rl32725 Hemp As An Agr Commodity

Hcmp as an Agricu!tura!
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RL32725
Hemp as an Agricultural Commodity

Congressional Research Service
5ummary
Industrial hemp is an agricultural commodity that is cultivated Ior use in the production oI a wide
range oI products, including Ioods and beverages, cosmetics and personal care products, and
nutritional supplements, as well as Iabrics and textiles, yarns and spun Iibers, paper, construction
and insulation materials, and other manuIactured goods. Hemp can be grown as a Iiber, seed, or
other dual-purpose crop. Some estimate that the global market Ior hemp consists oI more than
25,000 products. Precise data are not available on the size oI the U.S. market Ior hemp-based
products. Current industry estimates report that annual U.S. retail sales oI all hemp-based
products were $581 million in 2013.
Hemp is a variety oI Cannabis sativa and is oI the same plant species as marijuana. Although
industrial hemp is genetically diIIerent and distinguished by its use and chemical makeup, and
has long been cultivated Ior non-drug use in the production oI industrial and other goods, in the
United States, hemp is subject to U.S. drug laws and growing industrial hemp is restricted. Under
current U.S. drug policy all cannabis varieties, including industrial hemp, are considered
Schedule I controlled substances under the Controlled Substances Act (CSA, 21 U.S.C. 801 et
seq.; Title 21 CFR Part 1308.11). Despite these legitimate industrial uses, hemp production and
usage are controlled and regulated by the U.S. Drug EnIorcement Administration (DEA). Strictly
speaking, the CSA does not make growing hemp illegal; rather, it places strict controls on its
production and enIorces standards governing the security conditions under which the crop must
be grown, making it illegal to grow without a DEA permit. In other words, a grower needs to get
permission Irom the DEA to grow hemp or Iaces the possibility oI Iederal charges or property
conIiscation, regardless oI whether the grower has a state-issued permit. Currently, cannabis
varieties may be legitimately grown Ior research purposes only. No known active Iederal licenses
allow Ior hemp cultivation at this time. There is no large-scale commercial hemp production in
the United States, and the U.S. market is largely dependent on imports, both as Iinished hemp-
containing products and as ingredients Ior use in Iurther processing. More than 30 nations grow
industrial hemp as an agricultural commodity, which is sold on the world market.
In the early 1990s a sustained resurgence oI interest in allowing commercial cultivation oI
industrial hemp began in the United States. Several states have conducted economic or market
studies, and have initiated or passed legislation to expand state-level resources and production.
The 113
th
Congress made changes to U.S. policies regarding industrial hemp during the omnibus
Iarm bill debate. The Agricultural Act oI 2014 ('Iarm bill, P.L. 113-79, 7606) provides that
certain research institutions and state departments oI agriculture may grow industrial hemp, as
part oI an agricultural pilot program, iI allowed under state laws where the institution or state
department oI agriculture is located. The Iarm bill also established a statutory deIinition oI
'industrial hemp as 'the plant Cannabis sativa L. and any part oI such plant, whether growing or
not, with a delta-9 tetrahydrocannabinol concentration oI not more than 0.3 percent on a dry
weight basis. The provision was included as part oI the research title oI the law.
Other introduced legislation, such as the Industrial Hemp Farming Act oI 2013 (H.R. 525; S.
359), could allow Ior possible commercial cultivation oI industrial hemp in the United States.
Those bills would amend the CSA to speciIy that the term 'marijuana does not include industrial
hemp, which the bill would deIine based on its content oI delta-9 tetrahydrocannabinol (THC),
marijuana`s primary psychoactive chemical. Such a change could remove low-THC hemp Irom
being covered by the CSA as a controlled substance and subject to DEA regulation.

Cnntcnts
Introduction ...................................................................................................................................... 1
Overview oI Cannabis Varieties ...................................................................................................... 1
Comparison oI Hemp and Marijuana ........................................................................................ 1
Production DiIIerences .............................................................................................................. 2
Hemp ................................................................................................................................... 3
Marijuana ............................................................................................................................ 4
Hemp Production and Use ............................................................................................................... 4
Commercial Uses oI Hemp ....................................................................................................... 4
Estimated Retail Market ............................................................................................................ 6
U.S. Hemp Imports .................................................................................................................... 6
U.S. Market Potential ................................................................................................................ 7
Global Production ............................................................................................................................ 9
International Production ............................................................................................................ 9
Historical U.S. Production ....................................................................................................... 11
Legal Status in the United States ................................................................................................... 13
Federal Drug Law .................................................................................................................... 13
Controlled Substances Act oI 1970 ................................................................................... 13
DEA`s 2003 Rules Regarding Hemp ................................................................................. 14
Dispute over Hemp Food Imports (1999-2004) ................................................................ 15
Other DEA Policy Statements ........................................................................................... 16
2013 DEA Guidance Outlined in 'Cole Memo ............................................................... 17
Farm Bill and Other Federal Laws .......................................................................................... 18
2014 Farm Bill .................................................................................................................. 18
FY2015 Commerce-Justice-Science (C-J-S) Appropriations ............................................ 19
Other Federal Actions Involving USDA ........................................................................... 19
State Laws ............................................................................................................................... 20
Ongoing Legislative Activity ......................................................................................................... 23
Industrial Hemp Farming Act .................................................................................................. 23
Groups Supporting/Opposing Further Legislation .................................................................. 24
Concluding Remarks ..................................................................................................................... 25

Figurcs
Figure 1. Trait Variation in Cannabis Phenotype ............................................................................. 3
Figure 2. Flowchart oI Potential Hemp Products............................................................................. 5
Figure 3. Hemp Fiber and Seed, Global Production (1999-2011) ................................................. 10
Figure 4. Canadian Hemp Acreage, 1998-2011 ............................................................................. 12


Tab!cs
Table 1. Value and Quantity oI U.S. Imports oI Selected Hemp Products, Selected Years,
1996-2013 ..................................................................................................................................... 8

Appcndixcs
Appendix. Listing oI Selected Hemp Studies ................................................................................ 27

Cnntacts
Author Contact InIormation........................................................................................................... 28


Congressional Research Service 1
Intrnductinn
For centuries, industrial hemp (plant species Cannabis sativa) has been a source oI Iiber and
oilseed used worldwide to produce a variety oI industrial and consumer products. Currently, more
than 30 nations grow industrial hemp as an agricultural commodity, which is sold on the world
market. In the United States, however, production is strictly controlled under existing drug
enIorcement laws. Currently there is no large-scale commercial production in the United States
and the U.S. market depends on imports.
The 113
th
Congress made changes to U.S. policies regarding industrial hemp during the omnibus
Iarm bill debate. The Agricultural Act oI 2014 (P.L. 113-79) includes a provision allowing certain
research institutions and also state departments oI agriculture to grow industrial hemp, iI allowed
under state laws where the institution or state department oI agriculture is located. Other
introduced legislation in the Industrial Hemp Farming Act oI 2013 (H.R. 525; S. 359) could
provide Ior even greater opportunities Ior commercial cultivation oI hemp in the United States.
Ovcrvicw nI !"##"$%& Varictics
Although marijuana is also a variety oI cannabis, it is genetically distinct Irom industrial hemp
and is Iurther distinguished by its use and chemical makeup.
In this report, 'hemp reIers to industrial hemp, 'marijuana (or 'marihuana as it is spelled in
the older statutes) reIers to the psychotropic drug (whether used Ior medicinal or recreational
purposes), and 'cannabis reIers to the plant species that has industrial, medicinal, and
recreational varieties.
1

Cnmparisnn nI Hcmp and Mari|uana
There are many diIIerent varieties oI cannabis plants. Marijuana and hemp come Irom the same
species oI plant, Cannabis sativa, but Irom diIIerent varieties or cultivars. However, hemp is
genetically diIIerent and is distinguished by its use and chemical makeup, as well as by diIIering
cultivation practices in its production.
2

