RL32725
Hemp as an Agricultural Commodity
January 05, 2005
Download Locations
Summary
The terms "hemp" and "industrial hemp" refer to varieties of Cannabis sativa characterized by low levels of the primary psychoactive chemical (tetrahydrocannabinol, or THC) in their leaves and flowers. Farmers in more than 30 countries worldwide grow industrial hemp commercially for fiber, seed, and oil for use in a variety of industrial and consumer products, including food. Because of the psychoactive properties of some varieties of Cannabis (which can grow virtually anywhere in the United States), the federal government began to control production in the late 1930s, under the Marihuana Tax Act (50 Stat. 551). The intent of this act was to allow production for industrial use (which the government actively encouraged during World War II), while discouraging production for use as a psychotropic drug. Since 1970, the production of all varieties of Cannabis, regardless of THC content and intended use, has been tightly regulated under the Controlled Substances Act (21 U.S.C. ยงยง802 et seq.). As a result, all hemp or hemp-containing products sold in the United States must now be imported or manufactured from imported hemp. In the early 1990s there began a sustained resurgence of interest in the United States in allowing commercial cultivation of industrial hemp. Farmers in regions of the country that are highly dependent upon a single crop, such as tobacco or wheat, have shown interest in its potential as a high-value alternative crop, although the economic studies conducted so far paint a mixed profitability picture. Over the past decade, more than 25 states have passed laws calling for economic or production studies, although no federal legislation has been introduced to date. The Drug Enforcement Administration (DEA) reflects the current federal policy on industrial hemp. The DEA has been unwilling to grant licenses for growing small plots of hemp for research purposes (as authorized by some state laws), and it made an effort, beginning in 1999, to ban imports of hemp food products that could contain trace amounts of THC. DEA officials express the concern that commercial cultivation would increase the likelihood of covert production of high-THC marijuana, significantly complicate DEA's surveillance and enforcement activities, and send the wrong message to the American public concerning the government's position on drugs. In September 2004, the Administration let pass the final deadline to appeal a February 2004 federal court decision prohibiting the DEA from enforcing a ban on hemp imports. This news brightened the market outlook for the seven-year-old Canadian hemp industry, to which, in turn, U.S. hemp proponents have looked for signs to suggest whether a domestic industry would prosper or fail. This report will be updated if events warrant.
