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Hemp is a variety of Cannabis sativa and is of the same plant species as marijuana. Although industrial hemp is genetically different and distinguished by its use and chemical makeup, and has long been cultivated for non-drug use in the production of industrial and other goods, in the United States, hemp is subject to U.S. drug laws and growing industrial hemp is restricted. Under current U.S. drug policy all cannabis varieties, including industrial hemp, are considered Schedule I controlled substances under the Controlled Substances Act (CSA, 21 U.S.C. §§801 et et seq.; Title 21 C.F.R. Part 1308.11). Despite these legitimate industrial uses, hemp production and usage are controlled and regulated by the U.S. Drug Enforcement Administration (DEA). Strictly speaking, the CSA does not make growing hemp illegal; rather, it places strict controls on its production and enforces standards governing the security conditions under which the crop must be grown, making it illegal to grow without a DEA permit. In other words, a grower needs to get permission from the DEA to grow hemp or faces the possibility of federal charges or property confiscation, regardless of whether the grower has a state-issued permit. Currently, cannabis varieties may be legitimately grown for research purposes only. No known active federal licenses allow for hemp cultivation at this time. There is no large-scale commercial hemp production in the United States, and the U.S. market is largely dependent on imports, both as finished hempcontaininghemp-containing products and as ingredients for use in further processing. More than 30 nations grow industrial hemp as an agricultural commodity, which is sold on the world market. In the early 1990s a sustained resurgence of interest in allowing commercial cultivation of industrial hemp began in the United States. Several states have conducted economic or market studies, and have initiated or passed legislation to expand state-level resources and production. The 113th The 113th Congress made significant changes to U.S. policies regarding industrial hemp during the omnibus farm bill debate. The Agricultural Act of 2014 (“"farm bill,” " P.L. 113-79; 7 U.S.C. 5940) provided that certain research institutions and state departments of agriculture may grow industrial hemp, as part of an agricultural pilot program, if allowed under state laws where the institution or state department of agriculture is located. The farm bill also established a statutory definition of “ "industrial hemp”" as the plant Cannabis sativa L. and any part of such plant with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3% on a dry weight basis. The enacted FY2015 appropriations (P.L. 113-235) further blocked FY2016 omnibus appropriations act (P.L. 114-113) blocks federal law enforcement authorities from interfering with state agencies, hemp growers, and agricultural research. The (§543) and also blocks USDA from prohibiting the transportation, processing, sale, or use of industrial hemp that is grown or cultivated (§763) in accordance with the 2014 farm bill provision. As introduced in the 114th Congress, the Industrial Hemp Farming Act of 2015 (H.R. 525; ; S. 134) would amend the CSA to specify that the term “marijuana”"marijuana" does not include industrial hemp, thus excluding hemp from the CSA as a controlled substance subject to DEA regulation. This bill was reintroduced from bills introduced in previous Congresses dating back to the 109th Congress. The Charlotte’s Web Medical Hemp Act of 2014 (H.R. 5226, 113th Congress) would have excluded hemp and also cannabidiol from the definition of marijuana, making them not subject to CSA and DEA regulation. Congressional Research Service Hemp as an Agricultural Commodity Contents Introduction...................................................................................................................................... 1 Overview of Cannabis Varieties ...................................................................................................... 1 Comparison of Hemp and Marijuana ........................................................................................ 1 Production Differences .............................................................................................................. 2 Hemp ................................................................................................................................... 3 Marijuana ............................................................................................................................ 4 Hemp Production and Use ............................................................................................................... 4 Commercial Uses of Hemp ....................................................................................................... 4 Estimated Retail Market ............................................................................................................ 6 U.S. Hemp Imports .................................................................................................................... 7 U.S. Market Potential ................................................................................................................ 7 Global Production ............................................................................................................................ 9 International Production ............................................................................................................ 9 Historical U.S. Production ....................................................................................................... 11 Legal Status in the United States ................................................................................................... 13 Federal Drug Law .................................................................................................................... 13 Controlled Substances Act of 1970 ................................................................................... 13 DEA Permit Requirements ................................................................................................ 13 DEA’s 2003 Rules Regarding Hemp ................................................................................. 15 Dispute over Hemp Food Imports (1999-2004) ................................................................ 15 Other DEA Policy Statements ........................................................................................... 16 2013 DEA Guidance Outlined in “Cole Memo” ............................................................... 17 DEA’s Blocking of Imported Viable Hemp Seeds ............................................................ 18 Farm Bill and Other Federal Actions....................................................................................... 19 2014 Farm Bill .................................................................................................................. 19 FY2015 Commerce-Justice-Science (C-J-S) Appropriations............................................ 20 Other Federal Actions Involving USDA ........................................................................... 20 State Laws ............................................................................................................................... 21 Ongoing Legislative Activity ......................................................................................................... 24 Industrial Hemp Farming Act .................................................................................................. 24 Charlotte’s Web Medical Hemp Act ........................................................................................ 24 Groups Supporting/Opposing Further Legislation .................................................................. 25 Concluding Remarks ..................................................................................................................... 27 Figures Figure 1. Trait Variation in Cannabis Phenotype ............................................................................. 3 Figure 2. Flowchart of Potential Hemp Products............................................................................. 5 Figure 3. Hemp Fiber and Seed, Global Production (1999-2011) ................................................. 10 Figure 4. Canadian Hemp Acreage, 1998-2011 ............................................................................. 12 Congressional Research Service Hemp as an Agricultural Commodity Tables Table 1. Value and Quantity of U.S. Imports of Selected Hemp Products, Selected Years, 1996-2013 ..................................................................................................................................... 8 Appendixes Appendix. Listing of Selected Hemp Studies ................................................................................ 28 Contacts Author Contact Information........................................................................................................... 29 Congressional Research Service Hemp as an Agricultural Commodity Introduction in previous Congresses dating back to the 109th Congress. In addition, bills have been introduced in both the House (H.R. 1635) and the Senate (S. 1333) that would amend the CSA "to exclude cannabidiol and cannabidiol-rich plants from the definition of marihuana" intended to promote the possible medical applications of hemp.
For centuries, industrial hemp (plant species Cannabis sativa) has been a source of fiber and oilseed used worldwide to produce a variety of industrial and consumer products. Currently, more than 30 nations grow industrial hemp as an agricultural commodity, which is sold on the world market. In the United States, however, production is strictly controlled under existing drug enforcement laws. Currently there is no large-scale commercial production in the United States , and the U.S. market depends on imports. The 113th The 113th Congress made significant changes to U.S. policies regarding industrial hemp during the omnibus farm bill debate. The Agricultural Act of 2014 (P.L. 113-79; 7 U.S.C. 5940) provided that certain research institutions and state departments of agriculture may grow industrial hemp, as part of an agricultural pilot program, if allowed under state laws where the institution or state department of agriculture is located. The FY2015 appropriations (P.L. 113-235) further blocked federal law enacted FY2016 omnibus appropriations blocks federal law enforcement authorities from interfering with state agencies, hemp growers, and agricultural research. The 114th Congress has re-introduced (P.L. 114-113, §543) and also blocks the U.S. Department of Agriculture (USDA) from prohibiting the transportation, processing, sale, or use of industrial hemp that is grown or cultivated (P.L. 114-113, §763) in accordance with the 2014 farm bill provision. The 114th Congress has reintroduced the Industrial Hemp Farming Act of 2015 (H.R. 525 and S. 134S. 134), which would exclude industrial hemp from being regulated as a controlled substance and subject to certain federal law enforcement authorities. Overview of Cannabis Varieties In addition, bills have been introduced in both the House (H.R. 1635) and the Senate (S. 1333) that would amend the Controlled Substances Act (CSA) "to exclude cannabidiol and cannabidiol-rich plants from the definition of marihuana" and are intended to promote the possible medical applications of hemp. Overview of Cannabis Varieties Although marijuana is also a variety of cannabis, , it is genetically distinct from industrial hemp and is further distinguished by its use and chemical makeup. In this report, “hemp”"hemp" refers to industrial hemp, “marijuana” (or “marihuana”"marijuana" (or "marihuana" as it is spelled in the older statutes) refers to the psychotropic drug (whether used for medicinal or recreational purposes), and “cannabis”"cannabis" refers to the plant species that has industrial, medicinal, and recreational varieties.1 1 Comparison of Hemp and Marijuana There are many different varieties of cannabis plants. Marijuana and hemp come from the same species of plant, Cannabis sativa, but from different varieties or cultivars. However, hemp is genetically different and is distinguished by its use and chemical makeup, as well as by differing cultivation practices in its production.2 2 Hemp, also called “"industrial hemp,”3"3 refers to cannabis varieties that are primarily grown as an agricultural crop (such as seeds and fiber, and by-products such as oil, seed cake, hurds) and is 1 This report does not cover issues pertaining to medical or recreational marijuana. For other information, see CRS Report R43034, State Legalization of Recreational Marijuana: Selected Legal Issues and CRS Report R43435, Marijuana: Medical and Retail—Selected Legal Issues, among other related CRS reports. 