HEMP TAKES A HIT

The Feds Just Might Drive This Growing Industry Out Of Its Head.

Five years ago, vocal hemp supporters Kathleen Chippi and David Almquist
put their money where their mouths were by opening the Boulder Hemp
Company. The pair's activism by way of commerce has since produced a line
of cookies, snacks and baking mixes made with hemp flour, which they grind
from hemp seeds shipped in from around the globe. In March the company went
national with four flavors of Heavenly Hemp Tortilla Chips. Made with 30
percent hemp flour, the chips are a big hit in stores around the country,
including Alfalfa's and Wild Oats.

But Chippi and Almquist's struggle to meet consumer demand has been nothing
compared to their battle with more formidable foes: the U.S. Customs
Service, the Drug Enforcement Administration and the nation's "drug czar,"
retired four-star Army general Barry McCaffrey. This coalition has deemed
that sterilized industrial-hemp seeds -- which have been legally shipped
into the United States for decades -- are a threat to public safety. In
early January, McCaffrey, who heads the Office of National Drug Control
Policy, implemented a zero-tolerance policy for trace amounts of THC in
hemp seeds.

The stance is rocking the burgeoning U.S. hemp trade, and the grain that
keeps the Boulder Hemp Company rolling is in jeopardy. Chippi and Almquist
now wonder if the five years and half a million dollars they invested in
their venture may soon go up in a cloud of THC-free smoke.

"How in the hell can the DEA do this?" Chippi asks. "Since when did they
start making federal policy? How would the farmers feel if all a sudden the
DEA decided corn was illegal?"

Das Agua has a similar question. His Boulder-based Original Sources was the
nation's first commercial processor of hemp seeds for hemp oil, and he's
been a leader in the hemp trade since 1991. Agua has also turned activism
(he once drove a tractor powered by hemp fuel around the State Capitol)
into a thriving little operation that makes a brand of ice cream called
Hemp I Scream! from hemp-seed milk. He calls it his "golden goose," but the
business may lay an egg if the current situation continues.

"Every attorney and legislator I've talked to on this is appalled by the
DEA action," Agua says.

The buzz-kill began last August when a shipment of sterilized Canadian hemp
seeds (U.S. law requires imported hemp seeds to be sterile -- unable to
germinate) was seized at a U.S. Customs Service checkpoint in Detroit. Why?
The seeds contained .00148 percent THC from plant residue that sometimes
clings to the processed seeds. (The hulls of these seeds also contain a
small amount of THC that is typically removed in processing.) But these
small amounts are nothing new in industrial-hemp products and have been
permitted in the United States for years. In fact, hemp seeds have been a
staple in birdseed since the 1930s.

Canada's Kenex Company, which had shipped the seeds, was threatened by the
DEA with the loss of the truckload and fines of several hundred thousand
dollars. It was also asked to retrieve a number of other shipments already
in the United States. None of this made sense to Kenex founder Jean
Kaprise. His company is a rising star in Canada's growing industrial-hemp
industry, a trade that's legal in more than thirty countries, including
every G-8 nation except the United States. Kaprise says his company had had
no trouble with similar shipments in the past.

And the amount of THC in the seized shipment was hardly a threat to public
safety. "A person would have to consume 2,500 pounds of the seed to get any
effect, and you'd have to do that in the same amount of time that you'd
smoke a joint. It would be physically impossible," Kaprise says, adding
that he's never stoked a spliff in his life.

After sitting on the seeds for a few months, Customs changed its mind. In
November the agency released the product to Kenex and dropped all charges.
In fact, Customs then issued new guidelines for THC, actually increasing
the accepted level from .1 percent to .3 percent. Hemp producers assumed
the status quo had returned.

But on January 5, McCaffrey's ONDCP ordered DEA and Customs to revoke the
.3 percent standard and embrace a zero-tolerance position. Hemp shipments
with any amount of THC were now subject to seizure.

Only in recent history has the hemp plant -- cannabis sativa -- been the
target of such legal scrutiny. Hemp historians say that for thousands of
years, the plant has been deemed a wonder crop by ancient civilizations.
Cultures old and new have used the seeds in food and the hemp stalk in
fabric, building materials and paper. The sails and ropes used by
Christopher Columbus were made of hemp, and George Washington touted hemp
as a miracle crop for early American farmers. The first drafts of the
Declaration of Independence and the U.S. Constitution were inked on hemp
paper. Along the way, of course, many people got stoned on cannabis. When
high-THC hemp found favor for its psychoactive properties in the early
1900s, images of addled stoners cast a shadow over industrial cannabis. In
the 1930s, Randolph Hearst's yellow presses and the U.S. government branded
cannabis a tool of the underground and undesirables. In 1937, marijuana
became illegal, and the U.S. hemp trade was cooked.

