MANUFACTURERS OF HEMP FOODS GEAR UP FOR FIGHT

A bitter food fight has broken out between the U.S. government and
manufacturers of certain beers, bread, pretzels, cereals, granola bars and
butter-like spreads -- all containing the controversial ingredient hemp.

For years, health food manufacturers have touted the plant's seeds and oil
as something close to a miracle nutrient, high in vitamin E and essential
fatty acids, and richer in protein than meat and fish.

But the U.S. Drug Enforcement Administration says hemp is on a par with
marijuana, a controlled substance. Not only is hemp part of the same plant,
the DEA says, but it also contains small amounts of the psychoactive
substance found in marijuana.

The debate has landed before the U.S. 9th Circuit Court of Appeals in San
Francisco, which may determine as early as next month whether hemp foods
can continue to be sold.

The decision will have strong repercussions in California, home to more
hemp food manufacturers than any other state. Already, the issue has caused
rifts within the small but vocal $5 million industry, confusion among
retailers and anxiety among consumers who fear they may not be able to buy
products much longer.

"The United States is the only country that refuses to make a distinction
between industrial hemp and the marijuana drug," says David Bronner,
president of Escondido's Dr. Bronner's Magic Soap, which contains hemp oil,
and chairman of the Hemp Industry Association's food and oils committee.
"What the DEA is doing is ridiculous."

But DEA officials say they are merely interpreting existing drug laws, not
expanding them to encompass products once considered acceptable.

The ruckus started Oct. 9, when the DEA issued a new rule on industrial
hemp products in the Federal Register. The rule banned from food products
any hemp seed and oil containing any trace of tetrahydrocannabinol (THC),
the hallucinogenic substance found in marijuana. Manufacturers and
retailers initially were given until Feb. 6 to stop making and selling the
products, but that deadline was extended to March 18 to give the appellate
court time to rule. (Hemp clothing and cosmetics, such as Bronner's soap,
are exempt because they do not cause THC to enter the body.)

The Hemp Industry Association, an Occidental-based group representing hemp
product manufacturers, says studies have shown that the trace amounts of
THC in hemp foods cannot cause psycho-activity or result in a positive
urine test for marijuana, even when unrealistically high levels of hemp
seed and oil, which are used in food products, are consumed.

The amount of THC in industrial hemp oil, the association says, is 0.0005
percent; in shelled hemp seed, it is 0.00015 percent. In comparison, it's
about 10 percent in the illegal street drug, according to the association.

Hemp has been grown for at least 5,000 years in China for its health
properties, which include use as an anti-inflammatory, emollient and a
diuretic, according to the association. But hemp foods didn't start
appearing on U.S. store shelves until about 1992. Hemp seeds resemble
sesame seeds with a taste described as similar to pine nuts or sunflower
seeds. Some people, however, say certain hemp foods leave a strong,
medicinal-like aftertaste.

Manufacturers argue that their products are being singled out. Poppy-seed
bagels, they note, contain a trace amount of opiate from poppies.
Decaffeinated coffee contains a trace of caffeine. Nyquil lists alcohol as
its first ingredient. And kava kava, an herbal supplement, is used as a
mood-altering drink by Pacific Islanders and has been linked to liver
toxicity cases in some European countries.

But Congress exempted poppy seeds from substance-abuse laws in 1970. And
caffeine, alcohol and kava kava are not covered under the 1970 Controlled
Substances Act.

"The act doesn't just name marijuana. It also names THC. That is the key
difference," says DEA spokesman Will Glaspy.

In January, the Hemp Industry Association filed an appeal in federal court
to overturn the new DEA rule. Additionally, Kenex Ltd. of Canada, the
largest exporter of hemp seed to the United States, has filed a notice of
intent to sue the government under the North American Free Trade Agreement
for impeding its access to U.S. markets.

Although the DEA began studying hemp foods before George W. Bush took
office, some hemp proponents believe the timing of the new rule is not a
coincidence. A few have even accused the DEA of purposely waiting until
after Sept. 11 in hopes the new rule would be overlooked by a nation
preoccupied with terrorism, a charge the DEA calls preposterous.

Hemp products accounted for about $25 million in sales in 2000, mostly for
clothing and cosmetics. Only about 20 companies make hemp foods, but food
is considered the fastest-growing sector.

According to the DEA, hemp and marijuana are separate parts of the same
species of cannabis plant. The marijuana portions include the flowering
tops or buds, the leaves and the resin. The rest of the plant -- stalks and
sterilized seeds -- is hemp.

Though widely grown in much of the world, growing industrial hemp is
illegal in the United States, except in Hawaii, where it is being grown for
research purposes.

The hemp association, however, considers hemp and marijuana different
breeds because marijuana plants are bred for greater amounts of THC while
hemp is bred for significantly lower amounts.

Why not solve the dispute by eliminating all THC from industrial hemp used
in food? At least one hemp-foods maker says it has.

HempNut, Inc. of Santa Rosa, the largest importer of shelled hemp seeds in
the United States, says that since 1994 its seeds have contained no THC.
The company sells the seeds to other hemp-food companies and uses them in
its own line of cookies, butters, chips and other food products.

According to founder and president Richard Rose, the trace amount of THC in
industrial hemp is found in the resin, which is stuck to the outside of the
seed shell. Once the seeds are shelled, he says, the THC is removed, though
others say even shelled seeds contain trace amounts of THC.

"Frankly, we saw this coming a mile away," says Rose. "But everyone else
wanted to fight it because they're activists."

Rose, who thinks manufacturers should comply rather than fight the DEA,
worries that the industry's stance will lead to the downfall of the food
market. He says he has already lost brokers and distributors for some products.

But John Roulac, a plaintiff in the appeal and founder of Nutiva, a
Sebastopol company that makes hemp-food bars and hemp chips, says the
controversy has been a boon for business. His sales doubled in January from
December, and he expects them to double again this month.

"The whole DEA thing has been a blessing in disguise," he says.

There is a similar split among retailers.

Whole Foods, which sells about half a dozen brands of hemp-food products in
its 130 stores nationwide, has said it will no longer carry such products
without documentation from manufacturers that they meet DEA requirements.

But the five New Leaf markets in Santa Cruz County are considering a
petition drive against the DEA's action. "This is a thriving industry and
these products are good for people," says Nellie Donovan, Felton store manager.

Paul Magdaleno, a Santa Cruz musician, agrees. He regularly shops at the
New Leaf Market in Santa Cruz for hemp lip balm, hemp granola, hemp snack
bars and hemp ale. He enjoys the food products, adding that hemp is pretty
tasteless unless you bite down on a seed: "I just like the fact that these
products are made from something good."

Mercury News staff writer Ken McLaughlin contributed to this report.