Rope and Dope – How the DEA keeps U.S. Farmers out of a Lucrative Global Market

March 19, 2010 – On a recent day, the grandson of “America’s Hemp King” relaxed poolside while reminiscing about his family’s “sordid” history in Wisconsin’s once-booming hemp industry.

“I get chuckles and sly smiles until I clarify what I’m talking about,” says Dennis Rens, 70, in a phone conversation from his winter home in Fort Myers, Fla. Rens’ grandfather, Matt Rens, was the state’s largest hemp producer and owner of the state’s largest hemp processing mill during the crop’s heyday from 1914 to the 1950s. “In casual conversations, most people associate hemp with marijuana. Back when my grandfather had the mill, hemp was a crop, not something people talked about smoking.”

But that was a different time, a time before the government dealt the hardy crop its final blow by including it in the Controlled Substances Act of 1970 along with its cannabis cousin, marijuana.

“The peace, love, hippie movement kind of demonized it,” says state Rep. Phil Garthwaite, D-Dickeyville, the sponsor of a bill this session to create a committee to study the market for hemp. “Because of some lack of education, people are resistant to allowing farmers to grow hemp. That will change when they start looking at the facts.”

Hemp is showing up again in a slew of products ranging from makeup and clothes to milk products and protein powder. Cashing in on the bulk of the production are countries like China, Australia, France and Germany. Canadian farmers are making money, too. Yet Wisconsin, which for the first half of the last century was the country’s second-leading producer of hemp, is shut out of a market that is growing by 20 percent annually worldwide and grossing $365 million in products in North America alone, according to the Hemp Industries Association.

The logjam is at the federal level, with the U.S. Drug Enforcement Administration refusing to permit the growing of cannabis crops, which include hemp, except for a handful of researchers in university settings. U.S. Rep. Tammy Baldwin, D-Madison, is pushing to change that by supporting legislation that would declassify hemp as a controlled substance under the regulation of the DEA.

Despite the fact that the DEA isn’t handing out permits, nine states have sided with farmers and legalized hemp farming. In January, state Rep. Louis Molepske Jr., D-Stevens Point, introduced a bill that would make Wisconsin the 10th. With smoking bans on the rise and tobacco use on the decline, struggling state farmers say they want another cash crop to replace tobacco. Some in law and drug enforcement circles remain opposed, saying a state law will have little effect if the federal government continues to restrict hemp and that the need to test different varieties of cannabis for court cases will be costly.

Molepske says the state had it right at the time when the Rens family cultivated acres of hemp. “Nobody had concerns about growing hemp back then. It wasn’t an issue,” he says.

Hemp Oil Canada incorporated three days after hemp was legalized by the Canadian government in 1998. To date, its biggest customer base is in the United States.

From January to October of 2009, the company exported roughly $600,000 in hemp oil and $1.8 million in hemp protein powder to the United States. As evidenced by Canadian exports, the hemp market is much more diversified than when Wisconsin farmers last grew hemp. Lack of product diversification led to decreasing sales for hemp when demand began to shrink after World War II and cheaper, synthetic fibers started to enter the market.

Anndrea Hermann, Hemp Oil Canada’s industry liaison, says the company, along with the Canadian Hemp Trade Alliance, works with up to 150 hemp farmers annually to supply the expanding market.

“The years they plant hemp are the years my farmers go on holidays,” says Hermann, a Missouri native who immigrated to Canada to cultivate hemp seeds. “They know they will make a profit.”

Farmers can make up to $750 an acre for hemp, while corn farmers, for example, are barely breaking even in a volatile market, according to figures provided by UW-Extension and Hemp Oil Canada.

“If there is a legal market for it, there should be a legal crop to produce for it,” says Farron Havens, president and chief executive officer of the Wisconsin Agribusiness Council, which has registered in favor of Garthwaite’s bill to study the hemp market. “Any viable cash crop is worth looking into.”