Hemp, also called 'industrial hemp,
3
reIers to cannabis varieties that are primarily grown as an
agricultural crop (such as seeds and Iiber, and byproducts such as oil, seed cake, hurds) and is
characterized by plants that are low in THC (delta-9 tetrahydrocannabinol, marijuana`s primary
psychoactive chemical). THC levels Ior hemp are generally less than 1.
Marijuana reIers to the Ilowering tops and leaves oI psychoactive cannabis varieties, which are
grown Ior their high content oI THC. Marijuana`s high THC content is primarily in the Ilowering

1
This report does not cover issues pertaining to medical marijuana. For inIormation on that subject, see CRS Report
RL33211, Medical Marifuana. Review and Analvsis of Federal and State Policies, or related CRS reports.
2
See, Ior example, S. L. Datwyler and G. D. Weiblen, 'Genetic variation in hemp and marijuana (Cannabis sativa L.)
according to ampliIied Iragment length polymorphisms, Journal of Forensic Sciences, Vol. 51, No. 2 (2006).
3
Use oI this term dates back to the 1960s; see L. Grlic, 'A combined spectrophotometric diIIerentiation oI samples oI
cannabis, United Nations OIIice On Drugs and Crime (UNODC), January 1968, http://www.unodc.org/unodc.

tops and to a lesser extent in the leaves. THC levels Ior marijuana are much higher than Ior hemp,
and are reported to average about 10; some sample tests indicate THC levels reaching 20-
30, or greater.
4

A level oI about 1 THC is considered the threshold Ior cannabis to have a psychotropic eIIect or
an intoxicating potential.
5
Current laws regulating hemp cultivation in the European Union (EU)
and Canada use 0.3 THC as the dividing line between industrial and potentially drug-producing
cannabis. Cultivars having less than 0.3 THC can be cultivated under license, while cultivars
having more than that amount are considered to have too high a drug potential.
6

Some also claim that industrial hemp has higher levels oI cannabidiol (CBD), the non-
psychoactive part oI marijuana, which might mitigate some oI the eIIects oI THC.
7
A high ratio oI
CBD to THC might also classiIy hemp as a Iiber-type plant rather than a drug-type plant.
Opinions remain mixed about how CBD levels might inIluence the psychoactive eIIects oI THC.
Prnductinn DiIIcrcnccs
Production diIIerences depend on whether the cannabis plant is grown Ior Iiber/oilseed or Ior
medicinal/recreational uses. These diIIerences involve the varieties being grown, the methods
used to grow them, and the timing oI their harvest (see discussion in 'Hemp and 'Marijuana,
below). Concerns about cross-pollination among the diIIerent varieties are critical. All cannabis
plants are open, wind and/or insect pollinated, and thus cross-pollination is possible.
Because oI the compositional diIIerences between the drug and Iiber varieties oI cannabis,
Iarmers growing either crop would necessarily want to separate production oI the diIIerent
varieties or cultivars. This is particularly true Ior growers oI medicinal or recreational marijuana
in an eIIort to avoid cross-pollination with industrial hemp, which would signiIicantly lower the
THC content and thus degrade the value oI the marijuana crop. Likewise, growers oI industrial
hemp would seek to avoid cross-pollination with marijuana plants, especially given the illegal
status oI marijuana. Plants grown oI oilseed are also marketed according to the purity oI the
product, and the mixing oI oII-type genotypes would degrade the value oI the crop.
8

The diIIerent cannabis varieties are also harvested at diIIerent times (depending on the growing
area), increasing the chance oI detection oI illegal marijuana, iI production is commingled.

4
National Institute oI Drug Abuse, 'Quarterly Report, Potency Monitoring project, Report 100, University oI
Mississippi, 2008. Based on sample tests oI illegal cannabis seizures (December 16, 2007, through March 15, 2008).
5
E. Small and D. Marcus, 'Hemp: A new crop with new uses Ior North America, In: Trends in New Crops and New
Uses, J. Janick and A. Whipkey (eds.), American Society Ior Horticultural Science (ASHS) Press, 2002.
6
E. Small and D. Marcus, 'Tetrahydrocannabinol levels in hemp (Cannabis sativa) germplasm resources, Economic
Botanv, vol. 57, no. 4 (October 2003); and G. Leson, 'Evaluating InterIerence oI THC Levels in Hemp Food Products
with Employee Drug Testing (prepared Ior the Province oI Manitoba, Canada), July, 2000.
7
U. R. Avico, R. PaciIici, and P. Zuccaro, 'Variations oI tetrahydrocannabinol content in cannabis plants to distinguish
the Iibre-type Irom drug-type plants, UNODC Bulletin on Narcotics, January 1985; C. W. Waller, 'Chemistry OI
Marihuana, Pharmacological Reviews, vol. 23 (December 1971); K.W. Hillig and P. G. Mahlberg, 'A
chemotaxonomic analysis oI cannabinoid variation in Cannabis (Cannabaceae), American Journal of Botanv, vol. 91,
no. 6 (June 2004); and A. W. Zuardi et al., 'Cannabidiol, a Cannabis sativa constituent, as an antipsychotic drug,
Bra:ilian Journal of Medical and Biological Research, vol. 39 (2006).
8
CRS communication with Anndrea Hermann, Hemp Oil Canada Inc., December 2009. Pollen is present at a very
early plant development stage.

Because oI these diIIerences, many claim that drug varieties oI cannabis cannot easily be grown
with oilseed or Iiber varieties without being easily detected.
9
As discussed below (and illustrated
in !"#$%& (), among the visual plant diIIerences are )*+,- .&"#.- (hemp is encouraged to grow
tall, whereas marijuana is selected to grow short and tightly clustered); /$*-"0+-"1, (hemp is
grown as a single main stalk with Iew leaves and branches, whereas marijuana is encouraged to
become bushy with many leaves and branches to promote Ilowers and buds); and )*+,-",#
2&,3"-4 (hemp is densely planted to discourage branching and Ilowering, whereas marijuana
plants are well-spaced).
Figure 1. Trait Variation in Cannabis Phenotype
(marljuana ano lnoustrlal bemp)

5ource: George Welblen, Unlverslty ot Mlnnesota, presentatlon at tbe 2013 Annual H|A Conterence,
Wasblngton, DC, November 17, 2013.
Notes: Pbotograpbs contrastlng marljuana ano lnoustrlal bemp are avallable at vote Hemp's webslte (Dltterent
varletles ot !"##$%$&, bttp://www.votebemp.com/oltterent_varletles.btml).
Hcmp
To maximize production oI hemp Iiber and/or seed, plants are encouraged to grow taller in height.
Cultivated plants become a tall stalky crop that usually reaches between 6 and 15 Ieet, and
generally consist oI a single main stalk with Iew leaves and branches. Hemp plants grown Ior
Iiber or oilseed are planted densely (about 35-50 plants per square Ioot)
10
to discourage branching
and Ilowering. The period oI seeding to harvest ranges Irom 70 to 140 days, depending on the
purpose, cultivar or variety, and climatic conditions. The stalk and seed is the harvested product.
The stalk oI the plant provides two types oI Iibers: the outer portion oI the stem contains the bast
Iibers, and the interior or core Iiber (or hurds).

9
D. P. West, 'Hemp and Marijuana: Myths & Realities, February 1998, http://www.gametec.com/hemp/
hempandmj.html. Also see inIormation posted by Vote Hemp Inc., 'DiIIerent Varieties oI Cannabis (no date),
http://www.votehemp.com/diIIerentvarieties.html.
10
Innvista, 'Hemp Biology (no date), http://www.innvista.com/health/Ioods/hemp/hempbiol.htm.

