rope, clothing, bath oil, any product that's not edible." But the DEA maintains that edible products containing THC are strictly forbidden under the Controlled Substances Act of 1970. Hemp seeds and hemp oil contain less than 1 percent THC, compared with 5 to 15 percent THC in marijuana. HEMP SEED NOT NARCOTIC  A consumer would bust a gut and die from the sheer quantity before getting high from gorging on hemp seed with trace amounts of THC, said David Bronner, principal of Dr. Bronner's Magic Soaps, based in Escondido (San Diego County), which uses hemp oil in skin lotions and bath oils. But zero tolerance means zero tolerance, according to the DEA's Glaspy, who says "THC is a controlled substance." Glaspy said Congress would have to amend the Controlled Substances Act before the antidrug agency could approve edible hemp products containing any THC whatsoever. That's a problem for the industrial hemp business, which considers edible hemp products to be a prime growth area, in part because of hemp's alleged health benefits. Hemp includes useful amounts of essential fatty oils and vitamin E, according to the hemp trade organization. But those benefits won't flow to consumers unless hemp, especially edible products made with seeds and oil, are declared legal once and for all, say industrial hemp advocates. Unless that happens, there will be more legal wrangling and more lost business, they say. ENTREPRENEUR THWARTED  Kenex had been telling investors it expected most of its future business to be in the United States, whose economy is 10 times the size of Canada's, according to lawyer Todd Weiler, who is representing the Canadian company. Weiler, a professor of international law at Canada's University of Windsor, said border delays and adverse publicity have scared investors and reduced the number of outlets willing to stock industrial hemp products. "If you are, say, Whole Foods, are you really going to stock this stuff, when you have so many choices?" Weiler asked. A State Department spokesman declined to comment on Kenex's lawsuit, which will be heard by a three-person NAFTA tribunal in Washington. The hemp hassle is the latest trade dispute between Canada and the United States, which have tangled in recent months over imported Canadian softwood that Washington said is subsidized by Canadian provinces, to the detriment of American lumber producers. EDIBLE PRODUCTS LOSING SALES All this wrangling is taking a toll on the nascent American hemp business. Roulac said he has lost sales for Nutiva products from supermarkets that are uncertain about the products' legality. Roulac didn't provide dollar amounts for any lost sales. Ordinarily, he said, Nutiva does about $35,000 per month in sales. Herb Leigh, manager of the Whole Foods store in San Francisco, said he sold off all the store's edible hemp products after Roulac's February run-in at the border, but has not stocked any more, pending clarification on their legal status. Leigh said the hemp products were marginal performers in San Francisco but sold well in some other locations for Whole Foods, based in Austin, Texas, which operates 130 stores across the nation. None of the Whole Foods stores will order more edible hemp products pending government certification of their legality, said Jolyn Warford, a Whole Foods marketing executive in Emeryville. But while the industrial-hemp industry is under fire from antidrug authorities, it has attracted allies in business and politics. The Body Shop, the British cosmetics and accessories company known for its embrace of environmentalism, showcases a hemp product line including products with hemp oil for soothing dry skin. The state's hemp industry got a boost last week, when Assemblywoman Virginia Strom-Martin, D-Duncans Mills, introduced a bill that would direct the University of California to conduct an economic feasibility study of alternative fibrous crops, including kenaf and industrial hemp. "This is a new opportunity to revitalize our agriculture industry by studying developing markets for industrial hemp," said Strom-Martin in a statement about her bill, AB388. "There are many California manufacturers that use hemp in their products, but they must import all the hemp they use. That results in money leaving the state, and possibly the country, for a product that can and should be grown in California." Such developments stoke the fires of hope for Roulac, who has written three books on the use of legal hemp products, and believes hemp has the potential to rival soybeans as a cash crop. "I would love to buy hemp from California farmers," he said,. "That way, I wouldn't have to ship it all the way across Canada. Why can't we grow a crop that's in practically every industrialized country except America?" Note: U.S. agencies are putting a lid on products from versatile plant. Snipped:  Complete Article: San Francisco Chronicle (CA)Author: David Armstrong, Chronicle Staff WriterPublished: Sunday, August 25, 2002 Copyright: San Francisco Chronicle -  Page G - 1  Contact: letters sfchronicle.comWebsite: Article & Web Site:Hemp Links Would Start State Study of Hemp Sends Governor Hemp Study Bill Hemp Archives
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Comment #5 posted by p4me on August 25, 2002 at 21:19:00 PT
It is treason for reasons- oil,timber,cotton
Normally I would let my mistakes move down the scroll, but I messed up what was a pretty good title.And the 1% number is not in the snipped portion. The snipped portion is not worth copying except for a third grade class interest in uses of hemp.1,2 
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Comment #4 posted by p4me on August 25, 2002 at 21:13:09 PT
It is treason with with reason- oil, timber,cotton
Hemp seeds and hemp oil contain less than 1 percent THC, compared with 5 to 15 percent THC in marijuana.This appears in the snipped part of the article. The Canadian standard on hemp seeds is not 1%. It is 1% of 1% or one part in 10,000. Anything else edible is no more than 5 parts per 10,000. Look, any article that does not come out and say that the US policy toward hempfoods is stupid misses the the boat. On the stupidity scale it is between 9 and 10. Tell us some fine points so that people can adjust their new settings of hempfood stupidity with relevant information and perspective.I won't give an explaination, by my stupidity gauge of the DEAth ban on hempfoods is set at 99. But here is a clue from the article: Why can't we grow a crop that's in practically every industrialized country except America?"1,2
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Comment #3 posted by karkulus on August 25, 2002 at 17:23:42 PT
Found those Brain-cells...
or,that's what you CALL a comprehensive article!
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Comment #2 posted by mayan on August 25, 2002 at 15:54:11 PT
Once More...
Everyone has probably seen this the first ninety times I posted it, but once more couldn't hurt!SHADOW OF THE SWASTIKA:The Real Reason the Government Won't Debate Medical Cannabis and Industrial Hemp Re-legalization:
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Comment #1 posted by karkulus on August 25, 2002 at 12:56:24 PT
 I think that's what you comprehensive article.
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