HEMP BAR COMPANY UNDER GUN FROM DEA

Sebastopol Firm Fighting Fed Order

A Sebastopol company must forfeit its inventory of hemp-based food products
after it was found to contain traces of the active ingredient in marijuana,
federal drug enforcement agents said Wednesday.

Sebastopol-based Nutiva says it was on the verge of runaway success with its
new hemp-seed-based nutrition bar, a rival for the likes of Powerbar and
other snack foods. It had hoped to capitalize on growing public interest in
the health benefits of hemp, driven in part by a burgeoning hemp products
industry that is largely based in Sonoma County.

But now the company is struggling to fend off the U.S. Drug Enforcement
Agency, which has recently focused on the growing trade in hemp seeds for
food and health products.

"This is coming right at a time when our sales are exploding," said John
Roulac, president of Nutiva. "You can't get high on hemp seeds. People are
buying our bar because it tastes great and because of the nutritional benefits."

The Nutiva bar is made in Canada using hemp seeds produced by Kenex Ltd., an
Ontario firm that bills itself as North America's leading supplier of
industrial hemp products.

On Aug. 9, a shipment of Kenex hemp goods was seized in Detroit by U.S.
Customs officials, who determined from shipping manifests that the goods did
not meet America's zero-tolerance policy for tetrahydrocannabinol, or THC,
the euphoria-producing active ingredient in marijuana, hemp's botanical cousin.

THC is a controlled substance under U.S. law and is not allowed in
commercial products.

The Kenex shipment contained less than 10 parts per million of THC, the
allowable limit under Canadian law and an amount the industry says could
never produce a marijuana-like "high." Nutiva, the broker and importer for
Kenex products in the western United States, says nutrition bars made from
Kenex seeds are the top-selling hemp-food product in America.

In addition to seizing the shipment, which was bound for other U.S.
customers, federal officials ordered Kenex to recall 17 earlier shipments of
hemp-seed products, including those marketed by Nutiva. The goods must be
returned to the Detroit customs office under penalty of a $500,000 fine and
possible criminal charges.

For decades, the DEA has allowed hemp seeds to be imported to the United
States as bird seed if shipments are sterilized so the seeds cannot be
germinated into a living plant. Bird breeders and owners have long used hemp
seeds as a health supplement for their pets.

Hemp seeds do not contain THC, but seeds often pick up the chemical after
coming in contact with leaves and stems during harvesting. Most industrial
hemp seed undergoes a rigorous cleaning and sterilization process to remove
remnants of THC.

But Canadian rules permit trace amounts of THC to remain on the seeds at the
time of sale, leading to the confusion that resulted in the action by DEA
and Customs.

Several companies that import hemp seeds from other suppliers said they've
experienced no problems at the U.S. border.

"I think we were just recently aware that the shipments that were coming
through did have THC," said John Holmes, supervisory special agent with U.S.
Customs in Detroit. "At this point, if the hemp seed has THC in it, then it
is not allowable into the United States. It is not permissible."

The action is baffling to Roulac and Kenex officials, who have been bringing
hemp seed into the United States for months without interruption.

"At this point the DEA has chosen to interpret the U.S. law a little
differently than it has in the past," said Jean Laprise, director of Kenex.
"It's basically crippled us. The majority of our business is in the U.S."

Hemp seed is rich in protein and Vitamin E. The shelled seeds are about the
size of sunflower seeds and taste similar. In addition to its nutrition
bars, Nutiva also markets raw hemp seed used in cooking. It supplies hemp
seed to 700 other businesses, including several restaurants in Sonoma County.

Candi Penn, a member of the board of directors of the Hemp Industry
Association, based in Occidental, said the DEA action against Kenex comes at
a critical time for the industry.

"These products are absolutely legal," said Penn, who noted that hemp has
grown to a $100 million industry this year, from just $5 million in 1993.
"It's a potential for jobs in America. It's baffling to see that they even
want to stop it. Federal rules are not keeping pace with reality."

Roulac said he is consulting an attorney as he decides how to respond to the
federal order. In the meantime, his products are staying put in his Southern
California warehouse.

"We are looking for another source of hemp seeds, but we could be
potentially liable," Roulac said. "We've been advised that they may be
charging us with importing a controlled substance."