Industrial hemp production statistics Ior Canada indicate that one acre oI hemp yields an average
oI about 700 pounds oI grain, which can be pressed into about 50 gallons oI oil and 530 pounds
oI meal.
11
That same acre will also produce an average oI 5,300 pounds oI straw, which can be
transIormed into about 1,300 pounds oI Iiber.
Mari|uana
When cannabis is grown to produce marijuana, it is cultivated Irom varieties where the Iemale
Ilowers oI dioecious drug strains are selected to prevent the return oI separate male and Iemale
plants.
12
The Iemale Ilowers are short and tightly clustered. In marijuana cultivation, growers
remove all the male plants to prevent pollination and seed set. Some growers will hand-pollinate a
Iemale plant to get seed; this is done in isolation oI the rest oI the Iemale plants. The
incorporation and stabilization oI monoecism in cannabis cultivation requires the skill oI a
competent plant breeder, and rarely occurs under non-cultivated conditions.
II marijuana is grown in or around industrial hemp varieties, the hemp would pollinate the Iemale
marijuana plant. Marijuana growers would not want to plant near a hemp Iield, since this would
result in a harvest that is seedy and lower in THC, and degrade the value oI their marijuana crop.
Marijuana is cultivated to encourage the plant to become bushy with many leaves, with wide
branching to promote Ilowers and buds. This requires that plants be well-spaced, by as much as
about 1-2 plants per square yard.
13
The Ilower and leaves are the harvested products.
Hcmp Prnductinn and Usc
Cnmmcrcia! Uscs nI Hcmp
Industrial hemp can be grown as a Iiber, seed, or dual-purpose crop.
14
The interior oI the stalk has
short woody Iibers called hurds; the outer portion has long bast Iibers. Hemp seed/grains are
smooth and about one-eighth to one-Iourth oI an inch long.
15

Although hemp is not grown in the United States, both Iinished hemp products and raw material
inputs are imported and sold Ior use in manuIacturing Ior a wide range oI product categories
(!"#$%& 5). Hemp Iibers are used in a wide range oI products, including Iabrics and textiles, yarns
and spun Iibers, paper, carpeting, home Iurnishings, construction and insulation materials, auto
parts, and composites. Hurds are used in various applications such as animal bedding, material
inputs, papermaking, and composites. Hemp seed and oilcake are used in a range oI Ioods and

11
Agriculture and Agri-Food Canada, 'Industrial Hemp (no date), http://www4.agr.gc.ca/.
12
H. van Bakel et al., 'The draIt genome and transcriptome oI Cannabis sativa, Genome Biologv, Vol. 12, Issue 10,
2011. In botany, dioecious is a term describing plant varieties that possess male and Iemale Ilowers or other
reproductive organs on separate, individual plants.
13
Innvista, 'Hemp Biology (no date), http://www.innvista.com/health/Ioods/hemp/hempbiol.htm.
14
DiIIerent varieties have been developed may be better suited Ior one use or the other. Cultivation practices also diIIer
depending upon the variety planted.
15
For additional inIormation, see U.S. Department oI Agriculture, Economic Research Service, Industrial Hemp in the
United States. Status and Market Potential, ERS Report AGES001E, January 2000.

beverages, and can be an alternative Iood protein source. Oil Irom the crushed hemp seed is used
as an ingredient in a range oI body-care products and nutritional supplements.
16
Hemp seed is
also used Ior industrial oils, cosmetics and personal care products, and pharmaceuticals, among
other composites.
Figure 2. FIowchart of PotentiaI Henp Products

5ource: CRS, aoapteo trom D. G. Kraenzel et al., |noustrlal Hemp as an Alternatlve Crop ln Nortb Dakota,
ALR-402, Nortb Dakota State Unlverslty, [uly 23, 1998.
Some estimate that the global market Ior hemp consists oI more than 25,000 products in nine
submarkets: agriculture; textiles; recycling; automotive; Iurniture; Iood/nutrition/beverages;
paper; construction materials; and personal care. For construction materials, such as hempcrete (a
mixture oI hemp hurds and lime products), hemp is used as a lightweight insulating material.
17

Hemp has also been promoted as a potential biodiesel Ieedstock,
18
although some analysts
suggest that competing demands Ior other products might make it too costly to use as a
Ieedstock.
19

16
Some have suggested similarities between hempseed oil and hash oil. However, there is evidence suggesting
diIIerences regarding initial Ieedstock or input ingredients (hash oil requires high THC marijuana whereas hempseed
oil uses low THC industrial hemp); how they are produced (hash oil is extracted oIten using a Ilammable solvent
whereas hempseed oil is expeller-pressed or extracted mechanically, generally without chemicals or additives); and
how they are used (hash oil is used as a psychoactive drug whereas hempseed oil is used as an ingredient in hemp-
based Ioods, supplements, and body care products). For more background inIormation, contact the author oI this report.
17
'Hemp Homes are Cutting Edge oI Green Building, USA Todav, September 12, 2010; and 'Construction Plant,
Financial Times, January 22, 2010.
18
Manitoba Agriculture, National Industrial Hemp Strategv, March 2008, p. 293; J. Lane, 'Hemp Makes Comeback as
BioIuels Feedstock in 43-acre CaliIornia Trial, Biofuels Digest, August 24, 2009; and H. Jessen, 'Hemp Biodiesel:
When the Smoke Clears, Biodiesel Maga:ine, February 2007.
19
North Dakota State University (NSDU), 'BioIuel Economics: BiocompositesNew Uses Ior North Dakota
Agricultural Fibers and Oils (no date).

These types oI commercial uses are widely documented in a range oI Ieasibility and marketing
studies conducted by researchers at the U.S. Department oI Agriculture (USDA) and various land
grant universities and state agencies. (A listing oI these studies is in the 6))&,2"7.)
Estimatcd Rctai! Markct
There is no oIIicial estimate oI the value oI U.S. sales oI hemp-based products. The Hemp
Industries Association (HIA) estimates that the total U.S. retail value oI hemp products in 2013
was $581 million, which includes Iood and body products, clothing, auto parts, building materials
and other products.
20
OI this, HIA reports that the value oI hemp-based Iood, supplements, and
body care sales in the United States totaled $184 million. Previous reports about the size oI the
U.S. market Ior hemp clothing and textiles are estimated at about $100 million annually.
21

The reported retail value oI the U.S. hemp market is an estimate and is diIIicult to veriIy.
Underlying data Ior this estimate are Irom SPINS survey data;
22
however, because the data
reportedly do not track retail sales Ior The Body Shop and Whole Foods Markettwo major
markets Ior hemp-based productsas well as Ior restaurants, hemp industry analysts have
adjusted these upward to account Ior this gap in the reported survey data.
23

Available industry inIormation indicates that sales oI some hemp-based products, such as Ioods
and body care products, is growing.
24
Growth in hemp specialty Iood products is driven, in part,
by sales oI hemp milk and related dairy alternatives, among other hemp-based Ioods.
25

InIormation is not available on other potential U.S. hemp-based sectors, such as Ior use in
construction materials or bioIuels, paper, and other manuIacturing uses. Data are not available on
existing businesses or processing Iacilities that may presently be engaged in such activities within
the United States.
U.5. Hcmp Impnrts
The import value oI hemp-based products imported and sold in the United States is diIIicult to
estimate accurately. For some traded products, available statistics have only limited breakouts or
have been expanded only recently to capture hemp subcategories within the broader trade
categories Ior oilseeds and Iibers. Reporting errors are evident in some oI the trade data, since
reported export data Ior hemp Irom Canada do not consistently match reported U.S. import data
Ior the same products (especially Ior hemp seeds).

