CANADIAN HEMP FIRM FIGHTS DRUG LABEL

WASHINGTON - The war on drugs is about to become a trade dispute
between the U.S. and Canada.

A Canadian agricultural company that grows and sells what it terms
sterilized hemp seed that Americans use in bird feeders will try today
to convince U.S. officials that hemp is not marijuana -- and it will
use the North American Free Trade Agreement to argue the charge is a
misfire in the war on drugs.

Kenex Ltd. says the U.S. anti-drug campaign has gone too far by
targeting the hemp-based chips, pretzels, nutrition bars, clothing,
oil and seed products that in the past five years have found a market
in the U.S., becoming a $7 million annual industry.

A Kenex shipment of birdseed to a Baltimore client was confiscated,
leading company President Jean Laprise to sue the U.S. for $20 million
for alleged NAFTA violations.

"A few million dollars would not even begin to cover the cost of the
financial hardships Kenex has suffered through DEA's [Drug Enforcement
Administration] harassment of our business and the hemp food
marketplace in general," Laprise said.

The Bush administration announced in October a rule that would list
hemp products as controlled substances -- the same way marijuana is
classified. This month, the U.S. 9th Circuit Court of Appeals
temporarily blocked that rule, which was to take effect March 18.

Kenex lawyers will outline its suit today at a State Department
meeting with an array of federal agencies, from the DEA to Customs and
the U.S. trade representative.

President Bush's drug czar, John Walters, recently called hemp
products a Trojan horse for the movement to legalize drugs. "You
cannot pretend there is not a broader issue of legalization behind
this," he said.

Administration officials were not immediately available to comment on
today's meeting.

The Canadians will remind the feds hemp was once considered a
strategic asset. In World War II, the U.S. embarked on "Hemp for
Victory" campaign to make rope, tarps and parachutes -- just like the
chute former President George Bush used when he bailed out over the
South Pacific.