2 See, for example, S. L. Datwyler and G. D. Weiblen, “Genetic variation in hemp and marijuana (Cannabis sativa L.) according to amplified fragment length polymorphisms,” Journal of Forensic Sciences, Vol. 51, No. 2 (2006). 3 Use of this term dates back to the 1960s; see L. Grlic, “A combined spectrophotometric differentiation of samples of cannabis,” United Nations Office on Drugs and Crime (UNODC), January 1968, http://www.unodc.org/unodc. Congressional Research Service 1 Hemp as an Agricultural Commodity characterized by plants that are low in THC (delta-9 tetrahydrocannabinol, marijuana’'s primary psychoactive chemical). THC levels for hemp are generally less than 1%. Marijuana refers to the flowering tops and leaves of psychoactive cannabis varieties, which are grown for their high content of THC. Marijuana’'s high THC content is primarily in the flowering tops and to a lesser extent in the leaves. THC levels for marijuana are much higher than for hemp, and are reported to average about 10%; some sample tests indicate THC levels reaching 20%-30%, or greater.4 4 A level of about 1% THC is considered the threshold for cannabis to have a psychotropic effect or an intoxicating potential.55 Current laws regulating hemp cultivation in the European Union (EU) and Canada use 0.3% THC as the dividing line between industrial and potentially drug-producing cannabis. Cultivars having less than 0.3% THC can be cultivated under license, while cultivars having more than that amount are considered to have too high a drug potential.6 6 Some also claim that industrial hemp has higher levels of cannabidiol (CBD), the nonpsychoactivenon-psychoactive part of marijuana, which might mitigate some of the effects of THC.77 A high ratio of CBD to THC might also classify hemp as a fiber-type plant rather than a drug-type plant. Opinions remain mixed about how CBD levels might influence the psychoactive effects of THC. Production Differences Production Differences Production differences depend on whether the cannabis plant is grown for fiber/oilseed or for medicinal/recreational uses. These differences involve the varieties being grown, the methods used to grow them, and the timing of their harvest (see discussion in “Hemp” and “Marijuana,” "Hemp" and "Marijuana," below). Concerns about cross-pollination among the different varieties are critical. All cannabis plants are open, wind, and/or insect pollinated, and thus cross-pollination is possible. Because of the compositional differences between the drug and fiber varieties of cannabis, farmers growing either crop would necessarily want to separate production of the different varieties or cultivars. This is particularly true for growers of medicinal or recreational marijuana in an effort to avoid cross-pollination with industrial hemp, which would significantly lower the THC content and thus degrade the value of the marijuana crop. Likewise, growers of industrial hemp would seek to avoid cross-pollination with marijuana plants, especially given the illegal 4 National Institute of Drug Abuse, “Quarterly Report, Potency Monitoring Project,” Report 100, University of Mississippi, 2008. Based on sample tests of illegal cannabis seizures (December 16, 2007, through March 15, 2008). 5 E. Small and D. Marcus, “Hemp: A New Crop with New Uses for North America,” in Trends in New Crops and New Uses, ed. J. Janick and A. Whipkey (American Society for Horticultural Science [ASHS] Press, 2002). 6 E. Small and D. Marcus, “Tetrahydrocannabinol levels in hemp (Cannabis sativa) germplasm resources,” Economic Botany, vol. 57, no. 4 (October 2003); and G. Leson, “Evaluating Interference of THC Levels in Hemp Food Products with Employee Drug Testing” (prepared for the Province of Manitoba, Canada), July, 2000. 7 U. R. Avico, R. Pacifici, and P. Zuccaro, “Variations of tetrahydrocannabinol content in cannabis plants to distinguish the fibre-type from drug-type plants,” UNODC Bulletin on Narcotics, January 1985; C. W. Waller, “Chemistry Of Marihuana,” Pharmacological Reviews, vol. 23 (December 1971); K. W. Hillig and P. G. Mahlberg, “A chemotaxonomic analysis of cannabinoid variation in Cannabis (Cannabaceae),” American Journal of Botany, vol. 91, no. 6 (June 2004); and A. W. Zuardi et al., “Cannabidiol, a Cannabis sativa constituent, as an antipsychotic drug,” Brazilian Journal of Medical and Biological Research, vol. 39 (2006). Congressional Research Service 2 Hemp as an Agricultural Commodity hemp would seek to avoid cross-pollination with marijuana plants, especially given the illegal status of marijuana. Plants grown offor oilseed are also marketed according to the purity of the product, and the mixing of off-type genotypes would degrade the value of the crop.8 8 The different cannabis varieties are also harvested at different times (depending on the growing area), increasing the chance of detection of illegal marijuana, if production is commingled. Because of these differences, many claim that drug varieties of cannabis cannot easily be grown with oilseed or fiber varieties without being easily detected.99 As discussed below (and illustrated in Figure 1), among the visual plant differences are plant height (hemp is encouraged to grow tall, whereas marijuana is selected to grow short and tightly clustered); cultivationcultivation (hemp is grown as a single main stalk with few leaves and branches, whereas marijuana is encouraged to become bushy with many leaves and branches to promote flowers and buds); and planting densityplanting density (hemp is densely planted to discourage branching and flowering, whereas marijuana plants are well-spaced). Figure 1.
Figure 1. Trait Variation in Cannabis Phenotype (marijuana and industrial hemp) Source: George Weiblen, University of Minnesota, presentation at the 2013 Annual HIA Conference, Washington, DC, November 17, 2013. Notes: Photographs contrasting marijuana and industrial hemp are available at Vote Hemp’'s website (“Different "Different Varieties of Cannibis,” Cannabis," http://www.votehemp.com/different_varieties.html). Hemp ). Hemp To maximize production of hemp fiber and/or seed, plants are encouraged to grow taller in height. Cultivated plants become a tall stalky crop that usually reaches between 6 and 15 feet, and generally consist of a single main stalk with few leaves and branches. Hemp plants grown for 8 CRS communication with Anndrea Hermann, Hemp Oil Canada Inc., December 2009. Pollen is present at a very early plant development stage. 9 D. P. West, “Hemp and Marijuana: Myths & Realities,” February 1998, http://www.gametec.com/hemp/ hempandmj.html. Also see information posted by Vote Hemp Inc., “Different Varieties of Cannabis” (no date), http://www.votehemp.com/different_varieties.html. Congressional Research Service 3 Hemp as an Agricultural Commodity fiber or oilseed are planted densely (about 35-50 plants per square foot)1010 to discourage branching and flowering. The period of seeding to harvest ranges from 70 to 140 days, depending on the purpose, cultivar or variety, and climatic conditions. The stalk and seed is the harvested product. The stalk of the plant provides two types of fibers: the outer portion of the stem contains the bast fibers, and the interior or core fiber (or hurds). Industrial hemp production statistics for Canada indicate that one acre of hemp yields an average of about 700 pounds of grain, which can be pressed into about 50 gallons of oil and 530 pounds of meal.1111 That same acre will also produce an average of 5,300 pounds of straw, which can be transformed into about 1,300 pounds of fiber. Marijuana Marijuana When cannabis is grown to produce marijuana, it is cultivated from varieties where the female flowers of dioecious drug strains are selected to prevent the return of separate male and female plants.1212 The female flowers are short and tightly clustered. In marijuana cultivation, growers remove all the male plants to prevent pollination and seed set. Some growers will hand-pollinate a female plant to get seed; this is done in isolation of the rest of the female plants. The incorporation and stabilization of monoecism in cannabis cultivation requires the skill of a competent plant breeder, and rarely occurs under non-cultivated conditions. If marijuana is grown in or around industrial hemp varieties, the hemp would pollinate the female marijuana plant. Marijuana growers would not want to plant near a hemp field, since this would result in a harvest that is seedy and lower in THC, and degrade the value of their marijuana crop. Marijuana is cultivated to encourage the plant to become bushy with many leaves, with wide branching to promote flowers and buds. This requires that plants be well-spaced, by as much as about 1-2 plants per square yard.1313 The flower and leaves are the harvested products. Hemp Production and Use Commercial Uses of Hemp Industrial hemp can be grown as a fiber, seed, or dual-purpose crop.1414 The interior of the stalk has short woody fibers called hurds; the outer portion has long bast fibers. Hemp seed/grains are smooth and about one-eighth to one-fourth of an inch long.15 10 Innvista, “Hemp Biology,” September 25, 2012, http://www.innvista.com/health/foods/hemp/hemp-biology/. Agriculture and Agri-Food Canada, “Industrial Hemp” (no date), http://www4.agr.gc.ca/. 12 H. van Bakel et al., “The Draft Genome and Transcriptome of Cannabis sativa,” Genome Biology, Vol. 12, Issue 10, 2011. In botany, dioecious is a term describing plant varieties that possess male and female flowers or other reproductive organs on separate, individual plants. 13 Innvista, “Hemp Biology,” September 25, 2012, http://www.innvista.com/health/foods/hemp/hemp-biology/. 14 Different varieties have been developed may be better suited for one use or the other. Cultivation practices also differ depending upon the variety planted. 15 For additional information, see U.S. Department of Agriculture, Economic Research Service, Industrial Hemp in the United States: Status and Market Potential, ERS Report AGES001E, January 2000. 11 Congressional Research Service 4 Hemp as an Agricultural Commodity smooth and about one-eighth to one-fourth of an inch long.15 Although hemp is not grown in the United States, both finished hemp products and raw material inputs are imported and sold for use in manufacturing for a wide range of product categories ( (Figure 2). Hemp fibers are used in a wide range of products, including fabrics and textiles, yarns and spun fibers, paper, carpeting, home furnishings, construction and insulation materials, auto parts, and composites. Hurds are used in various applications such as animal bedding, material inputs, papermaking, and composites. Hemp seed and oilcake are used in a range of foods and beverages, and can be an alternative food protein source. Oil from the crushed hemp seed is used as an ingredient in a range of body-care products and nutritional supplements.1616 Hemp seed is also used for industrial oils, cosmetics and personal care products, and pharmaceuticals, among other composites.