20
HIA, '2013 Annual Retail Sales Ior Hemp Products Exceeds $581 Million, February 28, 2014.
21
HIA, 'Hemp Fabric goes High Fashion, February 11, 2008. Estimate reIlects best available current inIormation
based on personal communication between CRS and HIA.
22
SPINS tracks data and market trends on the Natural Product Industry sales (http://www.spins.com/).
23
CRS communication with representatives oI Vote Hemp, Inc., May 2010. See also HIA`s press release, 'Growing
Hemp Food and Body Care Sales is Good News Ior Canadian Hemp Seed and Oil Producers, April 29, 2009.
24
H. Fastre, CEO oI Living Harvest Foods, based on his comments and presentation, 'The Future oI Hemp, HIA
Convention, Washington DC, October 2009; and HIA, 'Growing Hemp Food and Body Care Sales is Good News Ior
Canadian Hemp Seed and Oil Producers, April 29, 2009.
25
HIA, 'Hemp Milk Products Boosted Growth oI Hemp Food Market in 2007, March 14, 2008.

Given these data limitations, available trade statistics indicate that the value oI U.S. imports under
categories actually labeled 'hemp, such as hemp seeds and Iibers, which are more oIten used as
inputs Ior use in Iurther manuIacturing, was nearly $36.9 million in 2013. Compared to available
data Ior 2005, the value oI imported hemp products Ior use as inputs and ingredients has
increased more than sixIold. However, import volumes Ior other products such as hemp oil and
Iabrics are lower (8+9*& (). Trade data are not available Ior Iinished products, such as hemp-
based clothing or other products including construction materials, carpets, or hemp-based paper
products.
The single largest supplier oI U.S. imports oI raw and processed hemp Iiber is China. Other
leading country suppliers include Romania, Hungary, India, and other European countries. The
single largest source oI U.S. imports oI hemp seed and oilcake is Canada. The total value oI
Canada`s exports oI hemp seed to the United States has grown signiIicantly in recent years
Iollowing resolution oI a long-standing legal dispute over U.S. imports oI hemp Ioods in late
2004 (see 'Dispute over Hemp Food Imports (1999-2004)). European countries such as the
United Kingdom and Switzerland also have supplied hemp seed and oilcake to the United States.
U.5. Markct Pntcntia!
In the past two decades, several Ieasibility and marketing studies have been conducted by
researchers at the USDA and various land grant universities and state agencies (Ior example,
Arkansas, Kentucky, Maine, Minnesota, North Dakota, Oregon, and Vermont; see 6))&,2"7).
Studies by researchers in Canada and various state agencies provide a mostly positive market
outlook Ior growing hemp, citing rising consumer demand and the potential range oI product uses
Ior hemp. Some state reports claim that iI current restrictions on growing hemp in the United
States were removed, agricultural producers in their states could beneIit. A 2008 study reported
that acreage under cultivation in Canada, 'while still showing signiIicant annual Iluctuations, is
now regarded as being on a strong upward trend. Most studies generally note that 'hemp ... has
such a diversity oI possible uses, |and| is being promoted by extremely enthusiastic market
developers. Other studies highlight certain production advantages associated with hemp or
acknowledge hemp`s beneIits as a rotational crop or Iurther claim that hemp may be less
environmentally degrading than other agricultural crops. Some studies also claim certain
production advantages to hemp growers, such as relatively low input and management
requirements Ior the crop.
Other studies Iocused on the total U.S. market diIIer Irom the various state reports and provide a
less Iavorable aggregate view oI the potential market Ior hemp growers in the United States. Two
studies, conducted by researchers at USDA and University oI Wisconsin-Madison (UW-M),
highlight some oI the continued challenges Iacing U.S. hemp producers.

CRS-8
TabIe 1. VaIue and Quantity of U.5. lnports of 5eIected Henp Products, 5eIected Years, 1996-2013
units 1996 2000 2005 2009 2010 2011 2012 2013
Henp 5eeds (HS 1207990220)
a
$1000 271 3,320 5,154 6,054 13,057 26,710
Henp OiI and Fractions
(HS 1515908010)
$1000
3,027 1,042 1,833 1,146 1,098 2,264
Henp 5eed OiIcake and Other
5oIids (HS 2306900130)
$1000
1,811 2,369 2,947 4,388 6,279
True Henp, raw/processed not
spun (HS 5302)
$1000
100 577 228 114 94 181 157 78
True Henp Yarn (HS 5308200000) $1000 25 640 904 568 296 580 496 478
True Henp Woven Fabrics
(HS 5311004010)
$1000
1,291 2,258 1,232 894 1,180 1,363 1,363 1,057
TotaI 1,416 3,475 5,662 7,749 10,926 12,271 20,559 36,866
Henp 5eeds (HS 1207990220)
a
metrlc ton 92 602 711 623 1,237 2,272
Henp OiI and Fractions
(HS 1515908010)
metrlc ton
287 128 215 157 208 450
Henp 5eed OiIcake and Other
5oIids (HS 2306900130)
metrlc ton
201 240 298 441 601
True Henp, raw/processed not
spun (HS 5302)
metrlc ton
53 678 181 83 42 89 66 72
True Henp Yarn (HS 5308200000) metrlc ton 6 89 113 76 42 86 88 70
5ubtotaI 59 767 673 1,090 1,250 1,253 2,040 3,465
True Henp Woven Fabrics
(HS 5311004010)
m2 (1000)
435 920 478 263 284 270 319 224
5ource: Complleo by CRS uslng oata trom tbe U.S. |nternatlonal Traoe Commlsslon (US|TC), bttp://oataweb.usltc.gov. Data are by Harmonlzeo System (HS) cooe. Data
sbown as lnolcate oata are not avallable as breakout categorles tor some proouct subcategorles were establlsbeo only recently.
a. Data tor 2007-2011 were supplementeo by reporteo Canaolan eport oata tor bemp seeos (HS 12079910, Hemp seeos, wbetber or not broken) as reporteo by Global
Traoe Atlas, bttp://www.gtls.com/gta/. Ottlclal U.S. traoe oata reporteo no lmports ourlng tbese years tor tbese HS subcategorles. Tbe Canaolan eport oata as
reporteo by Global Traoe Atlas also oltter tor bemp seeo ollcake (15159020, Hemp oll ano lts tractlons, wbetber or not retlneo but not cbemlcally mooltleo) but were
not slmllarly substltuteo slnce otber countrles eporteo proouct to tbe Unlteo States.


For example, USDA`s study projected that U.S. hemp markets 'are, and will likely remain, small,
thin markets and also cited 'uncertainty about long-run demand Ior hemp products and the
potential Ior oversupply among possible downsides oI potential Iuture hemp production.
Similarly, the UW-M study concluded that hemp production 'is not likely to generate sizeable
proIits and although hemp may be 'slightly more proIitable than traditional row crops it is
likely 'less proIitable than other specialty crops due to the 'current state oI harvesting and
processing technologies, which are quite labor intensive, and result in relatively high per unit
costs.
26
The study highlights that U.S. hemp growers could be aIIected by competition Irom
other world producers as well as by certain production limitations in the United States, including
yield variability and lack oI harvesting innovations and processing Iacilities in the United States,
as well as diIIiculty transporting bulk hemp. The study Iurther claims that most estimates oI
proIitability Irom hemp production are highly speculative, and oIten do not include additional
costs oI growing hemp in a regulated market, such as the cost associated with 'licensing,
monitoring, and veriIication oI commercial hemp.
27

