U.S. HALTS ONTARIO HEMP AT BORDER

The U.S. Drug Enforcement Agency has delivered a body blow to Ontario's
fledgling hemp industry, stopping a shipment of hemp products to the U.S.
and ordering the processor to recall 17 other tractor-trailer loads.

Jean Laprise, president of Kenex Ltd., said his Chatham-Kent company now
faces more than $700,000 in penalties and has lost the major market for its
products.

"It's not just us. It will seriously affect several Canadian operations,"
Laprise said yesterday.

Laprise said he also expects several U.S. customers will be forced out of
business because they won't be able to get supplies from Canada. Many have
poured money into developing and marketing hemp products.

Hemp production is legal in Canada, but banned in the U.S., although the
U.S. imports hemp products from other countries. Several U.S. farm groups
are now suing their government over the ban.

Hemp is used in a wide variety of products, including textiles, automotive
parts and edible oils.

Kenex Ltd. is one of two Southwestern Ontario companies that contract with
farmers to grow hemp. The other is Middlesex-based Hempline Inc., which has
a processing plant in Delaware.

Laprise said Kenex has not broken any rules and filed an objection
yesterday under the Free Trade Agreement. The U.S. Drug Enforcement Agency
isn't following the rules, he said.

Ontario Agriculture Minister Ernie Hardeman said he has asked the federal
government to take quick action to deal with the Kenex situation.

"We hope the federal government will get on it," he said.

Production of hemp in Ontario has been supported by the provincial
government with grants to get the industry going.

"We have an interest in making sure that industry succeeds," said Hardeman.

Laprise said most of the hemp products shipped to the U.S. were bird seed
containing hemp seed. The DEA objected, saying the material was banned
because it contained THC, the psychoactive material found in marijuana, a
relative of hemp.

Laprise said Kenex had the material tested in Canadian labs, proving that
the THC content was only 14 parts per million, but the Americans refused to
accept the results.

Geoffrey Kime of Hempline said his company also depends heavily on the U.S.
market, but hasn't had any difficulty shipping fibre to the U.S. The
problems facing Kenex show there is still some misunderstanding about hemp,
Kime said.

Laprise said Kenex can't pay the $700,000 in penalties imposed by the DEA.
Jobs at Kenex are also in jeopardy.

"Twenty people are working here. Those jobs didn't exist a year and a half
ago," said Laprise. "We were hoping to add another 10 jobs, not take away
10 or 20 jobs."