Figure 2. Flowchart of Potential Hemp Products Source: CRS, adapted from D. G. Kraenzel et al., “"Industrial Hemp as an Alternative Crop in North Dakota,” " AER-402, North Dakota State University, July 23, 1998. Some estimate that the global market for hemp consists of more than 25,000 products in nine submarkets: agriculture; textiles; recycling; automotive; furniture; food/nutrition/beverages; paper; construction materials; and personal care. For construction materials, such as hempcrete (a mixture of hemp hurds and lime products), hemp is used as a lightweight insulating material.17 17 Hemp has also been promoted as a potential biodiesel feedstock,18 although some analysts 16 Some have suggested similarities between hempseed oil and hash oil. However, there is evidence suggesting differences regarding initial feedstock or input ingredients (hash oil requires high-THC marijuana, whereas hempseed oil uses low THC industrial hemp); how they are produced (hash oil is extracted often using a flammable solvent, whereas hempseed oil is expeller-pressed or extracted mechanically, generally without chemicals or additives); and how they are used (hash oil is used as a psychoactive drug, whereas hempseed oil is used as an ingredient in hempbased foods, supplements, and body care products). For more background information, contact the author of this report. 17 “Hemp Homes Are Cutting Edge of Green Building,” USA Today, September 12, 2010; and “Construction Plant,” Financial Times, January 22, 2010. 18 Manitoba Agriculture, National Industrial Hemp Strategy, March 2008, p. 293; J. Lane, “Hemp Makes Comeback as (continued...) Congressional Research Service 5 Hemp as an Agricultural Commodity 18 although some analysts suggest that competing demands for other products might make it too costly to use as a feedstock.19 19 These types of commercial uses are widely documented in a range of feasibility and marketing studies conducted by researchers at the U.S. Department of Agriculture (USDA) and various land grant universities and state agencies. (A listing of these studies is in the Appendix.) Estimated Retail Market There is no official estimateAppendix.) Estimated Retail Market No official estimates are available of the value of U.S. sales of hemp-based products. The Hemp Industries Association (HIA) estimates that the total U.S. retail value of hemp products in 2013 2014 was $581620 million, which includes food and body products, clothing, auto parts, building materials , and other products.2020 Of this, HIA reports that the value of hemp-based food, supplements, and body care sales in the United States totaled $184 million. Previous reports about the size of the U.S. market for hemp clothing and textiles are estimated at about $100 million annually.21 21 The reported retail value of the U.S. hemp market is an estimate and is difficult to verify. Underlying data for this estimate are from SPINS survey data;2222 however, because the data reportedly do not track retail sales for The Body Shop and Whole Foods Market—two major markets for hemp-based products—as well as for restaurants, hemp industry analysts have adjusted these upward to account for this gap in the reported survey data.23 23 Available industry information indicates that sales of some hemp-based products, such as foods and body care products, isare growing.2424 Growth in hemp specialty food products is driven, in part, by sales of hemp milk and related dairy alternatives, among other hemp-based foods.25 25 Information is not available on other potential U.S. hemp-based sectors, such as for use in construction materials or biofuels, paper, and other manufacturing uses. Data are not available on existing businesses or processing facilities that may presently be engaged in such activities within the United States. (...continued) Biofuels Feedstock in 43-acre California Trial,” Biofuels Digest, August 24, 2009; and H. Jessen, “Hemp Biodiesel: When the Smoke Clears,” Biodiesel Magazine, February 2007. 19 North Dakota State University (NSDU), “Biofuel Economics: Biocomposites—New Uses for North Dakota Agricultural Fibers and Oils” (no date). 20 HIA, “2013 Annual Retail Sales for Hemp Products Exceeds $581 Million,” February 28, 2014. 21 HIA, “Hemp Fabric goes High Fashion,” February 11, 2008. Estimate reflects best available current information based on personal communication between CRS and HIA. 22 SPINS tracks data and market trends on the Natural Product Industry sales (http://www.spins.com/). 23 CRS communication with representatives of Vote Hemp, Inc., May 2010. See also HIA’s press release, “Growing Hemp Food and Body Care Sales is Good News for Canadian Hemp Seed and Oil Producers,” April 29, 2009. 24 H. Fastre, CEO of Living Harvest Foods, based on his comments and presentation, “The Future of Hemp,” HIA Convention, Washington DC, October 2009; and HIA, “Growing Hemp Food and Body Care Sales is Good News for Canadian Hemp Seed and Oil Producers,” April 29, 2009. 25 HIA, “Hemp Milk Products Boosted Growth of Hemp Food Market in 2007,” March 14, 2008. Congressional Research Service 6 Hemp as an Agricultural Commodity the United States. U.S. Hemp Imports The import value of hemp-based products imported and sold in the United States is difficult to estimate accurately. For some traded products, available statistics have only limited breakouts or have been expanded only recently to capture hemp subcategories within the broader trade categories for oilseeds and fibers. Reporting errors are evident in some of the trade data, since reported export data for hemp from Canada do not consistently match reported U.S. import data for the same products (especially for hemp seeds). Given these data limitations, available trade statistics indicate that the value of U.S. imports under categories actually labeled “"hemp,”" such as hemp seeds and fibers, which are more often used as inputs for use in further manufacturing, was nearly $36.9 million in 2013. Compared to available data for 2005, the value of imported hemp products for use as inputs and ingredients has increased more than sixfold. However, import volumes for other products, such as hemp oil and fabrics fabrics, are lower (Table 1). Trade data are not available for finished products, such as hempbasedhemp-based clothing or other products including construction materials, carpets, or hemp-based paper products. paper products. The single largest supplier of U.S. imports of raw and processed hemp fiber is China. Other leading country suppliers include Romania, Hungary, India, and other European countries. The single largest source of U.S. imports of hemp seed and oilcake is Canada. The total value of Canada’ Canada's exports of hemp seed to the United States has grown significantly in recent years following resolution of a long-standing legal dispute over U.S. imports of hemp foods in late 2004 (see “"Dispute over Hemp Food Imports (1999-2004)”"). European countries such as the United Kingdom and Switzerland also have supplied hemp seed and oilcake to the United States. U.S. Market Potential In the past two decades, several feasibility and marketing studies have been conducted by researchers at the USDA and various land grant universities and state agencies (for example, Arkansas, Kentucky, Maine, Minnesota, North Dakota, Oregon, and Vermont; see Appendix). Appendix). Studies by researchers in Canada and various state agencies provide a mostly positive market outlook for growing hemp, citing rising consumer demand and the potential range of product uses for hemp. Some state reports claim that if current restrictions on growing hemp in the United States were removed, agricultural producers in their states could benefit. A 2008 study reported that acreage under cultivation in Canada, “"while still showing significant annual fluctuations, is now regarded as being on a strong upward trend.”" Most studies generally note that “"hemp ... has such a diversity of possible uses, [and] is being promoted by extremely enthusiastic market developers.”" Other studies highlight certain production advantages associated with hemp or acknowledge hemp’'s benefits as a rotational crop or further claim that hemp may be less environmentally degrading than other agricultural crops. Some studies also claim certain production advantages to hemp growers, such as relatively low input and management requirements for the crop. Other studies focused on the total U.S. market differ from the various state reports and provide a less favorable aggregate view of the potential market for hemp growers in the United States. Two studies, conducted by researchers at USDA and University of Wisconsin-Madison (UW-M), highlight some of the continued challenges facing U.S. hemp producers. Congressional Research Service 7 Table 1. Value and Quantity of U.S. Imports of Selected Hemp Products, Selected Years, 1996-2013 units Hemp Seeds (HS 1207990220)a $1000 Hemp Oil and Fractions (HS 1515908010) $1000 Hemp Seed Oilcake and Other Solids (HS 2306900130) $1000 True Hemp, raw/processed not spun (HS 5302) $1000 True Hemp Yarn (HS 5308200000) $1000 True Hemp Woven Fabrics (HS 5311004010) $1000 Total Hemp Seeds (HS 1207990220)a metric ton Hemp Oil and Fractions (HS 1515908010) metric ton Hemp Seed Oilcake and Other Solids (HS 2306900130) metric ton True Hemp, raw/processed not spun (HS 5302) metric ton True Hemp Yarn (HS 5308200000) metric ton Subtotal True Hemp Woven Fabrics (HS 5311004010) m2 (1000) 1996 2000 2005 2009 2010 2011 2012 2013 — — 271 3,320 5,154 6,054 13,057 26,710 — — 3,027 1,042 1,833 1,146 1,098 2,264 — — — 1,811 2,369 2,947 4,388 6,279 100 577 228 114 94 181 157 78 25 640 904 568 296 580 496 478 1,291 2,258 1,232 894 1,180 1,363 1,363 1,057 1,416 3,475 5,662 7,749 10,926 12,271 20,559 36,866 — — 92 602 711 623 1,237 2,272 — — 287 128 215 157 208 450 — — — 201 240 298 441 601 53 678 181 83 42 89 66 72 6 89 113 76 42 86 88 70 59 767 673 1,090 1,250 1,253 2,040 3,465 435 920 478 263 284 270 319 224 Source: Compiled by CRS using data from the U.S. International Trade Commission (USITC), highlight some of the continued challenges facing U.S. hemp producers.