A 2013 study by researchers at the University oI Kentucky highlights some oI the issues and
challenges Ior that state`s growers, processors, and industry. The study predicts that in Kentucky,
despite 'showing some positive returns, under current market conditions, it does not appear that
anticipated hemp returns will be large enough to entice Kentucky grain growers to shiIt out oI
grain production, under most circumstances; also, 'short run employment opportunities evolving
Irom a new Kentucky hemp industry appear limited (perhaps dozens oI new jobs, not 100s),
because oI continued uncertainty in the industry.
28
Overall, the study concludes there are many
remaining unknowns and Iurther analysis and production research is needed.
Given the absence since the 1950s oI any commercial and unrestricted hemp production in the
United States, it is not possible to predict the potential market and employment eIIects oI relaxing
current restrictions on U.S. hemp production. While expanded market opportunities might exist in
some states or localities iI current restrictions on production are liIted, it is not possible to predict
the potential Ior Iuture retail sales or employment gains in the United States, either nationally or
within certain states or regions. Limited inIormation is available Irom previous market analyses
that have been conducted by researchers at USDA and land grant universities and state agencies.
29

G!nba! Prnductinn
Intcrnatinna! Prnductinn
Approximately 30 countries in Europe, Asia, and North and South America currently permit
Iarmers to grow hemp. Some oI these countries never outlawed production, while some countries

26
T. R. Fortenbery and M. Bennett, 'Opportunities Ior Commercial Hemp Production, Review of Agricultural
Economics, 26(1): 97-117, 2004.
27
Ibid.
28
University oI Kentucky, Department oI Agricultural Economics, Economic Considerations for Growing Industrial
Hemp. Implications for Kentuckvs Farmers and Agricultural Economv, July 2013.
29
For more inIormation, see CRS Congressional Distribution Memorandum, 'Potential U.S. Market EIIects oI
Removing Restrictions on Growing Industrial Hemp, March 4, 2013), available Irom Renee Johnson (7-9588).

banned production Ior certain periods in the past. China is among the largest producing and
exporting countries oI hemp textiles and related products, as well as a major supplier oI these
products to the United States. The European Union (EU) has an active hemp market, with
production in most member nations. Production is centered in France, the United Kingdom,
Romania, and Hungary.
30

Acreage in hemp cultivation worldwide has been mostly Ilat to decreasing, reported at about
200,000 acres globally in 2011.
31
Although variable year-to-year, global production has increased
overall Irom about 250 million pounds in 1999 to more than 380 million pounds in 2011, mostly
due to increasing production oI hemp seed (!"#$%& :). Upward trends in global hemp seed
production roughly track similar upward trends in U.S. imports oI hemp seed and oil, mostly Ior
use in hemp-based Ioods, supplements, and body care products (8+9*& ().
Figure 3. Henp Fiber and 5eed, GIobaI Production {1999-2011}

5ource: FAOSTAT, bttp://taostat.tao.org/slte/567/oetault.asp#ancor.
Many EU countries liIted their bans on hemp production in the 1990s and, until recently, also
subsidized the production oI 'Ilax and hemp under the EU`s Common Agricultural Policy.
32
EU
hemp acreage was reported at about 26,000 acres in 2010, which was below previous years, when
more than 50,000 acres oI hemp were under production.
33
Most EU production is oI hurds, seeds,
and Iibers. Other non-EU European countries with reported hemp production include Russia,
Ukraine, and Switzerland. Other countries with active hemp grower and/or consumer markets are
Australia, New Zealand, India, Japan, Korea, Turkey, Egypt, Chile, and Thailand.

30
Other EU producing countries include Austria, Denmark, Finland, Germany, Italy, Netherlands, Poland, Portugal,
Slovenia, and Spain.
31
Food and Agriculture Organization (FAO) oI the United Nations, FAOSTAT crop data, http://Iaostat.Iao.org/.
32
For inIormation on the EU`s prior agricultural support Ior industrial hemp, see the EU`s notiIication to the World
Trade Organization regarding its domestic support Ior agricultural producers (G/AG/N/EEC/68; January 24, 2011).
33
M. Carus et al., 'The European Hemp Industry, May 2013. Also see European Industrial Hemp Association,
'European Commission: Hemp and Flax, AGRI C5, 2009, February 2009.

Canada is another major supplier oI U.S. imports, particularly oI hemp-based Ioods and related
imported products. Canada`s commercial hemp industry is Iairly new: Canada began to issue
licenses Ior research crops in 1994, Iollowed by commercial licenses starting in 1998.
The development oI Canada`s hemp market Iollowed a 60-year prohibition and is strictly
regulated.
34
Its program is administered by the OIIice oI Controlled Substances oI Health Canada,
which issues licenses Ior all activities involving hemp. Under the regulation, all industrial hemp
grown, processed, and sold in Canada may contain THC levels no more than 0.3 oI the weight
oI leaves and Ilowering parts. Canada also has set a maximum level oI 10 parts per million (ppm)
Ior THC residues in products derived Irom hemp grain, such as Ilour and oil.
35
To obtain a license
to grow hemp, Canadian Iarmers must submit extensive documentation, including background
criminal record checks, the Global Positioning System (GPS) coordinates oI their Iields, and
supporting documents (Irom the Canadian Seed Growers` Association or the Canadian Food
Inspection Agency) regarding their use oI low-THC hemp seeds and approved cultivars; and they
must allow government testing oI their crop Ior THC levels.
36
Since hemp cultivation was
legalized in Canada, production has been variable year-to-year (!"#$%& ;), ranging Irom a high oI
48,000 acres planted in 2006, to about 4,000 acres in 2001-2002, to a reported nearly 39,000
acres in 2011. Canada`s hemp cultivation still accounts Ior less than 1 oI the country`s available
Iarmland. The number oI cultivation licenses has also varied Irom year to year, reaching a high oI
560 licenses in 2006, Iollowed by a low oI 77 licenses in 2008 (with 340 licenses in 2011).
37

Histnrica! U.5. Prnductinn
Hemp was widely grown in the United States Irom the colonial period into the mid-1800s; Iine
and coarse Iabrics, twine, and paper Irom hemp were in common use. By the 1890s, labor-saving
machinery Ior harvesting cotton made the latter more competitive as a source oI Iabric Ior
clothing, and the demand Ior coarse natural Iibers was met increasingly by imports. Industrial
hemp was handled in the same way as any other Iarm commodity, in that USDA compiled
statistics and published crop reports,
38
and provided assistance to Iarmers promoting production
and distribution.
39
In the early 1900s, hemp continued to be grown and researchers at USDA
continued to publish inIormation related to hemp production and also reported on hemp`s
potential Ior use in textiles and in paper manuIacturing.
40
Several hemp advocacy groups,
including the Hemp Industries Association (HIA) and Vote Hemp Inc., have compiled other
historical inIormation and have copies oI original source documents.
41

34
Industrial Hemp Regulations (SOR/98-156), as part oI the Controlled Drugs and Substances Act.
35
Agriculture Canada, 'Canada`s Industrial Hemp Industry, March 2007, http://www4.agr.gc.ca.
36
See Health Canada`s FAQs on its hemp regulations and its application Ior obtaining permits (http://www.hc-sc.gc.ca/
). Other inIormation is at the Canadian Food Inspection Agency website (http://www.inspection.gc.ca/).
37
Health Canada, Industrial Hemp Section, 'Cultivation Licenses, October 25, 2011.
38
See, Ior example, editions oI USDA Agricultural Statistics. A compilation oI U.S. government publications is
available Irom the Hemp Industries Association (HIA) at http://www.hempology.org/ALLARTICLES.html.
39
See, Ior example, USDA`s 1942 short Iilm 'Hemp Ior Victory, and University oI Wisconsin`s Extension Service
Special Circular, 'What about Growing Hemp, November 1942.
40
Regarding papermaking, see L. H. Dewey and J. L. Merrill, 'Hemp Hurds as Paper-Making Material, USDA
Bulletin No. 404, October 14, 1916. A copy oI this document is available, as posted by Vote Hemp Inc., at
http://www.votehemp.com/17855-h/17855-h.htm. Other USDA and state documents Irom this period are available at
http://www.hempology.org/ALLARTICLES.html.
41
See links at http://www.thehia.org/history.html and http://www.hemphistoryweek.com/timeline.html.