No one can say exactly how large the hemp market could be in Wisconsin, but so far this year, Hemp Oil Canada has found two new customers in the state: Pearl Street Brewery in La Crosse and O’Fallon Brewery.

Although based in Missouri, O’Fallon is under contract to begin brewing and bottling its Hemp-Hop-Rye beer at the Stevens Point Brewery as soon as next month.

Brian Owens, O’Fallon’s head brewer, says the brewery was interested in using hemp as a way to educate the public about the market potential of the crop, though he was wary of creating something that would be viewed as “quirky” or “gimmicky.” He says that once he started making samples, he was impressed with the flavor imparted by hemp seeds.

“It reminds me of a blend between a sunflower and pumpkin seed,” Owens says.

But nothing with hemp is easy.

Owens had to submit a “statement of purpose” to use hemp as an ingredient in the beer’s recipe to the federal Alcohol and Tobacco Tax and Trade Bureau. In addition, he had to submit verification to the agency about the THC (tetrahydrocannabinol) level of the seeds. THC is the main psychoactive substance found in cannabis plants.

Hemp Oil Canada verifies the THC level of each seed package it sends. To satisfy federal bureau agents, Owens also needs to get the seeds tested at a lab in the United States. Each test costs $150. The test results don’t need to be turned in to the alcohol and tobacco bureau, but the company needs to keep them on file in case of an inspection, or to prove to law enforcement the seeds are from hemp, not marijuana.

“I know the results of the hemp seed tests have been within the acceptable threshold, but I still don’t know what that threshold is,” Owens says. “I think that’s really odd.”

In fact, nowhere in the agency’s four-page “Hemp Policy” does it state an acceptable level for the amount of THC that can be detected in hemp oil and seeds. The policy only says “to specify the amount of THC detected, or state that none was detected.”

Last week, Owens was dealt his final, minor delay from the alcohol and tobacco bureau when officials denied the brewery’s label permit because it had a picture of a hemp plant on it. By removing the hemp plant and adding the words “malt beverage brewed with hemp seeds,” the label was approved Friday.

“It’s unbelievable,” Owens says. “This is just crazy, crazy, stuff.”

Owens expects to import between 2,000 and 4,000 pounds of hemp seeds annually from Canada to the brewery’s Stevens Point location. He says he would love to be able to find a local source for the seeds and Wisconsin farmers are itching to supply the product.

The Wisconsin Farmers Union has supported the hemp-farming movement for years, says Darin Von Ruden, the group’s president. With the decline in tobacco sales and the statewide smoking ban taking effect July 5, farmers want as many crop options as possible, he says.

“We want an alternative revenue source,” Von Ruden says. “To be able to grow hemp is a change in policy we push for and support.”

Though hemp has been illegal to grow without a permit from the U.S. Drug Enforcement Adminstration since the 1970s, remnants of Wisconsin’s dominance of the hemp market can still be found growing alongside country roads and highways across the state.

“Older farmers know what it is when they see it growing in ditches next to their fields,” says Sgt. Gordy Disch with the Dane County Sheriff’s Office, Division of Narcotics. “That’s where hemp got the name ditch weed.”

The uncultivated ditch weed that now grows in the wild was purposefully introduced to Wisconsin soil in 1908 when a few acres were cultivated as an experiment at the state asylum, now the Mendota Mental Health Institution, in Dane County, and the state prison in Waupun. By 1914, the limited amount of hemp that was being grown wasn’t enough to supply the country’s need for coarse threads and other rope products. With the onset of World War I, hemp imports also fell off.

That same year, the University of Wisconsin began encouraging farmers in Alto, Brandon and Waupun to grow hemp. Matt Rens was among them. He planted his first hemp crop along Wisconsin 19 between Brandon and Waupun. A year later, the Matt Rens Hemp Co. was created, opening the state’s first hemp mill outside Waupun.

At the height of the state’s hemp production in the 1930s and 1940s, Dodge, Fond du Lac and Green Lake counties produced 70 percent of the country’s total hemp crop, according to the Wisconsin Historical Society.

