HEMP SEED BACK ON US HIT LIST

The office of the United States drug czar has thrown more uncertainty into
the business plans of Canadian hemp processing companies.

On Dec. 30, the Office of the National Drug Control Policy instructed U.S.
customs officials to start seizing hemp seed and products that contain any
amount of tetrahydrocannabinol (THC).

"We thought we were kind of past all this," said Shaun Crew, president of
Hemp Oil Canada in Ste. Agathe, Man.

It's the second time the U.S. government has stirred up confusion in the
young industry. In August, American customs officials seized a truckload of
hemp birdseed in Windsor, Ont., sparking a three-month-long trade argument,
which was resolved in late November.

But now, the U.S. drug office has overturned a policy that allowed
industrial hemp seed products to cross the border. The director of the
office is Barry McCaffrey, a member of the president's cabinet.

According to a memo sent to U.S. Customs, the office and the U.S. Drug
Enforcement Administration are reviewing the hemp import policy to make sure
it's consistent with the U.S. national drug control strategy.

"This is a political kind of situation related to U.S. drug policy," said
Ron Krystynak, deputy director for Canada-U.S. trade issues in Agriculture
Canada's international trade policy directorate.

Hemp processors have continued to ship their goods. As of Jan. 12, Krystynak
was not aware of any border delays or problems.

He expected U.S. Customs would soon issue more detailed instructions to its
staff about how to handle hemp.

If U.S. Customs accepts Canadian declarations that products contain no
detectable levels of THC, a lot of the cross-border trade could continue,
said Krystynak. But if U.S. Customs decides to test each shipment at the
border, trade would be disrupted, he added.

Canadian regulations allow no more than 10 parts per million of THC in food
products such as hemp processed goods. The hemp plants in Canadian fields
contain no more than 3,000 parts per million, a level so low it cannot
produce the euphoric effects associated with the plant's illegal cousin,
marijuana.

According to processors, standard tests can't consistently detect very low
levels of THC below four parts per million. Hemp Oil Canada's hemp oil
contains seven parts per million THC, and the other products have less than
two parts per million.

Last week, Crew sent two small shipments to U.S. customers to see what would
happen at the border. Two weeks ago, one shipment was briefly stopped for
inspection.

More than 85 percent of Crew's production of hulled seed, oil and roasted
seed moves in bulk shipments south across the border.

"Without a U.S. market, it's going to be tough," he said.

Crew hopes to find ways to minimize THC levels in food products.