Figure 4. Canadian Henp Acreage, 1998-2011
"
#"$"""
%"$"""
&"$"""
'"$"""
("$"""
)"$"""
#**+ %""# %""& %""( %"", %""* %"##
-./01

5ource: Agrlculture ano Agrl-Fooo Canaoa, |noustrlal Hemp Statlstlcs, bttp://www4.agr.gc.ca/AAFC-AAC/
olsplay-attlcber.oo?lo=1174420265572&lang=eng.
Note: Tbe oownturn ln 2007 ls vleweo as a correctlon ot overproouctlon ln 2006, tollowlng tbe success ot tbe
court case agalnst tbe DLA ln 2004, ano contlnueo lmprovements ln breeolng, proouctlon, ano processlng,
wblcb resulteo ln part ln a oramatlc reouctlon ln bemp acreage planteo ln 2007. Tbe 2007 oownturn ls also
attrlbuteo to lncreaslngly posltlve economlcs ot growlng otber crops (Manltoba Agrlculture, Natlonal |noustrlal
Hemp Strategy, Marcb 2008, prepareo tor Fooo ano Rural |nltlatlve Agrlculture ano Agrl-Fooo Canaoa).
Between 1914 and 1933, in an eIIort to stem the use oI Cannabis Ilowers and leaves Ior their
psychotropic eIIects, 33 states passed laws restricting legal production to medicinal and industrial
purposes only.
42
The 1937 Marihuana Tax Act deIined hemp as a narcotic drug, requiring that
Iarmers growing hemp hold a Iederal registration and special tax stamp, eIIectively limiting
Iurther production expansion.
In 1943, U.S. hemp production reached more than 150 million pounds (140.7 million pounds
hemp Iiber; 10.7 million pound hemp seed) on 146,200 harvested acres. This compared to pre-
war production levels oI about 1 million pounds. AIter reaching a peak in 1943, production
started to decline. By 1948, production had dropped back to 3 million pounds on 2,800 harvested
acres, with no recorded production aIter the late 1950s.
43

Currently, industrial hemp is not grown commercially in the United States. No active Iederal
licenses allow U.S. commercial cultivation at this time.

42
R. J. Bonnie and C. H. Whitebread, The Marihuana Conviction. A Historv of Marihuana Prohibition in the United
States (Charlottesville: University Press oI Virginia, 1974), p. 51.
43
USDA Agricultural Statistics, various years through 1949. A summary oI data spanning 1931-1945 is available in
the 1946 edition. See 'Table 391Hemp Fiber and hempseed: Acreage, Yield, and Production, United States.

Lcga! 5tatus in thc Unitcd 5tatcs
Fcdcra! Drug Law
Cnntrn!!cd 5ubstanccs Act nI 1970
In 1937, Congress passed the Iirst Iederal law to discourage Cannabis production Ior marijuana
while still permitting industrial uses oI the crop (the Marihuana Tax Act; 50 Stat. 551). Under this
statute, the government actively encouraged Iarmers to grow hemp Ior Iiber and oil during World
War II. AIter the war, competition Irom synthetic Iibers, the Marihuana Tax Act, and increasing
public anti-drug sentiment resulted in Iewer and Iewer acres oI hemp being planted, and none at
all aIter 1958.
Strictly speaking, the Controlled Substances Act oI 1970 (CSA, 21 U.S.C. 801 et. seq.) does not
make growing hemp illegal; rather, it places strict controls on the production oI hemp, making it
illegal to grow the crop without a DEA permit.
The CSA adopted the same deIinition oI Cannabis sativa that appeared in the 1937 Marihuana
Tax Act. The deIinition oI 'marihuana (21 U.S.C. 802(16) reads:
The term marihuana means all parts oI the plant Cannabis sativa L., whether growing or not; the
seeds thereoI; the resin extracted Irom any part oI such plant; and every compound, manuIacture,
salt, derivative, mixture, or preparation oI such plant, its seeds or resin. Such term does not
include the mature stalks oI such plant, Iiber produced Irom such stalks, oil or cake made Irom
the seeds oI such plant, any other compound ... or preparation oI such mature stalks (except the
resin extracted thereIrom), Iiber, oil, or cake, or the sterilized seed oI such plant which is
incapable oI germination.
The statute thus retains control over all varieties oI the cannabis plant by virtue oI including them
under the term 'marijuana and does not distinguish between low- and high-THC varieties. The
language exempts Irom control the parts oI mature plantsstalks, Iiber, oil, cake, etc.intended
Ior industrial uses. Some have argued that the CSA deIinition exempts industrial hemp under its
term exclusions Ior stalks, Iiber, oil and cake, and seeds.
44
DEA reIutes this interpretation.
45

Since Iederal law prohibits cultivation without a permit, DEA determines whether any industrial
hemp production authorized under a state statute is permitted, and it enIorces standards governing
the security conditions under which the crop must be grown. In other words, a grower needs to
get permission Irom the DEA to grow hemp or Iaces the possibility oI Iederal charges or property
conIiscation, regardless oI whether the grower has a state-issued permit.
46

DEA issued a permit Ior an experimental quarter-acre plot at the Hawaii Industrial Hemp
Research Program during the period Irom 1999 to 2003 (now expired).
47
Most reports indicate

44
See, Ior example, Hemp Industries Association v. Drug Enforcement Administration, 357 F.2d (9
th
Circuit 2004).
45
66 Federal Register 51530.
46
Registration requirements are at 21 CFR 823. See also DEA`s registration procedures and applications at
http://www.deadiversion.usdoj.gov/drugreg/process.htm.
47
See, Ior example, DEA, 'Statement Irom the Drug EnIorcement Administration on the Industrial Use oI Hemp,
March 12, 1998, http://www.justice.gov/dea/pubs/pressrel/pr980312.htm.

that the DEA has not granted any current licenses to grow hemp, even Ior research purposes.
48
To
date, all commercial hemp products sold in the United States are imported or manuIactured Irom
imported hemp materials. In May 2013, it was reported that hemp is being cultivated in Colorado,
Iollowing changes to that state`s laws in November 2012.
49

Even iI DEA were to approve a permit, it could be argued that production might be limited or
discouraged because oI the perceived diIIiculties oI working through DEA licensing requirements
and installing the types oI structures necessary to obtain a permit. Obtaining a DEA permit to
produce hemp requires that the applicant demonstrate that an eIIective security protocol will be in
place at the production site, such as security Iencing around the planting area, a 24-hour
monitoring system, controlled access, and possibly armed guard(s) to prevent public access.
50

DEA application requirements also include a nonreIundable Iee, FBI background checks, and
extensive documentation. It could also be argued that, because oI the necessary time-consuming
steps involved in obtaining and operating under a DEA permit, the additional management and
production costs Irom installing structures, as well as other business and regulatory requirements,
could ultimately limit the operation`s proIitability.
The United States is a signatory oI the United Nations Single Convention on Narcotic Drugs,
1961 (as amended by the 1972 Protocol Amending the Single Convention on Narcotic Drugs,
1961).
51
The principal objectives oI the convention are to 'limit the possession, use, trade in,
distribution, import, export, manuIacture and production oI drugs exclusively to medical and
scientiIic purposes and to address drug traIIicking through international cooperation to deter and
discourage drug traIIickers.
52
The convention requires that each party control cannabis
cultivation within its borders; however, Article 28.2 oI the convention states: 'This Convention
shall not apply to the cultivation oI the cannabis plant exclusively Ior industrial purposes (Iibre
and seed) or horticultural purposes.
53
Thus the convention need not present an impediment to the
development oI a regulated hemp Iarming sector in the United States.
DEA's 2003 Ru!cs Rcgarding Hcmp
In March 2003, DEA issued two Iinal rules addressing the legal status oI hemp products derived
Irom the cannabis plant. The DEA Iound that hemp products 'oIten contain the hallucinogenic
substance tetrahydrocannabinols (THC) ... the primary psychoactive chemical Iound in the
cannabis (marijuana) plant.
54
Although the DEA acknowledged that 'in some cases, a Schedule I
controlled substance may have a legitimate industrial use, such use would only be allowed under
highly controlled circumstances. These rules set Iorth what products may contain 'hemp and
also prohibit 'cannabis products containing THC that are intended or used Ior human