Figure 4. Canadian Hemp Acreage, 1998-2011 Source: Agriculture and Agri-Food Canada, "Industrial Hemp Statistics," http://www4.agr.gc.ca/AAFC-AAC/ display-afficher.do?id=1174420265572&lang=eng. eng. Note: The downturn in 2007 is viewed as a correction of overproduction in 2006, following the “"success of the court case against the DEA in 2004, and continued improvements in breeding, production, and processing,” " which resulted in part in a “"dramatic reduction in hemp acreage planted”" in 2007. The 2007 downturn is also attributed to “"increasingly positive economics of growing other crops”" (Manitoba Agriculture, National Industrial Hemp Strategy, March 2008, prepared for Food and Rural Initiative Agriculture and Agri-Food Canada). Between 1914 and 1933, in an effort to stem the use of Cannabis flowers and leaves for their psychotropic effects, 33 states passed laws restricting legal production to medicinal and industrial purposes only.42 The 1937 Marihuana Tax Act defined hemp as a narcotic drug, requiring that farmers growing hemp hold a federal registration and special tax stamp, effectively limiting further production expansion. In 1943, U.S. hemp production reached more than 150 million pounds (140.7 million pounds hemp fiber; 10.7 million pound hemp seed) on 146,200 harvested acres. This compared to prewar production levels of about 1 million pounds. After reaching a peak in 1943, production started to decline. By 1948, production had dropped back to 3 million pounds on 2,800 harvested acres, with no recorded production after the late 1950s.43 Currently, industrial hemp is not grown commercially in the United States. No active federal licenses allow U.S. commercial cultivation at this time. 42 R. J. Bonnie and C. H. Whitebread, The Marihuana Conviction: A History of Marihuana Prohibition in the United States (Charlottesville: University Press of Virginia, 1974), p. 51. 43 USDA Agricultural Statistics, various years through 1949. A summary of data spanning 1931-1945 is available in the 1946 edition. See “Table 391—Hemp Fiber and hempseed: Acreage, Yield, and Production, United States.” Congressional Research Service 12 Hemp as an Agricultural Commodity Legal Status in the United States Federal Drug Law Controlled Substances Act of 1970 Hemp Strategy, March 2008, prepared for Food and Rural Initiative Agriculture and Agri-Food Canada). Legal Status in the United States Federal Law and Requirements Controlled Substances Act of 1970 In 1937, Congress passed the first federal law to discourage Cannabiscannabis production for marijuana while still permitting industrial uses of the crop (the Marihuana Tax Act; 50 Stat. 551). Under this statute, the government actively encouraged farmers to grow hemp for fiber and oil during World War II. After the war, competition from synthetic fibers, the Marihuana Tax Act, and increasing public anti-drug sentiment resulted in fewer and fewer acres of hemp being planted, and none at all after 1958. Strictly speaking, the Controlled Substances Act of 1970 (CSA, 21 U.S.C. §801 et. seq.) does not make growing hemp illegal; rather, it places strict controls on the production of hemp, making it illegal to grow the crop without a DEA permit. The CSA adopted the same definition of Cannabis sativaCannabis sativa that appeared in the 1937 Marihuana Tax Act. The definition of “marihuana”"marihuana" (21 U.S.C. §802(16)) reads: The term marihuana means all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin. Such term does not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound ... or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination. The statute thus retains control over all varieties of the cannabis plant by virtue of including them under the term “marijuana”"marijuana" and does not distinguish between low- and high-THC varieties. The language exempts from control the parts of mature plants—stalks, fiber, oil, cake, etc.—intended for industrial uses. Some have argued that the CSA definition exempts industrial hemp under its term exclusions for stalks, fiber, oil and cake, and seeds.4444 DEA refutes this interpretation.45 45 DEA Permit Requirements Federal law prohibits cultivation without a permit, DEA determines whether any industrial hemp production authorized under a state statute is permitted, and it enforces standards governing the security conditions under which the crop must be grown. In other words, a grower needs to get permission from the DEA to grow hemp or faces the possibility of federal charges or property confiscation, regardless of whether the grower has a state-issued permit.46 44 See, for example, Hemp Industries Association v. Drug Enforcement Administration, 357 F.2d (9th Circuit 2004). 66 Federal Register 51530, October 9, 2001. 46 Registration requirements are at 21 C.F.R. 823. See also DEA’s registration procedures and applications at http://www.deadiversion.usdoj.gov/drugreg/process.htm. 45 Congressional Research Service 13 Hemp as an Agricultural Commodity 46 Although many states have established programs under which a farmer may be able to grow industrial hemp under certain circumstances, a grower would still need to obtain a DEA permit and abide by the DEA’'s strict production controls. This relationship has resulted in some highprofilehigh-profile cases, wherein growers have applied for a permit but DEA has not approved (or denied) a permit to grow hemp, even in states that authorize cultivation under state laws. Ongoing cases involve attempts to grow hemp under state law in North Dakota, Montana, Vermont, and other states. DEA issued a permit for an experimental quarter-acre plot at the Hawaii Industrial Hemp Research Program during the period from 1999 to 2003 (now expired).47 Most reports indicate that the DEA has not granted any current licenses to grow hemp, even for research purposes.48 To date, all commercial hemp products sold in the United States are imported or manufactured from imported hemp materials. In May 2013, it was reported that hemp was being cultivated in Colorado, following changes to that state’s laws in November 2012. Similarly, Montana passed its state law authorizing hemp production in 2001. In October 2009, Montana’s Agriculture Department issued its first state license for an industrial hemp-growing operation in the state. Media reports indicate that the grower does not intend to request a federal permit. Some argue that this case could pose a potential challenge to DEA of whether it is willing to override the state’s authority to allow for hemp production in the state, as well as a test of state’s rights.49 permit to grow hemp, even in states that authorize cultivation under state laws. In the past there has been ongoing tension between federal and state authorities over state hemp policies. After passing its own state law authorizing industrial hemp production in 1999,50 47 researchers in North Dakota repeatedly applied for, but did not receive, a DEA permit to cultivate hemp for research purposes in the state.5148 Also in 2007, two North Dakota farmers were granted state hemp farming licenses and, in June 2007, filed a lawsuit in U.S. District Court (North Dakota) seeking “"a declaratory judgment”" that the CSA “"does not prohibit their cultivation of industrial hemp pursuant to their state licenses.”52"49 The case was dismissed in November 2007.53 50 The case was appealed to the U.S. Court of Appeals (8th8th Circuit), but was again dismissed in December 2009.5451 They filed an appeal in May 2010.55 52 Even if DEA were to approve a permit, it could be argued that production might be limited or discouraged because of the perceived difficulties of working through DEA licensing requirements and installing the types of structures necessary to obtain a permit. Obtaining a DEA permit to produce hemp requires that the applicant demonstrate that an effective security protocol will be in place at the production site, such as security fencing around the planting area, a 24-hour 47 DEA, “Statement from the Drug Enforcement Administration on the Industrial Use of Hemp,” March 12, 1998. S. Raabe, “First Major Hemp Crop in 60 Years Is Planted in Southeast Colorado,” Denverpost.com, May 13, 2013. 49 M. Brown, “First License Issued to Montana Hemp Grower,” Missoulian, October 27, 2009. 50 The North Dakota Department of Agriculture issued final regulations in 2007 on licensing hemp production. For information on the state’s requirements, see http://www.agdepartment.com/Programs/Plant/HempFarming.htm. 51 See, for example, letter from North Dakota State University to the DEA, July 27, 2007. 52 David Monson and Wayne Hauge v. Drug Enforcement Administration and United States Department of Justice, Complaint for Declaratory Judgment, U.S. District Court for the District of North Dakota, June 18, 2007. For an overview, see Vote Hemp Inc. website: http://www.votehemp.com/legal_cases_ND.html#overview. 53 Monson v. DEA, 522 F. Supp. 2d 1188 (D.N.D. 2007). 54 Monson v. DEA, 589 F.3d 952 (8th Cir. 2009). 55 S. Roesler, “ND Farmers File Another Industrial Hemp Appeal in District Court,” Farm & Ranch Guide, June 4, 2010. 