Over the last few years, Canadian hemp producers have steadily grown their sector, working to convince consumers of the health benefits of hemp foods. A new ruling by the Drug Enforcement Administration threatens to nip a burgeoning industry in the bud – as just-food.com#;s Clare Harman reports.
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When Canada lifted its 60-year ban on commercial hemp cultivation in March 1998, Health Minister Allan Rock ushered in a new era in which farmers licensed by Health Canada could sow the seeds of a crop with “tremendous potential for creating new jobs in agriculture, industry, research and retail”.
The industry did indeed flourish, and its burgeoning edible product portfolio spread through health shops and mainstream retailers. Canadian consumers found a vast range of hemp-enhanced goods, including ice cream, nutrition bars, salad oil, waffles and beer; while, through exports, producers challenged the dominance of Europe and China as a source for the crop in an international arena.
Three years on, however, and Canadian hemp growers are facing their biggest challenge yet, for federal food officials in the neighbouring US, where growing the crop has been illegal since the 1930s, have taken a radically differing stance on the issue. From Wednesday, Canadian hemp producers will find themselves up against foreign regulations that could undermine their business
Hemp equals hash?
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By GlobalData
As far as the US Drug Enforcement Administration (DEA) is concerned, because hemp and marijuana come from the same plant, they deserve the same legal status. The sticking point is over the psychoactive substance delta-9 tetrahydrocannabinol (THC), and more specifically the potential levels of THC in readily available hemp-based foodstuffs. THC gives marijuana its high, but hemp contains only trace amounts, usually less than 0.3%; users of hemp#;s criminalised cousin want at least 6% THC content. Concerned that unwittingly consuming THC in hemp foods could cause socially responsible employees to fail workplace drug-testing programmes, however, the DEA has ordered any food containing even trace elements of THC off store shelves by 6 February.
As explained in the DEA#;s “interpretive rule”, issued on 9 October last year, “any product containing any amount of THC is a ‘controlled substance#;,” and therefore has the same legal status as LSD, for example. The onus is now on the industry to prove that its products are free from THC.
Food manufacturers insist that if it is present, the minute amounts of THC are nowhere near the levels found in marijuana and offer no potential for abuse. Found in the flowers of female hemp plants (hemp foods use the stems and seeds of the plant), most THC is washed away during processing, but removing trace amounts of THC from hemp products is impossible. Furthermore, the DEA’s rules do not actually specify a detection protocol by which to establish the levels of THC in hemp, and thus they put hemp foods’ future in a largely ambiguous position.
The government, claim producers, should simply adjust its drug testing program to accept trace levels of THC in hemp just as it accepts trace levels of opium in poppy seeds. This regulation, they add, undoes more than 60 years of government policy that sought to distinguish industrial hemp from marijuana.
Huge market for alternative foods
In its defence, hemp is promoted as the latest nutritional wonder: rich in protein, vitamin E and two essential fatty acids. This explains its often high profile on foods hoping to boost their nutritional profile. It is also a relatively environmentally friendly crop, requiring few or no chemical pesticides. Moreover, it is easily cultivated. It is also a profitable crop, arguably a socially responsible alternative for tobacco farmers and able to produce high-return products such as cosmetics and plastics.
In relative terms, the market for food products containing hemp is still small, accounting for only about C$5m (US$3.1m) in sales annually, but it has doubled in size every year for the past five years and its potential is huge. Hemp producers often point to the current sales scope for soy foods, considered a fringe food only a few years ago but racking up sales of more than US$3.3bn in 2001 (according to the Maine consulting firm Soyatech).
The difficulty for Canadian hemp farmers, as with farmers of other crops, is that export markets are essential. Brian Wilson, Manitoba Agriculture and Food‘s crop diversification manager told mapinc.org: “We depend, in agriculture, very much on export markets – we don’t have a large population base in Canada. If the US does something to restrict our access to the market it disrupts our economy very, very much.”
Within the DEA#;s jurisdiction?
Little wonder, then, that the hemp industry has locked horns with the DEA over its order, which some claim is not even within its appropriate jurisdiction.
Lobby group Vote Hemp, which organised a nationwide day of action against what it terms the “absurd and destructive” rule on 4 December last year, obtained documents from the Internal Department of Justice (DOJ) through the Freedom of Information Act, which it claims prove that the DEA was instructed by the DOJ, its effective boss, not to restrict the sale of hemp seed and oil, as far back as March 2000.