48
S. Raabe, 'First major Hemp Crop in 60 Years is Planted in Southeast Colorado, Denverpost.com, May 13, 2013.
49
S. Raabe, 'First major Hemp Crop in 60 Years is Planted in Southeast Colorado, Denverpost.com, May 13, 2013.
50
University oI Kentucky Cooperative Extension Service, 'Industrial HempLegal Issues, September 2012.
51
United Nations Single Convention on Narcotic Drugs, 1961 (as amended by the 1972 Protocol Amending the Single
Convention on Narcotic Drugs, 1961), Article 28.
52
InIormation posted on International Narcotics Control Board (INCB) website.
53
Ibid.
54
DEA, 'DEA History in Depth, 1999-2003, and other DEA published resources.

consumption (Ioods and beverages).
55
Development oI the 2003 rule sparked a Iierce battle over
the permissibility oI imported hemp-based Iood products that lasted Irom 1999 until 2004.
Disputc nvcr Hcmp Fnnd Impnrts (1999-2004)
In late 1999, during the development oI the 2003 rules (described in the previous section), the
DEA acted administratively to demand that the U.S. Customs Service enIorce a zero-tolerance
standard Ior the THC content oI all Iorms oI imported hemp, and hemp Ioods in particular.
The DEA Iollowed up, in October 2001, with publication oI an interpretive rule in the Federal
Register explaining the basis oI its zero-tolerance standard.
56
It held that when Congress wrote the
statutory deIinition oI marijuana in 1937, it 'exempted certain portions oI the Cannabis plant
Irom the deIinition oI marijuana based on the assumption (now reIuted) that such portions oI the
plant contain none oI the psychoactive component now known as THC. Both the proposed rule
(which was published concurrently with the interpretive rule) and the Iinal 2003 rule gave
retailers oI hemp Ioods a date aIter which the DEA could seize all such products remaining on
shelves. On both rules, hemp trade associations requested and received court-ordered stays
blocking enIorcement oI that provision. The DEA`s interpretation made hemp with any THC
content subject to enIorcement as a controlled substance.
Hemp industry trade groups, retailers, and a major Canadian exporter Iiled suit against the DEA,
arguing that congressional intent was to exempt plant parts containing naturally occurring THC at
non-psychoactive levels, the same way it exempts poppy seeds containing trace amounts oI
naturally occurring opiates.
57
Industry groups maintain that (1) naturally occurring THC in the
leaves and Ilowers oI cannabis varieties grown Ior Iiber and Iood is already at below-
psychoactive levels (compared with drug varieties); (2) the parts used Ior Iood purposes (seeds
and oil) contain even less; and (3) aIter processing, the THC content is at or close to zero. U.S.
and Canadian hemp seed and Iood manuIacturers have in place a voluntary program Ior certiIying
low, industry-determined standards in hemp-containing Ioods. Background inIormation on the
TestPledge Program is available at http://www.TestPledge.com. The intent oI the program is to
assure that consumption oI hemp Ioods will not interIere with workplace drug testing programs or
produce undesirable mental or physical health eIIects.
On February 6, 2004, the U.S. Court oI Appeals Ior the Ninth Circuit permanently enjoined the
enIorcement oI the Iinal rule.
58
The court stated that 'the DEA`s deIinition oI THC` contravenes
the unambiguously expressed intent oI Congress in the CSA and cannot be upheld.
59
In late
September 2004 the Bush Administration let the Iinal deadline pass without Iiling an appeal.

55
Ibid.
56
57
21 U.S.C. 802 (19) and (20).
58
59
Hemp Industries Association v. Drug Enforcement Administration, 357 F.2d (9
th
Circuit 2004).

Othcr DEA Pn!icy 5tatcmcnts
Other DEA documentation illustrates how DEA has reviewed inquiries about the legal status oI
hemp-based products (such as those shown in !"#$%& 5), including inquiries Irom U.S. Customs
inspectors regarding the need Ior guidance regarding imported hemp products:
60

DEA took the position that it would Iollow the plain language oI the Controlled Substances Act
(CSA), which expressly states that anything that contains 'any quantity oI marijuana or THC is a
schedule I controlled substance. However, as a reasonable accommodation, DEA exempted Irom
control legitimate industrial products that contained THC but were not intended Ior human
consumption (such as clothing, paper, and animal Ieed).
DEA`s position that 'anything that contains any quantity` oI marijuana or THC should be
regarded as a controlled substance is Iurther supported by reports published by the National
Institute on Drug Abuse (NIDA), which is part oI the National Institutes oI Health. Although
NIDA does not have a Iormal position about industrial hemp, NIDA`s research tends to conIlate
all cannabis varieties, including marijuana and hemp. For example, NIDA reports: 'All Iorms oI
marijuana are mind-altering (psychoactive) and 'they all contain THC (delta-9-
tetrahydrocannabinol), the main active chemical in marijuana.
61
The DEA Iurther maintains that
the CSA does not diIIerentiate between diIIerent varieties oI cannabis based on THC content.
62

Regarding DEA`s issuance oI its 2003 rules and the import dispute that Iollowed (discussed in the
previous report sections), the agency continues to maintain that the courts have expressed
conIlicting opinions on these issues:
63

Despite the plain language oI the statute supporting DEA`s position, the ninth circuit ruled in
2004 that the DEA rules were impermissible under the statute and thereIore ordered DEA to
reIrain Irom enIorcing them. Subsequently, in 2006, another Iederal court oI appeals (the eight
circuit) took a diIIerent view, stating, as DEA had said in its rules: 'The plain language oI the
CSA states that schedule I(c) includes any material ... which contains any quantity oI THC` and
thus such material is regulated..
64
Thus, the Iederal courts have expressed conIlicting views
regarding the legal status oI cannabis derivatives.

Regarding interest among growers in some states to cultivate hemp Ior industrial use, DEA claims
that the courts have supported the agency`s current policy that all hemp growersregardless oI
whether a state permit has been issued and oI the THC contentare subject to the CSA and must
obtain a Iederal permit:
65

Under the CSA, anyone who seeks to grow marijuana Ior any purpose must Iirst obtain a DEA
registration authorizing such activity. However, several persons have claimed that growing
marijuana to produce so-called 'hemp (which purportedly contains a relatively low percentage
oI THC) is not subject to CSA control and requires no DEA registration. All such claims have

60
61
NIDA, 'Marijuana: Facts Ior Teens (no date), http://www.drugabuse.gov/MarijBroch/teenpg1-2.html.
62
63
Ibid.
64
DEA-cited court case: United States v. White Plume, 447 F.3d 1067, 1073 (8
th
Cir. 2006).
65
DEA, 'DEA History in Depth, 1999-2003, and other DEA published resources. DEA-cited court cases: New
Hampshire Hemp Council, Inc. v. Marshall, 203 F.3d I (1
st
Cir 2000); United States v. White Plume, supra; Monson v.
DEA, 522 F.Supp.2d 1188 (D. N.D. 2007), No. 07-3837 (8
th
Cir. 2007).

thus Iar Iailed, as every Iederal court that has addressed the issue has ruled that any person who
seeks to grow any Iorm oI marijuana (no matter the THC content or the purpose Ior which it is
grown) must obtain a DEA registration.
Regarding states that have enacted laws legalizing cannabis grown Ior industrial purposes, 'these
laws conIlict with the CSA, which does not diIIerentiate, Ior control purposes, between marijuana
oI relatively low THC content and marijuana oI greater THC content.
66