48 Congressional Research Service 14 Hemp as an Agricultural Commodity place at the production site, such as security fencing around the planting area, a 24-hour monitoring system, controlled access, and possibly armed guard(s) to prevent public access.56 53 DEA application requirements also include a nonrefundable fee, FBI background checks, and extensive documentation. It could also be argued that, because of the necessary time-consuming steps involved in obtaining and operating under a DEA permit, the additional management and production costs from installing structures, as well as other business and regulatory requirements, could ultimately limit the operation’s profitability. DEA’s 2003 Rules Regarding Hemp In March 2003, DEA issued two final rules addressing the legal status of hemp products derived from the cannabis plant. The DEA found that hemp products “often contain the hallucinogenic substance tetrahydrocannabinols (THC) ... the primary psychoactive chemical found in the cannabis (marijuana) plant.”57 Although the DEA acknowledged that “in some cases, a Schedule I controlled substance may have a legitimate industrial use,” such use would only be allowed under highly controlled circumstances. These rules set forth what products may contain “hemp” and also prohibit “cannabis products containing THC that are intended or used for human consumption (foods and beverages).”58 Development of the 2003 rule sparked a fierce battle over the permissibility of imported hemp-based food products that lasted from 1999 until 2004. Dispute over Hemp Food Imports (1999-2004) In late 1999, during the development of the 2003 rules (described in the previous section), the DEA acted administratively to demand that the U.S. Customs Service enforce a zero-tolerance standard for the THC content of all forms of imported hemp, and hemp foods in particular. The DEA followed up, in October 2001, with publication of an interpretive rule in the Federal Register explaining the basis of its zero-tolerance standard.59 It held that when Congress wrote the statutory definition of marijuana in 1937, it “exempted certain portions of the Cannabis plant from the definition of marijuana based on the assumption (now refuted) that such portions of the plant contain none of the psychoactive component now known as THC.” Both the proposed rule (which was published concurrently with the interpretive rule) and the final 2003 rule gave retailers of hemp foods a date after which the DEA could seize all such products remaining on shelves. On both rules, hemp trade associations requested and received court-ordered stays blocking enforcement of that provision. The DEA’s interpretation made hemp with any THC content subject to enforcement as a controlled substance. Hemp industry trade groups, retailers, and a major Canadian exporter filed suit against the DEA, arguing that congressional intent was to exempt plant parts containing naturally occurring THC at non-psychoactive levels, the same way it exempts poppy seeds containing trace amounts of naturally occurring opiates.60 Industry groups maintain that (1) naturally occurring THC in the leaves and flowers of cannabis varieties grown for fiber and food is already at belowpsychoactive levels (compared with drug varieties); (2) the parts used for food purposes (seeds 56 University of Kentucky Cooperative Extension Service, “Industrial Hemp—Legal Issues,” September 2012. DEA, “DEA History in Depth,” 1999-2003, and other DEA published resources. 58 Ibid. 59 66 Federal Register 51530, October 9, 2001. 60 21 U.S.C. §802 (19) and (20). 57 Congressional Research Service 15 Hemp as an Agricultural Commodity and oil) contain even less; and (3) after processing, the THC content is at or close to zero. U.S. and Canadian hemp seed and food manufacturers have in place a voluntary program for certifying low, industry-determined standards in hemp-containing foods. Background information on the TestPledge Program is available at http://www.TestPledge.com. The intent of the program is to assure that consumption of hemp foods will not interfere with workplace drug testing programs or produce undesirable mental or physical health effects. On February 6, 2004, the U.S. Court of Appeals for the Ninth Circuit permanently enjoined the enforcement of the final rule.61 The court stated that “the DEA’s definition of ‘THC’ contravenes the unambiguously expressed intent of Congress in the CSA and cannot be upheld.”62 In late September 2004 the Bush Administration let the final deadline pass without filing an appeal. Other DEA Policy Statements Other DEA documentation illustrates how DEA has reviewed inquiries about the legal status of 's profitability.
Figure 5. State Laws Related to Industrial Hemp Source: National Conference of State Legislatures (NCSL), State Industrial Hemp Statutes (http://www.ncsl.org/research/agriculture-and-rural-development/state-industrial-hemp-statutes.aspx).
FY2015 and FY2016 Appropriations Provisions In response to actions taken by DEA to block seeds imported by some states in order to grow industrial hemp, and to avoid future similar actions by DEA to stall full implementation of the hemp provision of the farm bill, Congress acted swiftly. Both the House and Senate FY2015 Commerce-Justice-Science (CJS) appropriations bills80bills107 contained provisions to block federal law enforcement authorities from interfering with state agencies and hemp growers, as well as to counter efforts to obstruct agricultural research. The enacted FY2015 appropriation (P.L. 113235) blocks federal law enforcement authorities from interfering with state agencies, hemp growers, and agricultural research.81108 The provision states that “"none of the funds made available” " to the U.S. Department of Justice (DOJ) and the Drug Enforcement Agency (DEA) “"may be used in contravention”" of the 2014 farm bill (P.L. 113-79, §7606). Similar language is contained in the enacted FY2016 Consolidated Appropriations Act.109 During both the FY2015 and FY2016 appropriations debates, the House CJS bills also included provisions , §7606). The House bill had further provided that no funds be used to prevent a state from implementing its own state laws that “"authorize the use, distribution, possession, or cultivation of industrial hemp”" as defined in the 2014 farm bill, but this provision was not adopted.82 Other Federal Actions Involving USDA In 1994, President Clinton issued Executive Order 12919, entitled “National Defense Industrial Resources Preparedness,” which was intended to strengthen the U.S. industrial and technology base for meeting national defense requirements. The order included hemp among the essential agricultural products that should be stocked for defense preparedness purposes.83 Some hemp 80 H.R. 4660, §560; and S. 2437, §220. P.L. 113-235, Division B—Commerce, Justice, Science, and Related Agencies Appropriations Act, 2015, Title V, General Provisions, §539. 82 H.R. 4660, §557. 83 Hemp is included under the category of “food resources,” which it defined to mean, in part, “all starches, sugars, vegetable and animal or marine fats and oils, cotton, tobacco, wool, mohair, hemp, flax, fiber and other materials, but not any such material after it loses its identity as an agricultural commodity or product.” 81 Congressional Research Service 20 Hemp as an Agricultural Commodity supporters have argued that the executive order gives hemp a renewed value as a strategic crop for national security purposes, in line with its role in World War II.84 USDA has supported research on alternative crops and industrial uses of common commodities since the late 1930s. Some alternative crops have become established in certain parts of the United States—kenaf (for fiber) in Texas, jojoba (for oil) in Arizona and California, and amaranth (for nutritious grain) in the Great Plains states. Many have benefits similar to those ascribed to hemp, but are not complicated by having a psychotropic variety within the same species. The Critical Agricultural Materials Act of 1984 (P.L. 98-284, 7 U.S.C. §178) supports the supplemental and alternative crops provisions of the 1985 and 1990 omnibus farm acts and other authorities, and funds research and development on alternative crops at USDA and state laboratories. In 2010, USDA recommended $1.083 million for programs under the act.85 In addition, Section 1473D of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (NARETPA, 7 U.S.C. §3319d(c)) authorizes USDA to make competitive grants toward the development of new commercial products derived from natural plant material for industrial, medical, and agricultural applications.86 In 2010, USDA recommended $835,000 for the program.87 To date, these authorities have not been used to develop hemp cultivation and use. The United States is a signatory of the United Nations Single Convention on Narcotic Drugs, 1961 (as amended by the 1972 Protocol Amending the Single Convention on Narcotic Drugs, 1961).88 The principal objectives of the convention are to “limit the possession, use, trade in, distribution, import, export, manufacture and production of drugs exclusively to medical and scientific purposes and to address drug trafficking through international cooperation to deter and discourage drug traffickers.”89 The convention requires that each party control cannabis cultivation within its borders; however, Article 28.2 of the convention states: “This Convention shall not apply to the cultivation