Laura Kriho, head of the Colorado Hemp Initiative Project, is working with
national pro-hemp groups to help return it to its legal status. She and her
peers tout the agricultural wonders of the cannabis plant, a
low-maintenance, high-yield grass that can grow to fifteen feet without the
eco-unfriendly practices of many crops; COHIP also helped lead the failed
campaigns to legalize hemp farming in Colorado in 1995, '96 and '97.

Kriho admits that the movement suffers from the tie-dye-and-patchouli-oil
stoner image, but she says that perception is no longer accurate. "People
who think that way should have gone down to the Colorado Farm Bureau
convention, like I did, where they voted in support of industrial hemp a
couple years ago. One guy there told me they wanted to have pot smokers
taken out and shot." But, she adds, "if it wasn't for the pot-smoking
hippies, nobody would even know what industrial hemp is to this day."

(Agua points out that no self-respecting pot smoker would dare pinch from
an industrial-hemp field or load a friend's bowl with the factory-grade
smoke: "People would say, 'This is bunk. You're not invited back to my
party if you bring something this awful again.'") That the industry is now
in the crosshairs of the drug czar is especially puzzling considering that
on December 14, 1999, the first U.S. hemp crop was planted in Hawaii, with
approval from the DEA. U.S. Senator Cynthia Thielen led the charge for
approval of Hawaii's hemp crop, which she sees as a valuable replacement
for her state's suffering sugarcane industry. She has protested McCaffrey's
actions and asked the U.S. Attorney General's Office to overturn his edict.
"I believe Mr. McCaffrey is misguided and is causing economic harm to
legitimate U.S. and foreign companies," she wrote in a January 14 missive
to Janet Reno. "Unfortunately, when he attacks industrial hemp as a 'drug,'
he loses credibility with respected citizens and government officials."

DEA spokeswoman Rogene Waite says her office is merely enforcing the policy
handed down by McCaffrey. The change came about when hemp seeds "went from
birdseed to human consumption," she says. "That's when people started
thinking about this seriously." There is still a provision that allows
companies to import hemp seeds that aren't THC-free if they register with
the DEA. (Waite knows of no companies that have done this, however, and
hemp people say the last such firm closed a year ago, after it was buried
in red tape.) To those unhappy with the DEA's enforcement efforts, she
says, "You don't pick the bone with the people enforcing the law. You go to
the people who make the law."

Some hemp-industry people speculate that McCaffrey may be worried about
another growing industry: urine testing. "I think the government is
concerned that people who eat hemp foods will have a law-abiding alibi if
they ever test positive for THC," Agua says. He may be correct. According
to Bob Weiner, a spokesman for McCaffrey, Americans snacking on hemp
tortilla chips "really would make drug testing difficult. One of the main
points our director made is that hemp foods are a threat to drug testing."
Weiner says the ONDCP wants the DEA and U.S. Customs to offer scientific
proof that hemp foods are not a threat to "enforcement, drug testing, drug
policy or health."

He adds that Customs officials had no right to determine what amount of THC
was acceptable. "There was no rational, scientific basis for the numbers in
their policy," he says. The agencies are now discussing the situation, but
Weiner has no idea when or if the zero-tolerance stance will be softened.

Candy Penn of the Hemp Industries Association says the urinalysis fear is
unfounded. "The problem is with the testing process," she says. "Everyone
knows there are trace amounts of THC on hemp seeds, but it's not a problem.
You eat poppy seeds on your bagel, but no one's accusing you of using
heroin." Chippi adds that the Boulder Hemp Company has conducted urinalysis
tests on its tortilla-chip customers and has found no trace of THC.

Since the January policy shift, Kaprise says his company has shipped a
small amount of product into the United States without any trouble. But
he's hardly confident this good fortune will last.

"In August I was a criminal. In December I was not. In January I'm illegal
again. It's a tough way to do business," he says, adding that Kenex is now
taking extra measures to get its seed as THC-free as possible.

In the meantime, Boulder Hemp is down to its last ton of seeds and flour,
which will last about a month. "Our concern," Chippi says, "is that the
companies in Canada can't guarantee zero-percent THC. And nobody is
ordering any seed because they're illegal again." She also suspects that
the strange beeps that now interrupt her phone conversations are evidence
of DEA wiretaps and says her company has been receiving untraceable hang-up
calls. She worries that DEA agents will arrive at her door and seize her
business. She recently flew to Washington, D.C., to get help from her
elected officials, and says she met with staffers in the offices of
Representative Mark Udall and Senators Wayne Allard and Ben Nighthorse
Campbell. The staffers were sympathetic to her plight and contacted the DEA
on her behalf, she says, but none have offered any information that would
give her and her partner peace of mind. "We have abided by the law hardcore
because, as a hemp company, we know we're going to be looked at and held
accountable for our actions," she says.

Ice-cream maker Agua is optimistic that justice will prevail: "We're gonna
win because we're not going to go away. We know that what we're doing is
right. It's right for the planet, it's right for business, and it's right
for farmers."