Hemp production continued strong through the start of World War II. When the fighting came to an end, the world’s largest hemp producers, including China, again began to dominate the market, not only with hemp, but with cheaper, synthetic fibers.

Though still a boy at the time, Dennis Rens remembers seeing his family’s hemp lose its value. By the time they grew their last crop in 1957, it had become so difficult to sell the hemp seeds that his uncle had to degerminate them and sell them as bird seed. That change decreased the price of the seed from $10 to $2 a barrel. The mill closed in 1959.

“By that time we started getting into the marijuana issue,” Rens says. “And that was it.”

Not much more than a decade later, growing hemp became illegal.

The Controlled Substances Act of 1970 classified all plants with any detectable level of THC as belonging to the plant family Cannabis sativa L. This designation created a legal union between hemp and marijuana that lawmakers like Baldwin are trying to undo.

“At a time when family farmers and manufacturers are struggling to recover from the recession, enacting this legislation is a no-brainer,” Baldwin says in a statement.

For the past three sessions of Congress, Baldwin has joined a short but growing list of Democrats in co-sponsoring Texas Republican Ron Paul’s Industrial Hemp Farming Act. The bill classifies industrial hemp as any plant variety of cannabis with a THC concentration that does not exceed 0.3 percent. Marijuana is typically cultivated by growers to have THC levels of between 10 and 22 percent.

“It’s one of the simplest pieces of legislation ever,” says Tom Murphy, the national outreach coordinator for Vote Hemp, a national advocacy group. “It defines industrial hemp, excludes it from the definition of marijuana under the Controlled Substances Act, and lets the states regulate how hemp is grown and processed.”

Since 1998, nine states have legalized hemp farming; North Dakota was the first. That state’s farmers soon learned they wouldn’t be able to grow hemp, despite the state’s law, without a DEA permit. One farmer, Wayne Hauge, tried to get his by suing the government but a judge recently dismissed his case, telling him to lobby Congress instead.

“We thought it would work like it worked in Canada … smoothly,” says Hauge, who filed suit in 2007 after being denied a federal permit to grow hemp. “Nobody expected so much opposition from the DEA.”

In Wisconsin, Molepske says passage of his hemp-farming bill would show solidarity with the 25 other states that have either legalized hemp, established committees to study its market viability or passed resolutions urging Congress and the DEA to act on the issue; this, in turn, would help put pressure on the federal government to change its guidelines. Another factor boding well for the cause, says Molepske, is the growing number of states, now up to 14, that are allowing marijuana to be grown for medicinal purposes.

“If we passed these bills, we would be putting pressure on the feds to loosen up the reins, especially with the direction medical marijuana is taking,” Molepske says. “What could be the problem with growing hemp? You can’t even smoke it.”

Molepske concedes that his bill, which is in the Assembly Agriculture Committee, has little chance of passage before the end of the legislative session next month. While farmers support the effort, law enforcement, the state Controlled Substances Board and the state Department of Justice have voiced opposition.

Another strike against it is cost.

The state Department of Agriculture, Trade and Consumer Protection estimates in the bill’s fiscal note that it would cost $233,000 for the department to modify its database to include hemp-growing farmers, test the THC levels of seeds, and hire staff to oversee the hemp farms. The department based its estimate on the number of farmers growing hemp in Canada, determining that if hemp farming was legal in Wisconsin, roughly 30 farmers would plant 50 acres of hemp.

Molepske says the estimate is “not logical,” adding there would be no immediate fiscal impact until federal law is changed. “The fiscal note on this should be zero,” he says. “I’m disappointed DATCP can’t get its act together.”

Botanists and plant geneticists are quick to point out the chemical differences between hemp and marijuana. Yet state and federal laws classify both plants, despite their vastly different THC levels, in the most stringent category of controlled substances, a group that also includes heroin. Consequently, any plant with THC cannot be possessed, grown or transported in the state. This is an obvious roadblock for hemp farming and the main reason some in the law enforcement and criminal justice communities oppose hemp-farming legislation.

