DEA RULE BANS HEMP FOOD PRODUCTS

On Feb. 6, it will be illegal to sell or import hemp-containing foods,
under a new rule of the U.S. Drug Enforcement Administration (DEA).
The DEA says it is interpreting and enforcing an existing rule, which
doesn't require formal rule-making procedures. But critics charge that
the agency is simultaneously soliciting comments for a new rule with
the same wording and effect. It published the rule in the Federal
Register Oct. 9.

The foods are being banned for import or sale because they contain
traces of THC, the primary active constituent of marijuana. DEA
Administrator Asa Hutchinson has also said that "many Americans do not
know that hemp and marijuana are both parts of the same plant and that
hemp cannot be produced without producing marijuana," according to a
DEA statement.

Several hemp food products manufacturers and the Hemp Industry
Association, their trade group, have asked the 9th U.S. Circuit Court
of Appeals for an emergency stay of the enforcement of the rule. They
also seek formal review of the rule (66 Fed. Reg. 51530 et. seq.).

Federal appeals courts are the designated forum for challenging agency
rule-making actions. The DEA has given the manufacturers and retailers
of consumable hemp products until Feb. 6 to dispose of their inventory
- -- a situation which they assert will ruin their businesses. They say
that their products are no more harmful than poppy seed bagels, which
contain tiny trace amounts of opiate compounds, or fruit juices, which
contain traces of alcohol.

Products on the market that the DEA says are affected by the action
include some beers, cheeses, coffees, corn chips, energy drinks,
flours, ice creams, snack bars, salad oils, sodas and veggie burgers.
Manufacturers say that there is no measurable THC content in these
foods under tests available when Congress passed the Controlled
Substances Act. The suppliers say that hemp is used in food products
because the seeds are a high-quality source of protein, and the hemp
seed oil contains a variety of heart-healthy essential fatty acids not
found in other food products.

The DEA describes the rule as an interpretation of that statute and of
DEA regulations, which under the Administrative Procedures Act (APA),
require no formal rule-making procedures.

VERDICT BEFORE TRIAL?

"It's like the judge announcing the verdict before the trial," says
John H. Young of Washington, D.C.'s Sandler Young, representing a
group of U.S. and Canadian companies making and selling hemp food
products as petitioners with his partner Joseph E. Sandler and solo
practitioner Patrick Goggin as local counsel. Sandler says that under
the APA statute, the rule is clearly substantive in nature, a
categorization that requires a formal rule-making hearing, or else
notice to the public and an opportunity for comment. Petitioners
charge that the DEA is avoiding the proper regulatory procedures by
issuing the dual rule.

A DEA spokesperson declined to comment, deferring to the press
advisory statement posted at the DEA Web site, at www.dea.gov. The
comment period for the immediate proposed rule ends Dec. 10.

A 1998 seizure of hemp birdseed led to more than two years of
extensive interagency tussles, in which certain factions argued for
conformity with international trade standards on hemp, and other
agencies insisted on a zero threshold level.

In November 2000, DEA announced its plans to publish more restrictive
rules. Those rules, published Oct. 9, ban the sale or importation of
hemp products that "enter the human body" because the DEA says the
products contain THC traces. Sandler says Congress never intended to
apply bans on hemp products to microscopic traces detectable by modern
analytical methods. He noted that poppy seeds are exempted from the
Controlled Substances Act even though they contain trace opiates, and
that fruit juice has trace amounts of natural alcohol through
fermentation but is not subject to liquor laws.

Apart from trying to stop imposition of the DEA rule, David C.
Frankel, a San Francisco attorney and Hemp Industries Association
board member, said the trade association members are "looking to work
with DEA to set up protocols that do not interfere with legitimate law
enforcement without forcing our products off the shelves."

The Family Research Council, a Washington, D.C.-based conservative
advocacy organization, has submitted papers in support of the DEA
rules. Robert Maginnis, the council's vice president for policy, said
that the hemp issue is being used to camouflage a marijuana
decriminalization legalization agenda, and that there are ample
substitutes for hemp products. Maginnis says that legalization of hemp
products sends a pro-drug message to children.

On Nov. 8, Rose A. Briceno, and Wayne Raabe, senior trial attorneys
with the DOJ's Narcotic and Dangerous Drug Section, filed an
opposition motion to the request for an emergency stay. Petitioners
filed a reply to the opposition brief Nov. 15.