A memo from John Roth, Chief of the Narcotic and Dangerous Drug Section of the DOJ, to DEA administrator Donnie Marshall reads: “Hemp products intended for human consumption have THC at levels too low to trigger a psychoactive effect and are not purchased, sold or marketed with the intent of having a psychoactive effect.” The ruling then, argues Vote Hemp, is a “blatant violation of the original Congressional intent that exempted hemp seed and oil from DEA’s control”.
The Hemp Industries Association (HIA), which represents over 250 product manufacturers and Canadian exporters of hemp seed, has asked the US 9th Circuit Court of Appeals to issue a stay pending a ruling on its petition to overturn the DEA’s order. Patrick Goggin, the HIA#;s attorney, insisted: “The Roth memo shows the DEA knows hemp seed and oil is harmless, but they are acting to the contrary.”
Last week it emerged that the DEA has hired North Virginia-based consulting firm IFC Consulting to investigate the size and scope of the hemp foods market. David Bronner, Chairman of the HIA’s Food and Oil Committee bemoaned the time it had taken to actually investigate the subject of its controversial regulations: “It is very disappointing that the DEA waited this long to research the rapidly expanding hemp foods industry that is creating jobs and promoting highly nutritious foods for healthier lifestyles.
“This is the latest evidence that the DEA’s interpretation of the Controlled Substances Act (CSA) is purely a political decision […which] purposely ignores the relevant science and law which exempts non-viable hemp seed and oil from DEA’s control.”
Compensation claims
Spearheading the movement to counter the DEA ruling is privately owned Kenex Ltd, Canada’s largest hemp processor and its largest exporter of hemp seed to the US. Based in Chatham, Ontario, Kenex has revealed plans to seek compensation for the DEA#;s action of at least C$20m under the North America Free Trade Agreement (NAFTA). This figure was calculated on the back of investments made by Kemex, which was set up specifically for research, production and processing of industrial hemp, present sales levels and future anticipated losses.
“We too are party to several court filings against the DEA and their ridiculous interim rules banning any product which contains any level of THC including hemp foods.” Shaun Crew, President of Manitoba-based Hemp Oil Canada Inc, told just-food.com, explaining however that “our claim at this stage does not specify a damage amount – only that our business is being damaged by their action”.
“We are very much in the trenches with the rest of the Canadian (and US) hemp industries fighting this battle with the DEA,” Crew added: “We are seeing very strong lobbies on both sides of the border fighting these rules which could effectively ban hemp foods.”
Crew, who sells around 80% of his crop south of the Canadian border, knows first-hand the difficulties Canadian hemp shipments can meet at the US border; largely as a result of US customs officials being unsure as to hemp#;s narcotic status.
Consumer confusion
For Kenex, Hemp Oil Canada and other companies, however, the worry is not only the effective end of the US export market – but also that if the DEA regulations gather momentum among a broader audience, they could undo many years#; work in convincing consumers around the world that hemp is a food for the socially responsible. It is far harder to market and sell a product in the mainstream when consumers are confused as to whether it#;s even legal or not.
Greg Herriott, president of Hempola Inc, explained that while his products would circumvent the ruling by carrying a label showing that third party laboratories, working under stringent Health Canada Regulations, discovered ‘NO DETECTABLE THC#;; US consumers might be too scared to buy them.
“Unfortunately what we’re seeing,” he explained, “is a definite decline in our US sales. People in the US are afraid to eat Hempola food […] because they fear they’re potentially breaking the law.
“It extends all the way down the distribution chain – consumers are afraid to eat, retailers are afraid to stock their shelves and distributors will not warehouse products which will not sell.”
Light at the end of the tunnel?
For the time being, however, hemp producers may be cheered by the emergence of several high-profile drug-reform advocates such as American actor Woody Harrelson. By adding popular voices to the campaign to legalise hemp in the US, they are at least going some way in dragging the well-used image of hemp lovers as zealots, who stand in the way of the US#; War On Drugs, into the mainstream.
Also, while the lawmakers debate the fine print of THC testing, the official Health Canada detection protocol considers the majority of hemp seed and oil on the US market as having undetectable THC. “You see it is not enough for [the DEA] to suggest zero [THC] without establishing the scientific methodology to confirm its presence,” explained Crew, “the DEA will have to either adopt or develop a THC testing protocol and establish a detection limit to use in analysis.
“I suspect the DEA will ultimately drop the issue, because it will force them to recognise the industrial hemp variety of cannabis sativa over marijuana.”
Banking on this, presumably, many retailers intend to continue selling hemp food products after 6 February and so for producers the immediate future, at least, promises “business as usual”.
By Clare Harman, just-food.com editorial team
