HEMP BEER ADS LEAD TO LAWSUIT BY BREWER

Ketchum Advertising of Pittsburgh thought it had some clever ideas last
summer when it unveiled a light-hearted ad campaign linking Kentucky Hemp
Beer to illegal marijuana use, with psychedelic patterns and naughty
messages like “Undetectable to police dogs.”

But Kentucky Hemp Beer -- owned by Lexington Brewing Co. – wasn’t laughing,
especially after stories about the ads appeared in publications including
The Wall Street Journal, The (Louisville) Courier-Journal and Ad Age magazine.

In a lawsuit filed May 28 in U.S. District Court, the local brewer said
Ketchum Advertising never had its permission to create the promotional
campaign in the first place, much less to publicize the ads – which
prompted criticism of the beer company -- on a national level.

Kentucky Hemp Beer is suing the agency and its parent company, Omnicom
Group Inc. of New York, for $1 million in lost sales and another $1 million
in punitive damages.

Kentucky Hemp Beer President Mike Hart and his attorney declined to discuss
the suit yesterday. But several other people in the hemp industry said
pro-hemp activists have labored for years to distinguish the useful fiber
from the marijuana plant, and ads that linked the two could damage all
hemp-related businesses.

The ads “were really irresponsible and offensive. Nobody that I know in the
agricultural end of the hemp industry wants anything to do with the
legalization of marijuana,” said Joe Hickey, executive director of the
Kentucky Hemp Growers Cooperative Association.

Marjorie McGinnis, president of a Frederick, Md., company that brews Hempen
Ale and Hempen Gold, added: “We absolutely do not promote the use of
illicit drugs. We have to sell our beer to distributors ... and for our
credibility, we stay as far away from marijuana as we can.”

Adding hemp to beer gives it a creamy, smooth body, but it doesn’t give
drinkers any more of a buzz than regular beer, McGinnis said.

David Egan, president of Ketchum Advertising, said yesterday he could not
comment because the agency’s attorneys are preparing a response to the suit.

A July 15, 1998, story in The Wall Street Journal credited the agency’s
executive creative director, Lee St. James, with dreaming up the publicity
campaign on an unsolicited basis and showing it to Kentucky Hemp Beer
later, in an effort to win an account from the brewer.

“If you can’t do fun ads for a product made out of marijuana seeds, what
can you do?” St. James told the newspaper.

St. James printed 1,500 poster ads but distributed only a few of them,
according to the article.

To understand Kentucky Hemp Beer’s concern about the pot-smoking imagery,
it should be noted that hemp and marijuana are produced by two separate,
although similar, versions of the same plant. Hemp contains less than 1
percent of the psychoactive chemical tetrahydrocannabinol, or THC, while
marijuana contains up to 20 percent THC.

The tall, cane-like hemp plant once was grown widely in the United States,
and particularly in Kentucky, and its tough fibers were used for products
like rope, paper and clothing. But in 1937, the federal government – hoping
to eliminate marijuana -- began to enact laws restricting most types of
cannabis growth and trade.

Today, it’s illegal to grow hemp in the United States. Hemp-related
products sold in this country are made from fibers or seeds grown in other
nations such as Canada.