“In Wisconsin, our (drug) laws echo the federal Controlled Substances Act, and the federal act makes no distinction between hemp and marijuana,” says Darold Treffert, a psychiatrist and chair of the state’s Controlled Substances Board, which is opposed to Molepske’s bill. “Cannabis, is cannabis, is cannabis.”

Since state law does not distinguish between the THC levels of plants, neither do state crime labs. The labs simply test for the presence of THC and do not determine the exact amount.

“The analysis of marijuana is generally not a difficult thing to do,” says Robert Block, a controlled substance analyst with the State Crime Lab in Madison. “The concern is that adding a quantitation (or THC-level determination) to every sample of marijuana analyzed would add considerable time to the overall analysis.”

In short, it would take longer and likely cost more for the state to analyze samples for a specific THC level.

While state and federal laws and crime labs do not distinguish between hemp and marijuana plants, officers in the field do. And they’re increasingly leaving it alone where it grows.

In 2005, the DEA – the same agency that will not permit hemp growing – ceased reimbursing local law enforcement for ditch weed eradication efforts. Consequently, Wisconsin police went from collecting roughly 925,600 plants in 2003 to 31,380 in 2006, according to the state Department of Justice. In 2007, the state quit keeping track entirely.

“The DEA isn’t focused on it because it’s poor-quality weed,” says David Spakowitz, director of field operations for the state Department of Justice. “Neither are we. We’re focused on higher-quality marijuana because it is more likely to draw criminal activity. If you have headache-quality weed or marijuana with a THC level of 10 percent, people are going to go for the higher-quality product.”

He admits there will always be teens driving around looking for what they think will be a good, free high. A field of hemp would be a logical target, he says.

Disch, with Dane County’s narcotics division, says officers broke up a group of teens harvesting ditch weed a few years ago in a town of Middleton park. A chemical test performed by the officers at the scene did not provide a presumptive positive for any THC level. Consequently, the teens were let go with a verbal warning, not a ticket. He says this is a rare occurrence.

“Rarely do we find people dumb enough to smoke ditch weed,” he says.

Though ditch weed smokers appear to be few and far between, the Wisconsin Sheriff’s and Deputy Sheriff’s Association is opposed to Garthwaite’s bill to study the hemp market and Molepske’s bill to permit the growing of hemp.

There does seem to be some wiggle room with the opposition. Block and Treffert cite a bill similar to Molepske’s that is under consideration in Missouri. The bill would shift the burden of proof for determining if a plant is hemp or marijuana from the state to the individual caught with the goods.

“If the DEA revised its position and would issue some permits to grow hemp, then we would not be opposed to that (hemp farming) if the burden of proof was changed in the state bill,” Treffert says. “But so long as the federal government continues to lump rope and dope – hemp and marijuana – together, we are bound by that.”

Earlier this year, Dane County Board Supervisor Kyle Richmond suggested that the county lobby in favor of any hemp-growing legislation. As chair of the county’s Environment, Agriculture and Natural Resources Committee, Richmond says it is a practice the county has supported for years. Hemp is an economically and ecologically viable crop, he says.

“We are handicapping ourselves and our farmers, and losing global market influence by not diversifying the crops our farmers can grow,” Richmond says. “We are allowing entrepreneurs in China to do what we can’t do in Dane County,” he adds, “all because of extremely old laws and standards that aren’t supported by science. Hemp and marijuana are not the same.”

Rich Ray, the owner of Hempen Goods on Williamson Street in Madison, was driven to open his store 12 years ago, in part, to educate people on that distinction. Now he’s dismayed that while his customers are local and many want locally produced goods, his products are not.

All the items in his store come from one of the world’s leading producers of hemp: China. He says he would gladly stop importing hemp products from China if hemp were grown locally.

“I started (the business) to promote the eco-friendly aspects of the plant,” Ray says. “But it is a real handicap for me now.”  By JESSICA VANEGEREN.

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