December 28, 2006 in Business

Bert Caldwell: Industrial hemp backers try to clear the air

Bert Caldwell The Spokesman-Review

North Dakota farmers want to get into the hemp business. A few want it so badly they would be willing to ante up $202 in state licensing fees, and another $2,293 for a non-refundable U.S. Drug Enforcement Administration registration fee.

That assumes DEA will give them the time of day.

How North Dakota proceeds, and how federal authorities respond, will likely determine whether the United States again allows the cultivation of industrial hemp. Except for a brief experiment in Hawaii, the plant has not been grown in the country since 1957.

Interest in hemp has grown rapidly as consumers warm to the beneficial effects of hemp-based foods and oils. The newest thing is hemp milk, with brand names like Manitoba Harvest Hemp Bliss. Really.

Canadian farmers planted 50,000 acres of hemp this year. Half the harvest or its byproducts will be exported to the U.S. Hemp grosses farmers almost $40 per bushel.

Vote Hemp, an advocacy group that vigorously promotes restoration of industrial hemp as a cash crop, estimates U.S. consumers will purchase $300 million in hemp products this year. Sales have been increasing at an annual rate of 50 percent.

All the raw material is imported from Canada, Europe or China. For example, a Spokane company dba American Hemp is awaiting delivery of Hungarian-grown and manufactured twine and rope.

Clearly, there is a business opportunity here. But efforts by American farmers to plant hemp have been frustrated by an insistence that industrial hemp would be a stalking horse for marijuana. Both are hemp, but the industrial strain contains only trace amounts to tetrahydrocannabinol, or THC, which makes marijuana dope.

Seven states have approved hemp cultivation. Many more might follow if North Dakota clears all the administrative and legal hurdles. Idaho Rep. Tom Trail, R-Moscow, says he will resubmit a thrice-rejected bill allowing farmers to plant hemp if North Dakota succeeds. To the Eastern Idaho legislators who object, Trail notes that Brigham Young, patriarch of the early Mormon Church, directed Utah settlers to grow hemp.

“I think it’s a good crop,” Trail says.

Ken Junkert agrees. The plant industries program manager for the North Dakota Department of Agriculture says farmers would plant hemp as a cash crop, but also one that fits well into a rotation of legume and wheat crops. Hemp breaks the cycle of disease and pests.

Junkert says more than 75 farmers have shown interest in growing hemp, but that was before they became aware of the stiff DEA registration fee.

“That’s a deal-breaker,” he says, but then adds a few insist they will pay the fee just to keep the licensing process moving.

Junkert says North Dakota is asking DEA to waive the fee, or to allow the state to submit an umbrella application encompassing all licenses.

Either action is unlikely. DEA spokesman Garrison Courtneysays Congress requires the agency to set fees high enough to cover all the costs associated with processing registrations, which are usually submitted by companies or universities growing hemp, poppies or other crops for pharmaceutical or research purposes.

North Dakota’s farmers can start applying for licenses next week. Junkert says DEA will have the first state-approved licenses in hand sometime in February. He expects litigation if DEA rejects that paperwork, and Vote Hemp spokesman Adam Eidinger confirms the organization is prepared to weigh in.

“We don’t think DEA has the power to intervene,” Eidinger says, because federal law does not apply to the fiber or seed, which are the parts of the plant farmers want to harvest.

Finding seed could be a problem. Canadian farmers cannot keep seed for replanting the following year. Or for sale.

North Dakota may initially have to rely on seed collected from “ditchweed,” volunteer hemp that has continued to seed itself in the Midwest despite DEA efforts to uproot the plants. Vote Hemp says DEA has spent $175 million on that program since 1984.

Although Idaho has at least looked at legalization of industrial hemp, apparently there has been little if any interest in Washington. If North Dakota clears all the DEA hurdles, maybe that should change.

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