DEA RULING PUTS HEMP FOODS ON THE ROPES

Foods that contain hemp may be prohibited if a recent ruling by the U.S.
Drug Enforcement Administration goes into effect later this month.

The DEA decided in March to prohibit foods that contain traces of a
substance called tetrahydrocannabinols, or THC. The psychoactive substance
is found in marijuana, and a small amount is found in industrial hemp,
though not enough to produce a high.

It is illegal to grow hemp in the United States, but it is legally
imported, usually from Canada, and used for a variety of purposes -- rope,
clothing, paper, even food. Under the DEA's new ruling, though, consumption
would be prohibited.

The agency set an April 21 deadline for businesses to comply. But the move
could have a negative effect on companies making hemp food products and
retailers selling them.

Nature's Path, whose Blaine manufacturing plant produces hemp granola,
could lose about 3 percent of its sales, which would amount to millions of
dollars, said David Neuman, vice president of sales and marketing.

Following the DEA's announcement last month, Nature's Path cut production
of its hemp granola by half. The company could continue to sell the
products in Canada, where it is based, after the April 21 deadline. But it
might not be able to ship hemp across the border to Blaine for production,
Neuman said.

The DEA's ruling comes as sales of Nature's Path hemp food have increased
about 20 percent in the past year, Neuman said.

"If the customer didn't want it, we wouldn't make it," he said.

This isn't the first time the government has addressed consumption of hemp.

The DEA issued an earlier ruling in October 2001 prohibiting foods
containing THC, but the courts issued a stay a few months later allowing
companies to continue making and selling hemp foods. Several businesses,
including Nature's Path, filed a brief last week asking the court to step
in again before the April 21 deadline.

The hemp food industry sees about $6 million in annual sales, said David
Bronner, chairman of the Hemp Industry Association's food and oil
committee. It could be much larger, he said, if the government eased
restrictions that have made mainstream companies reluctant to sell hemp
food products.

"We feel that this is really the final battle," he said "If we can get
through this one, it'll open up in a big way."

Hemp, which can be eaten as a nut or oil, is high in essential fatty acids
and fiber. Those in the industry say that it's virtually impossible to get
a high from eating hemp, likening it to eating poppy seeds.

But hemp can contain traces of THC. The government classifies THC -- a
controlled substance that has not been approved as medicine by the Food and
Drug Administration -- in the same category as heroin, LSD and marijuana.
Its consumption would then be illegal.

The DEA's recent ruling exempts products that may contain hemp but are not
intended to enter the human body, such as rope, clothing, soaps and animal
feed.

Nature's Path already tests for THC in its hemp granola and waffles. But
the government has warned the company that its more sophisticated tests
might be able to find smaller traces of the substance in the food, Neuman
said. That could make some retailers more hesitant to carry the products,
he said.

At PCC Natural Markets, which operates seven grocery stores in the Seattle
area, hemp foods weren't selling well before the DEA issued its first
ruling in 2001, grocery merchandiser Stephanie Steiner said. When the court
stay allowed grocery stores to continue selling the products, PCC Natural
Markets decided not to bring them back based on their previous sales
performance, she said.

Trader Joe's grocery stores, which carry hemp granola made by Nature's
Path, plans to keep the product on store shelves. The company has asked
Nature's Path to verify that its product does not contain traceable levels
of THC, said Jon Basalone, vice president of merchandizing.

"You just do what you have to do to meet the guidelines," he said. "But it
wouldn't make us shy away from any new products as long as they fit the
guidelines."

At Scientific Nature Hemp Emporium in Bellingham, hemp foods make up about
5 percent of the product line. Though her business could survive without
them, owner Pattie Nelsonbloch said she would be disappointed if she had to
stop selling them.