HEMP FIRM FEARS U.S. IMPORT BAN

A Manitoba-based hemp company is worried it may be effectively shut down if
a proposal by the American Drug Enforcement Agency gains any more momentum.

"You're talking about a pretty formidable foe to go up against," Shaun
Crew, president of Hemp Oil Canada Inc., said this week. In 1998, the
provincial government changed regulations to allow those who wanted to grow
industrial hemp in Manitoba to do so, under strict guidelines and with a
permit.

Crew established his hemp food processing company in Ste. Agathe the same
year, and exports up to 80% of his oil and seed products to the U.S.

While hemp is used to make everything from clothing to paper to lip balm
and coffee, it's running into some problems south of the border, thanks to
its criminal cousin -- marijuana.

THC is the active ingredient in marijuana that creates the "high," and
makes it an illegal drug. Because hemp is derived from the same type of
plant, its products also contain a trace amount of THC.

But the U.S. has a "zero tolerance policy on THC," said Brian Wilson,
Manitoba Agriculture and Food's crop diversification manager, adding the
DEA is pushing to have all products with any THC content banned from import
into the U.S.

That means products like Crew's would not be allowed into the country.

COMPETITIVE ADVANTAGE

The DEA is worried those who ingest hemp products may test positive for drugs.

"It just doesn't happen. There isn't a chance that someone would fail a
test," said Crew. "If they shut the border down on us, that's a huge
market. To the U.S., hemp is marijuana and marijuana is hemp. They've kind
of still got their heads stuck in the sand."

Wilson said hemp is a very new crop in Manitoba, and this province has a
competitive advantage because of its liberal legislation.

He worries such a lucrative new crop may have trouble establishing itself
if Canada's largest trading partner closes off its borders.

"It's a young industry, but it does have a lot of potential," Wilson said.
"We depend, in agriculture, very much on export markets ­ we don't have a
large population base in Canada. If the U.S. does something to restrict our
access to the market it disrupts our economy very, very much."

Crew said he expects to learn more about the DEA proposal in the next
couple of weeks. If he has to, he said he'll file a complaint under the
North American Free Trade Agreement, or NAFTA.

Until then he'll keep lobbying, along with several other groups in the
States, to have the separation of marijuana and hemp recognized. "It's a
lot of power to fight, but we've got a lot of friends, so here's to hoping
they don't get away with this."