Month: October 2015

Our cannabis business lawyers are seeing a big uptick in both new clients interested in hemp and existing cannabis clients interested in hemp. This growing interest stems at least in part from hemp having so many uses, including for food, beauty products, textiles, and even construction (hempcrete).

Both hemp and marijuana are derived from the cannabis sativa plant, but they have very different characteristics. For years, marijuana has been bred for its mind-altering effects, which come from the Tetrahydrocannabinol (THC) in the plant. Marijuana is usually cultivated to produce the maximum amount of female flowering plants, which contain the highest concentration of THC. Hemp is usually not bred for THC and it typically contains only trace amounts of that cannabinoid. Hemp plants are primarily male and a do not produce flowers. Because hemp doesn’t produce flowers, hemp cultivators are unconcerned with factors that impact flower growth and, therefore, hemp is more commonly grown outdoors.

Despite the substantial differences between hemp and marijuana, the legal status of the two are intertwined. Under the federal Controlled Substances Act, marijuana does not include hemp or seeds “incapable of germination.” In Hemp Indus. Ass’n v. DEA, the Ninth Circuit held that the DEA cannot regulate all hemp products that also contain trace amounts of THC because Congress did not regulate non-psychoactive hemp when drafting the Controlled Substances Act. As a result of this ruling, manufacturing, distributing, and possessing hemp is not federally illegal, unlike with cannabis. However, growing hemp is prohibited without a permit from the DEA because at some point in the life cycle of the cannabis sativa plant the plant will inevitably produce marijuana, in addition to hemp. And no big surprise here, but the DEA rarely issues hemp cultivation permits and that has severely stunted hemp cultivation in the U.S.

The 2014 federal Farm Bill created more opportunities for hemp cultivation by allowing for industrial hemp cultivation without a permit from the DEA if done by a state Department of Agriculture, or by a college or a university for academic or agricultural research purposes in a state that maintains its own hemp regulation. Some states have taken advantage of the federal legislation and for more information on that, check out the following:

• Kentucky: The Unlikely Leader of Industrial Hemp
• What’s Up with Hemp in Washington?
• Oregon Hemp: Onward!
• California Hemp: Don’t Start Your Engines Quite Yet

So, how can a U.S. company create hemp products without growing hemp itself or having any domestic hemp resources? It can import hemp under the importation laws and rules promulgated by the United States Department of Agriculture and by United States Customs and Border Protection. According to a recent Congressional Report on hemp, China supplies the most raw and processed hemp to the United States, followed by Romania, Hungary, and India. Canada is the single largest source of hemp seed and oilcake imports.

Though importing hemp is legal, it still presents significant risks because U.S. Customs and Border Protection is always looking out for anything containing THC, even trace amounts, and for anything with any type of cannabis logo or packaging. In fact, in response to the question, “[c]an I import hemp products into the United States?,” U.S. Customs responded as follows:

Hemp products such as cosmetics, clothing, food, etc. may be imported into the United States if they do not contain tetrahydrocannabinols (THC). Hemp Seeds: Imports of hemp seeds must be sterilized. Non-sterilized hemp seeds remain a schedule one controlled substance and therefore may only be imported into the U.S. with a Drug Enforcement Agency (DEA) Permit Form 35. All Other Hemp Products: If the product contains tetrahydrocannabinols (THC) and causes THC to enter the human body, it is an illegal substance and may not be imported into the U.S

U.S. Importers have to heavily rely on their exporters to ensure the hemp materials or seeds being imported to the U.S. contain no THC at all and that any seeds are not capable of germination. Ultimately, if the exporter makes a mistake with its hemp imports, the U.S. importer pays the price, both civilly and criminally.

In my next hemp post, I’ll talk about how businesses legally process hemp across the country.