of the cannabis plant exclusively for industrial purposes (fibre and seed) or horticultural purposes.”90 Thus the convention need not present an impediment to the development of a regulated hemp farming sector in the United States. State Laws Since the mid-1990s, there has been a resurgence of interest in the United States in producing industrial hemp. Farmers in regions of the country that are highly dependent upon a single crop, such as tobacco or wheat, have shown interest in hemp’s potential as a high-value alternative crop, although the economic studies conducted so far paint a mixed profitability picture. Following passage of the 2014 farm bill provision allowing for growing hemp under certain circumstances (see “2014 Farm Bill”), several states have quickly been adopting new state laws to allow for cultivation. These include California, Colorado, Connecticut, Delaware, Hawaii, 84 J. B. Kahn, “Hemp ... Why Not?” Berkeley Electronic Press (bepress) Legal Series, Paper 1930, 2007. USDA’s 2011 Explanatory Notes, http://www.obpa.usda.gov/17nifa2011notes.pdf. 86 For information, see USDA, http://www.csrees.usda.gov/funding/rfas/pdfs/10_alt_crops.pdf. 87 See USDA’s 2011 Explanatory Notes, http://www.obpa.usda.gov/17nifa2011notes.pdf. 88 United Nations Single Convention on Narcotic Drugs, 1961 (as amended by the 1972 Protocol Amending the Single Convention on Narcotic Drugs, 1961), Article 28. 89 Information posted on International Narcotics Control Board (INCB) website. 90 Ibid. 85 Congressional Research Service 21 Hemp as an Agricultural Commodity Illinois, Indiana, Kentucky, Maine, Montana, Nebraska, New Hampshire, New York, North Dakota, Oregon, South Carolina, Tennessee, Utah, Vermont, and West Virginia. The status of state actions regarding hemp is changing rapidly; resources for updated information include the National Conference of State Legislatures (NCSL) and the advocacy group Vote Hemp.91 Beginning around 1995, an increasing number of state legislatures began to consider a variety of initiatives related to industrial hemp. Most of these have been resolutions calling for scientific, economic, or environmental studies, and some are laws authorizing planting experimental plots under state statutes. Nonetheless, the actual planting of hemp, even for state-authorized experimental purposes, remains regulated by the DEA under the Controlled Substances Act. As of January 2015, nearly 30 states or territories have reportedly introduced legislation favorable to hemp cultivation, and 20 states have already passed such legislation.92 A rough summary of current state legislative actions regarding industrial hemp is as follows. • Several states (between 15 to 18 states, depending on the source) have laws to provide for industrial hemp production as described by the 2014 farm bill provision: California, Colorado, Hawaii, Indiana, Kentucky, Maine, Minnesota, Montana, Nebraska, New York, North Dakota, Oregon, South Carolina, Tennessee, Utah, Vermont, Washington, and West Virginia. • Several states (28) and Puerto Rico have introduced or carried over industrial hemp legislation: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Washington, West Virginia, and Wisconsin. • Several states have passed hemp resolutions (e.g., California, Colorado, Illinois, Maine, Montana, New Hampshire, New Mexico, North Dakota, Oregon, Vermont, and Virginia). • Several states have passed bills creating commissions or authorizing research (e.g., Hawaii, Kentucky, and Maryland). • Several states have passed hemp study bills (e.g., Arkansas, Illinois, Maine, Minnesota, New Mexico, North Carolina, North Dakota, and Vermont). Other states have done studies without a legislative directive. • Production of industrial hemp has been reported in Colorado, Kentucky, and Vermont. Among the types of current state policies are the following:93 defining industrial hemp based on the percentage of tetrahydrocannabinol it contains; authorizing the growing and possessing of industrial hemp; requiring state licensing of industrial hemp growers; promoting research and 91 NCSL, State Industrial Hemp Statutes (http://www.ncsl.org/research/agriculture-and-rural-development/stateindustrial-hemp-statutes.aspx); Vote Hemp (http://www.votehemp.com/state.html#2014). 92 CRS using information from NCSL and Vote Hemp. Information for some states on these two websites oftentimes does not agree. 93 NCSL, State Industrial Hemp Statutes (http://www.ncsl.org/research/agriculture-and-rural-development/stateindustrial-hemp-statutes.aspx). Congressional Research Service 22 Hemp as an Agricultural Commodity development of markets for industrial hemp; excluding industrial hemp from the definition of controlled substances under state law; and establishing a defense to criminal prosecution under drug possession or cultivation. Many states have established programs under which a farmer may be able to grow industrial hemp under certain circumstances, however, despite some state laws, a grower would still need to obtain a DEA permit and abide by the DEA’s strict production controls. For example, changes to Colorado’s state laws in November 2012 now allow for industrial hemp cultivation. Industrial hemp was reported as being grown in Colorado in 2013.94 However, growers and state authorities continue to face a number of challenges implementing Colorado’s law, including sampling, registration and inspection, seed availability and sourcing, disposition of non-complying plants, and law enforcement concerns, as well as production issues such as hemp agronomics, costly equipment, and limited manufacturing capacity, among other grower and processor concerns.95 It also remains unclear how federal authorities will respond to production in states where state laws permit growing and cultivating hemp. In November 2012, state authorities in Colorado wrote a letter to DOJ requesting clarification about how federal enforcement authorities might respond to its newly enacted laws and forthcoming regulations.96 Since federal law regards all varieties of the cannabis plant as “marijuana,” many regard DOJ’s August 2013 guidance as also likely applicable to the regulation of industrial hemp (see also “2013 DEA Guidance Outlined in “Cole Memo”).97 In November 2013, Colorado’s State Department of Agriculture officials wrote to the U.S. Department of Agriculture requesting clarification regarding the cultivation of industrial hemp specifically.98 In September 2013, Representative Blumenauer sent a letter to Oregon state officials urging them to implement that state’s hemp laws.99 In response, DOJ officials in Oregon indicated that they do not intend to interfere with their state’s hemp production as long as it is well-regulated and subject to enforcement.100 Some now regard that correspondence as further indicative of how federal authorities might respond to production in states where state laws permit growing and cultivating hemp.101 94 S. Raabe, “First major Hemp Crop in 60 Years is Planted in Southeast Colorado,” Denverpost.com, May 13, 2013; also see E. Hunter, “Industrial Hemp in Colorado,” November 17 (presentation at the 2013 HIA conference). 95 R. Carleton, “Regulating Industrial Hemp: The Colorado Experience,” February 3, 2013 (presentation at the 2014 National Association of State Department of Agriculture (NASDA) winter meeting); and E. Hunter, “Industrial Hemp in Colorado,” November 17, 2013 (presentation at the 2013 HIA conference). 96 Letter to Eric Holder, Jr., U.S. Attorney General, from the Governor and Attorney General of the State of Colorado, November 13, 2012. 97 See discussion in “2013 DEA Guidance Outlined in “Cole Memo” Letter to interested parties from Joe Sandler, Counsel for Vote Hemp, November 13, 2013. 98 Letter to Tom Vilsack, Secretary of Agriculture, from the Commissioner of the Colorado Department of Agriculture, November 13, 2013. 99 Letter from Representative Earl Blumenauer to Oregon Department of Agriculture and State Board of Agriculture officials, September 17, 2013. 100 Letter to Representative Earl Blumenauer, from S. Amanda Marshall, U.S. Attorney, District of Oregon, November 7, 2013. See also N. Crombie, “U.S. Rep. Earl Blumenauer urges Oregon to implement industrial hemp law,” The Oregonian, September 18, 2013. 