With a court decision last week allowing the sale of foods made with hemp, makers of the natural food products are poised for big growth in a nascent industry.
"We're jazzed," said John Roulac, president and founder of hemp food maker Nutiva. For the past two years, many retailers have been hesitant to market a range of products from protein powders to bread, for fear of a government crackdown.
But late last week a federal appeals court ruled that the Drug Enforcement Administration cannot prevent sales of hemp foods, dismissing the government's argument that it has the right to regulate food that contains traces of tetrahydrocannibinol (THC). THC is the compound that gives marijuana its psychoactive effects and is a Schedule I substance under the Controlled Substances Act, thus illegal for consumption.
"It clears up the confusion in the marketplace so retailers and distributors have more confidence to purchase our product," Roulac said.
The court said hemp seeds and oil used in food were naturally occurring and weren't considered marijuana, and as such fell outside the definition of a Schedule I drug.
Moreover, the court concluded, the DEA tried to change the definition of THC to include food products without following precise federal requirements for reclassifying a drug.
"The DEA has no authority to regulate drugs that are not scheduled, and it has not followed procedures required to schedule a substance," wrote Judge Betty Fletcher.
The plaintiffs -- a coalition of hemp product makers -- spent some $200,000 to bring the case through the federal courts.
"It's just common sense versus drug-war absurdity," said David Bronner, owner of Dr. Bronner's Magic Soaps, a California company that makes hemp-based beauty products and recently launched a line of hemp nutrition bars. "The DEA's been out there harassing the marketplace."
Hemp, its advocates point out, is a cheap and healthy source of protein, fiber and the omega-3 fatty acids of which nutritionists have become so fond in recent years. Its seeds and oil can be turned into a range of products, anything from nutrition bars to shampoo.
Of course, it happens to be the same species as the tall, stalky plant that can produce marijuana from its buds -- and the DEA has tried for at least the past two years to bar the sale of food products on the grounds that trace amounts of THC can sometimes be found in them.
Though THC can remain in the body for long periods of time, one study concluded that a high-calorie diet of only hemp foods still wouldn't leave enough of the potent chemical to cause a positive result on a drug test.
The DEA said it was still reviewing the court's ruling, and had not decided whether to continue fighting to enact the rules. "It's still a little too soon," said spokesman Ed Childress.
Next stepsBecause a panel of three judges heard the case, the government could ask the full 9th Circuit to review the decision or it could appeal the case to the Supreme Court. It might also try to rewrite the rules to address the issues raised by the judges.
And the court's decision is not the first in the case. In June 2003, it granted hemp advocates' request to suspend a 2001 preliminary rule written by the DEA while the case was heard. The most recent ruling, released Friday, voided the agency's final rule, which was released in March 2003.
Hemp advocates believe it is unlikely the DEA will appeal, in large part because the judges' decision was unanimous and one judge on the panel, Reagan appointee Alex Kozinski, is a well-respected conservative jurist whose opinions hold sway even with conservative Supreme Court justices.
During a Sept. 17, 2003, hearing, Kozinski asked how the DEA's efforts would differ from an attempt to outlaw poppy-seed bagels. The seeds can contain trace amounts of opiates.
He also noted that Congress set very specific requirements on which parts of a hemp plant could be considered illegal. "It wasn't acting under the delusion that stalks and seeds don't contain any THC. They were aware that it did contain some. But, nevertheless, they exempted it," he told a DEA lawyer.
Hoping for growthThe market for hemp products is tiny, perhaps $8 to 10 million, and mostly limited to consumers of organic and natural foods. Some items, like Bronner's soaps or hemp lip balms, would have been largely unaffected by the proposed rule. But the court battle essentially froze the market for hemp foods, which the industry sees as a healthy vegetarian source of key nutrients.
Whole Foods, the nation's largest organic retailer, refused to sell hemp products unless manufacturers could guarantee they were completely THC-free, which would have exempted them from the DEA rule. Though the amounts of THC are miniscule, it is nearly impossible to completely remove it from natural hemp foods and cosmetics.
Whole Foods spokeswoman Kate Lowery said the company would review the ruling and might return hemp foods to the shelves if they comply with current laws. "There's some products out there that our customers are fond of," she said.
Bronner said his efforts to sell his new AlpSnack hemp bars through Amazon.com had been held up because a supplier wouldn't distribute them until the court case had been resolved.
Bronner intends to move forward with a new marketing push for his hemp bars, and will soon unveil new flavors like chocolate and coconut-mango-pineapple. "We're going full steam ahead," Bronner said.
John Roulac wants to go even further. He sees a strong market for his company's new hemp protein powder, and believes that financial success in the industry would get officials to further ease restrictions on hemp, especially as most raw hemp must currently be imported from Canadian farmers.
"That’s one thing to say when it’s a guy in a Grateful Dead shirt outside a concert," Roulac said. "It's another thing when there's hundreds of millions of dollars in sales."