101 CRS communication with representatives of Vote Hemp, Inc., January 2014. Congressional Research Service 23 Hemp as an Agricultural Commodity Ongoing Legislative Activity Industrial Hemp Farming Act Other introduced legislation would provide for even greater opportunities for commercial cultivation of industrial hemp in the United States. In the 114th Congress, the Industrial Hemp Farming Act of 2015 (Massie/H.R. 525; Wyden/S. 134) is intended to facilitate the possible commercial cultivation of industrial hemp in the United States. The bill would amend Section 102 of the Controlled Substances Act (21 U.S.C. 802(16)) to exclude “industrial hemp” and specify that the term “marijuana” does not include industrial hemp, which the bill would define based on a determination of its THC content (not more than 0.3% THC), marijuana’s primary psychoactive chemical. Such a change could remove low-THC hemp from being covered by the CSA as a controlled substance and subject to DEA regulation, thus allowing for industrial hemp to be grown and processed under some state laws. The bill could grant authority to any state permitting industrial hemp production and processing to determine whether any such cannabis plants met the limit on THC concentration as set forth in the CSA. In any criminal or civil action or administrative proceeding, the state’s determination may be conclusive and binding. The House and Senate bills differ in that S. 134 includes a provision that would allow states to override this determination if the U.S. Attorney General determines that the state law does not “reasonably” comply with the requirements of the proposed CSA amendments. H.R. 525 does not include this language. The Industrial Hemp Farming Act was first introduced in the 109th Congress by former Representative Ron Paul, and was reintroduced in subsequent legislative sessions (H.R. 1831, 112th Congress; H.R. 1866, 111th Congress; H.R. 1009, 110th Congress; H.R. 3037, 109th Congress). In the 112th Congress, Senator Ron Wyden introduced S. 3501 in the Senate.102 Representative Massie introduced H.R. 525, and Senator Wyden introduced S. 359 in the 113th Congress. Some in Congress believe that industrial hemp production could result in economic and employment gains in some states and regions.103 Charlotte’s Web Medical Hemp Act In the 113th Congress, Representative Scott Perry introduced the Charlotte’s Web Medical Hemp Act of 2014 (H.R. 5226). In this bill, Charlotte’s Web referred to high-CBD (low THC) products, such as the CBD oils that have been reported to help address ailments, such as neuropathic pain, post-traumatic stress disorder, and nausea as a result of chemotherapy, and other disorders.104 The 102 Previous versions of the bill differ. Section 3 of the 2009 bill would apply when a state has an industrial hemp regulatory scheme, whereas the 2011 bills would apply whenever state law permits “making industrial hemp,” which a state might do by exempting hemp making from its controlled substance regulatory scheme. Section 3 of the 2009 bill would have afforded state officials “exclusive authority” to construe the proposed hemp exclusion from the definition of marijuana (amending 21 U.S.C. §802(16)(B)), whereas the 2011 bills would include within the proposed industrial hemp exclusion (amending 21 U.S.C. §802(57)) any industrial hemp grown or possessed in accordance with state law relating to making industrial hemp. For more information, contact Charles Doyle, CRS attorney, 7-6968. 103 See, for example, B. Schreiner, “Senate Committee Approves Hemp Legislation,” Associated Press, February 11, 2013; also press release of Senate Minority Leader, Mitch McConnell, “Industrialized Hemp Will Help Spur Economic Growth and Create Jobs in Kentucky,” January 31, 2013. 104 Named after Charlotte Figi, who suffers from a rare pediatric seizure disorder and who reportedly has experienced (continued...) Congressional Research Service 24 Hemp as an Agricultural Commodity bill sought to amend Section 102 of the CSA to exclude “therapeutic hemp” and cannabidiol from definition of “marihuana,” which the bill defined based on its THC content, marijuana’s primary psychoactive chemical. The bill defined “therapeutic hemp” to mean “the plant Cannabis sativa L. and any part of such plant” with THC concentrations of not more than 0.3% on a dry weight basis, and defined “cannabidiol” (CBD) as “derived from therapeutic hemp.” Only CBD made from low THC hemp, as defined, would be exempt. Not all high-CBD products are formulated from industrial hemp meeting these requirements. Most of the CBD oils currently being marketed are formulated from strains of cannabis with THC levels higher than 0.3%, but generally less than 1% THC.105 Groups Supporting/Opposing Further Legislation In addition to groups such as HIA and Vote Hemp Inc. that are actively promoting reintroducing hemp as a commodity crop in the United States, some key agricultural groups also support U.S. policy changes regarding industrial hemp. For example: • The National Farmers Union (NFU) updated its 2013 farm policy regarding hemp to urge the President, Attorney General, and Congress to “direct the U.S. Drug Enforcement Administration (DEA) to reclassify industrial hemp as a noncontrolled substance and adopt policy to allow American farmers to grow industrial hemp under state law without affecting eligibility for USDA benefits.”106 Previously NFU’s policy advocated that the DEA “differentiate between industrial hemp and marijuana and adopt policy to allow American farmers to grow industrial hemp under state law without requiring DEA licenses.”107 • The National Association of State Departments of Agriculture (NASDA) “supports revisions to the federal rules and regulations authorizing commercial production of industrial hemp,” and has urged USDA, DEA, and the Office of National Drug Control Policy to “collaboratively develop and adopt an official definition of industrial hemp that comports with definitions currently used by countries producing hemp.” NASDA also “urges Congress to statutorily distinguish between industrial hemp and marijuana and to direct the DEA to revise its policies to allow USDA to establish a regulatory program that allows the development of domestic industrial hemp production by American farmers and manufacturers.”108 • In 2014, the American Farm Bureau Federation, from efforts led by the Indiana Farm Bureau, endorsed a policy to support the “production, processing, commercialization, and utilization of industrial hemp,”109 and reportedly also (...continued) relief from seizures with this strain of medical marijuana that is high in CBD and low in THC. 105 CRS communication with Project CBD representatives, September 22, 2014. 106 NFU, “Policy of the National Farmers Union,” March 2-5, 2013. 107 NFU, “National Farmers Union Adopts New Policy on Industrial Hemp,” March 22, 2010. Also see NFU, “Policy of the National Farmers Union,” enacted by delegates to the 108th annual convention, Rapid City, SD, March 14-16, 2010. 108 NASDA, “New Uses of Agricultural Products,” 2010, http://www.nasda.org/cms/7196/9017/9350/7945.aspx. 109 “AFBF delegates fine tune policies on WOTUS, embrace hemp,” Agri-Pulse, January 14, 2015. Congressional Research Service 25 Hemp as an Agricultural Commodity passed a policy resolution to oppose the “classification of industrial hemp as a controlled substance.” Previously, in 1995, the Farm Bureau had passed a resolution supporting “research into the viability and economic potential of industrial hemp production in the United States... [and] further recommend that such research includes planting test plots in the United States using modern agricultural techniques.”110 • Regional farmers’ organizations also have policies regarding hemp. For example, the North Dakota Farmers Union (NDFU), as part of its federal agricultural policy recommendations, has urged “Congress to legalize the production of industrial hemp.”111 The Rocky Mountain Farmers Union (RMFU) has urged “Congress and the USDA to re-commit and fully fund research into alternative crops and uses for crops” including industrial hemp; also, they “support the decoupling of industrial hemp from the definition of marijuana” under the CSA and “demand the President and the Attorney General direct the U.S. Drug Enforcement Agency (DEA) to differentiate between industrial hemp and marijuana and adopt a policy to allow American farmers to grow industrial hemp under state law without requiring DEA licenses,” to “legalize the production of industrial hemp as an alternative crop for agricultural producers.”112 • The National Grange voted in 2009 to support “research, production, processing and marketing of industrial hemp as a viable agricultural activity.”113 • In California, ongoing efforts to revise the definition of marijuana to exclude “industrial hemp” (SB 566) are supported by the State’s Sheriffs’ Association.114 Previous efforts in 2011 to establish a pilot program to grow industrial hemp in selected counties were supported by the county farm bureau and two sheriff’s offices (although the bill, SB 676, was later vetoed by the state’s governor).115 Despite support by some, other groups continue to oppose policy changes regarding cannabis. For example, the National Alliance for Health and Safety, as part of Drug Watch International, claims that proposals to reintroduce hemp as an agricultural crop are merely a strategy by “the international pro-drug lobby to legalize cannabis and other illicit substances.”116 The California Narcotic Officer’s Association claims that allowing for industrial hemp production would undermine state and federal enforcement efforts to regulate marijuana production, since they claim the two crops are not distinguishable through ground or aerial surveillance, but would require costly and time-consuming lab work to be conducted.117 This group also claims that these 110 See, for example, J. Patton, “American Farm Bureau calls for end to federal ban on hemp production,” Lexington Herald-Leader, January 22, 2014; and “Farm Bureau passes policy urging removal of industrial hemp classification as controlled substance,” Lane Report, January 22, 2014. 111 NDFU, “2010 Program of Policy & Action,” p. 8; also see http://www.ndfu.org. 112 RMFU, “Policy 2010,” http://www.rmfu.org/pdfs/RMFUPolicy10.pdf, p. 6, pp. 15-16, and p. 24. 113 The National Grange, “Legislative Policies,” http://www.nationalgrange.org/legislation/policy/policy_ag.htm; also see The National Grange, “Hemp Policy,” http://www.grangehemppolicy.info/. 114 Letter from the California State Sheriff’s Association to Chairwoman Cathleen Galgiani of the State Senate Agriculture Committee, March 21, 2013. 115 Letters of support for SB 678 to California State Senator, Mark Leno, from the Imperial County Farm Bureau (June 16, 2011), Office of Sheriff, Kings County (July 19, 2011), and Office of Sheriff, Kern County (July 21, 2011). 116 See, for example, Drug Watch International, “Position Statement on Hemp (Cannabis sativa L.),” November 2002. 117 Letter from the California Narcotic Officers’ Association to Governor Arnold Schwarzenegger, September 18, 2007. Congressional Research Service 26 Hemp as an Agricultural Commodity similarities would create an incentive to use hemp crops to mask illicit marijuana production, since marijuana is such a lucrative cash crop.118 Concerns about the potential linkages to the growing and use of illegal drugs are also expressed by some parent and community organizations, such as Drug Free America Foundation, Inc. and PRIDE Inc.119 Given the DEA’s current policy positions and perceived DEA opposition to changing its current policies because of concerns over how to allow for hemp production without undermining the agency’s drug enforcement efforts and regulation of the production and distribution of marijuana, hemp proponents say that further policy changes regarding industrial hemp are likely not forthcoming absent congressional legislative action. Concluding Remarks Hemp production in the United States faces a number of obstacles in the foreseeable future. The main obstacles facing this potential market are U.S. government drug policies and DEA concerns about the ramifications of U.S. commercial hemp production. These concerns are that commercial cultivation could increase the likelihood of covert production of high-THC marijuana, significantly complicating DEA’s surveillance and enforcement activities and sending the wrong message to the American public concerning the government’s position on drugs. DEA officials and a variety of other observers also express the concern that efforts to legalize hemp—as well as those to legalize medical marijuana—are a front for individuals and organizations whose real aim is to see marijuana decriminalized.120 Hemp production in the United States also faces competition from other global suppliers. The world market for hemp products remains relatively small, and China, as the world’s largest hemp fiber and seed producer, has had and likely will continue to have major influence on market prices and thus on the year-to-year profits of producers and processors in other countries.121 Canada’s head start in the North American market for hemp seed and oil also would likely affect the profitability of a start-up industry in the United States. Nevertheless, the U.S. market for hemp-based products has a highly dedicated and growing demand base, as indicated by recent U.S. market and import data for hemp products and ingredients, as well as market trends for some natural foods and body care products. Given the existence of these small-scale, but profitable, niche markets for a wide array of industrial and consumer products, commercial hemp industry in the United States could provide opportunities as an economically viable alternative crop for some U.S. growers. 118 CRS conversation with John Coleman, August 22, 2011. Information provided to CRS by Jeanette McDougal, National Alliance for Health and Safety, August 22, 2011. 120 For more information on legislative and executive branch actions concerning illegal drugs, see CRS Report RL32352, War on Drugs: Reauthorization and Oversight of the Office of National Drug Control Policy. For information on issues pertaining to medical marijuana, see CRS Report CRS Report RL33211, Medical Marijuana: Review and Analysis of Federal and State Policies. 121 T. R. Fortenbery and M. Bennett, “Opportunities for Commercial Hemp Production,” Review of Agricultural Economics, vol. 26, no. 1, Spring 2004, pp. 97-117. The time period covered in this study ends with the year 2000. 119 Congressional Research Service 27 Hemp as an Agricultural Commodity Appendix. Listing of Selected Hemp Studies Below is a listing of reports and studies, ranked by date (beginning with the most recent). • University of Kentucky, Department of Agricultural Economics, Economic Considerations for Growing Industrial Hemp: Implications for Kentucky’s .110 These provisions were not adopted.
University of Kentucky, Department of Agricultural Economics, Economic Considerations for Growing Industrial Hemp: Implications for Kentucky's Farmers and Agricultural Economy, July 2013, http://www2.ca.uky.edu/ cmspubsclass/files/EconomicConsiderationsforGrowingIndustrialHemp.pdf. • . C. A. Kolosov, “"Regulation of Industrial Hemp underUnder the Controlled Substances Act” Act" UCLA Law Review, vol. 57, no. 237, October 2009, http://uclalawreview.org/pdf/57-1-5.pdf. • . Manitoba Agriculture, National Industrial Hemp Strategy, March 2008 (prepared for Food and Rural Initiative Agriculture and Agri-Food Canada). • . Reason Foundation, “"Illegally Green: Environmental Costs of Hemp Prohibition,”" Policy Study 367, March 2008, http://www.reason.org/ps367.pdf. • . Agriculture and Agri-Food Canada, Canada’Canada's Industrial Hemp Industry, March 2007, http://www.agr.gc.ca/misb/spcrops/sc-cs_e.php?page+hemp-chanvre. • . Maine Agricultural Center, An Assessment of Industrial Hemp Production in Maine Maine, January 2007, http://www.mac.umaine.edu/. • . N. Cherrett et al., “"Ecological Footprint and Water Analysis of Cotton, Hemp and Polyester,”" Stockholm Environment Institute, 2005, http://www.seiinternationalsei-international.org/mediamanager/documents/Publications/Future/ cotton%20hemp%20polyester%20study%20sei%20and%20bioregional%20and %20wwf%20wales.pdf. • . T. R. Fortenbery and M. Bennett, “"Opportunities for Commercial Hemp Production,” " Applied Economics Perspectives and Policy, 26(1): 97-117, 2004. • E. Small and D. Marcus, “"Hemp: A New Crop with New Uses for North America,” In: " in Trends in New Crops and New Uses, 2002, http://www.hort.purdue.edu/newcrop/ncnu02/v5-284.html. • . T. R. Fortenbery and M. Bennett, “"Is Industrial Hemp Worth Further Study in the U.S.? A Survey of the Literature,”" Staff Paper No. 443, July 2001, http://ageconsearch.umn.edu/bitstream/12680/1/stpap443.pdf. • . J. Bowyer, “"Industrial Hemp (Cannabis sativa L.) as a Papermaking Raw Material in Minnesota: Technical, Economic and Environmental Considerations,” " Department of Wood & Paper Science Report Series, May 2001. • K. Hill, N. Boshard-Blackey, and J. Simson, “"Legislative Research Shop: Hemp,”" University of Vermont, April 2000, http://www.uvm.edu/~vlrs/doc/ hemp.htm. • . USDA, Economic Research Service, Industrial Hemp in the United States: Status and Market Potential, AGES001E, January 2000, http://www.ers.usda.gov/ publications/ages001e/ages001em.pdf. Congressional Research Service 28 Hemp as an Agricultural Commodity • . M. J. Cochran, T. E. Windham, and B. Moore, “"Feasibility of Industrial Hemp Production in Arkansas,”" University of Arkansas, SP102000, May 2000. • D. G. Kraenzel et al., “"Industrial Hemp as an Alternative Crop in North Dakota,” " AER 402, North Dakota State University, Fargo, July 1998, http://ageconsearch.umn.edu/handle/23264. • . E. C. Thompson et al., Economic Impact of Industrial Hemp in Kentucky, , University of Kentucky, July 1998. • D. T. Ehrensing, Feasibility of Industrial Hemp Production in the United States Pacific Northwest, SB 681, Oregon State University, May 1998, http://extension.oregonstate.edu/catalog/html/sb/sb681/. Author Contact Information Renée Johnson Specialist in Agricultural Policy rjohnson@crs.loc.gov, 7-9588 Congressional Research Service 29 .
10. Innvista, "Hemp Biology," September 25, 2012, http://www.innvista.com/health/foods/hemp/hemp-biology/. 11. Agriculture and Agri-Food Canada, "Industrial Hemp" (no date), http://www4.agr.gc.ca/.
13. Innvista, "Hemp Biology," September 25, 2012, http://www.innvista.com/health/foods/hemp/hemp-biology/.
22. SPINS tracks data and market trends on natural product industry sales (http://www.spins.com/).
31. Food and Agriculture Organization (FAO) of the United Nations, FAOSTAT crop data, http://faostat.fao.org/.
36. See Health Canada's FAQs on its hemp regulations and its application for obtaining permits (http://www.hc-sc.gc.ca/). Other information is at the Canadian Food Inspection Agency website (http://www.inspection.gc.ca/).
146. See, for example, J. Patton, "American Farm Bureau Calls for End to Federal Ban on Hemp Production," Lexington Herald-Leader, January 22, 2014; and "Farm Bureau Passes Policy Urging Removal of Industrial Hemp Classification as Controlled Substance," Lane Report, January 22, 2014.
149. National Grange, "Legislative Policies," http://www.nationalgrange.org/legislation/policy/policy_ag.htm; also see National Grange, "Hemp Policy," http://www.grangehemppolicy.info/.

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