2013 DEA Guidancc Out!incd in "Cn!c Mcmn"
In August 2013, DOJ updated its Iederal marijuana enIorcement policy Iollowing 2012 state
ballot initiatives in Washington and Colorado that 'legalized, under state law, the possession oI
small amounts oI marijuana and provide Ior the regulation oI marijuana production, processing,
and sale.
67
The guidancecommonly reIerred to as the 'Cole memooutlines DOJ`s policy,
clariIying that 'marijuana remains an illegal drug under the Controlled Substances Act and that
Iederal prosecutors will continue to aggressively enIorce this statute. DOJ identiIied eight
enIorcement areas that Iederal prosecutors should prioritize. These include:
68

! preventing the distribution oI marijuana to minors;
! preventing revenue Irom the sale oI marijuana Irom going to criminal enterprises,
gangs, and cartels;
! preventing the diversion oI marijuana Irom states where it is legal under state law
in some Iorm to other states;
! preventing state-authorized marijuana activity Irom being used as a cover or
pretext Ior the traIIicking oI other illegal drugs or other illegal activity;
! preventing violence and the use oI Iirearms in the cultivation and distribution oI
marijuana;
! preventing drugged driving and the exacerbation oI other adverse public health
consequences associated with marijuana use;
! preventing the growing oI marijuana on public lands and the attendant public
saIety and environmental dangers posed by marijuana production on public
lands; and
! preventing marijuana possession or use on Iederal property.
Although the Cole memo does not speciIically address industrial hemp, because DOJ regards all
varieties oI the cannabis plant as 'marijuana and does not distinguish between low- and high-
THC varieties, the August 2013 guidance appears to cover industrial hemp production as well.
Accordingly, some are interpreting the guidance as allowing states to proceed to implement their
laws regulating and authorizing the cultivation oI hemp.
69

66
67
Letter providing guidance regarding marijuana enIorcement Irom Deputy U.S. Attorney General James Cole to all
U.S. States Attorneys, August 29, 2013, http://www.justice.gov/opa/pr/2013/August/13-opa-974.html.
68
Ibid.
69
Letter to interested parties Irom Joe Sandler, Counsel Ior Vote Hemp, November 13, 2013.

In November 2013, in response to a letter to Representative Earl Blumenauer, DOJ oIIicials in
Oregon clariIied that since 'industrial hemp` is marijuana, under the CSA, these eight
enIorcement priorities apply to hemp just as they do Ior all Iorms oI cannibis and that 'Iederal
prosecutors will remain aggressive when it comes to protecting these eight priorities.
70

Farm Bi!! and Othcr Fcdcra! Laws
2014 Farm Bi!!
The 113
th
Congress considered various changes to U.S. policies regarding industrial hemp during
the omnibus Iarm bill debate.
71
The Agricultural Act oI 2014 ('Iarm bill, P.L. 113-79, 7606)
provides that certain research institutions and state departments oI agriculture may grow
industrial hemp, as part oI an agricultural pilot program, iI allowed under state laws where the
institution or state department oI agriculture is located. The Iarm bill also established a statutory
deIinition oI 'industrial hemp as 'the plant Cannabis sativa L. and any part oI such plant,
whether growing or not, with a delta-9 tetrahydrocannabinol concentration oI not more than 0.3
percent on a dry weight basis.
72
The provision was included as part oI the research title oI the
law. The provision did not include an eIIective date that would suggest any kind oI program
rollout, and there appears to be nothing in the conIerence report or bill language to suggest that
the states might not be able to immediately initiate action on this provision.
This provision was adopted when Representatives Polis, Massie, and Blumenauer introduced an
amendment to the House version oI the Iarm bill (H.R. 1947, the Federal Agriculture ReIorm and
Risk Management Act oI 2013) during Iloor debate on the bill. The amendment (H.Amdt. 208)
was to allow institutions oI higher education to grow or cultivate industrial hemp Ior the purpose
oI agricultural or academic research, and applied to states that already permit industrial hemp
growth and cultivation under state law. The amendment was adopted by the House oI
Representatives. Although the Iull House ultimately voted to reject H.R. 1947, similar language
was included as part oI a subsequent revised version oI the House bill (H.R. 2642), which was
passed by the Iull House.
In the Senate, Senators Wyden, McConnell, Paul, and Merkley introduced an amendment to the
Senate version oI the Iarm bill (S. 954, the Agriculture ReIorm, Food and Jobs Act oI 2013). The
amendment (S.Amdt. 952) would have amended the CSA to exclude industrial hemp Irom the
deIinition oI marijuana. The amendment was not adopted as part oI the Senate-passed Iarm bill.
During conIerence on the House and Senate bills, the House provision was adopted with
additional changes. The enacted law expands the House bill provision to allow both certain
research institutions and also state departments oI agriculture to grow industrial hemp, as part oI
an agricultural pilot program, iI allowed under state laws where the institution or state department
oI agriculture is located.

70
Letter to Representative Earl Blumenauer, Irom S. Amanda Marshall, U.S. Attorney, District oI Oregon, November
7, 2013.
71
For inIormation on the Iarm bill, see CRS Report R43076, The 2014 Farm Bill (P.L. 113-79). Summarv and Side-bv-
Side.
72
P.L. 113-79 (7606).

FY2015 Cnmmcrcc-Justicc-5cicncc (C-J-5) Apprnpriatinns
As the Iarm bill did not include an eIIective date distinct Irom the date oI enactment, several
states responded by making immediate plans to initiate new hemp pilot projects.
The state oI Kentucky, Ior example, announced plans Ior several pilot projects through the
Kentucky Department oI Agriculture.
73
However, in May 2014, the Department`s shipment oI 250
pounds oI imported hemp seed Irom Italy was blocked by U.S. Customs oIIicials at Louisville
International Airport. DEA oIIicials contend the action was warranted since the 'importation oI
cannabis seeds continues to be subject to the Controlled Substances Imports and Export Act
(CSIEA)
74
and to the implementing regulations, which restrict persons Irom importing viable
cannabis seed unless the person is registered with DEA and has obtained the necessary Schedule I
research permit, among other requirements. To Iacilitate release oI the hemp seeds, the Kentucky
Department oI Agriculture Iiled a lawsuit in U.S. District Court against the DEA, the Justice
Department, U.S. Customs and Border Protection (CBP), and the U.S. Attorney General.
75
In the
lawsuit, the Department contends that its eIIorts to grow industrial hemp are authorized under
both state and Iederal law, and that the DEA should not seek to impose 'additional requirements,
restrictions, and prohibitions on hemp production beyond requirements in the 2014 Iarm bill, or
otherwise interIere with its delivery oI hemp seeds. Although Kentucky`s seeds were eventually
released and planted,
76
these circumstances have resulted in uncertainty Ior U.S. hemp growers.
To avoid Iuture similar obstacles to Iully implementing the hemp provision oI the Iarm bill,
Congress acted swiItly. Both the House and Senate FY2015 Commerce-Justice-Science (CJS)
appropriations bills contain provisions to block Iederal law enIorcement authorities Irom
interIering with state agencies and hemp growers, as well as to counter eIIorts to obstruct
agricultural research. Both the House-passed and Senate committee-reported bills (H.R. 4660; S.
2437) contain a provision that 'none oI the Iunds made available to the U.S. Department oI
Justice (DOJ) and the Drug EnIorcement Agency (DEA) are to 'be used in contravention oI the
2014 Iarm bill provision regarding industrial hemp.
77
The House bill Iurther provides that no
Iunds may be used to prevent a state Irom implementing its own state laws that 'authorize the
use, distribution, possession, or cultivation oI industrial hemp as deIined in the 2014 Iarm bill
provision.
78

Othcr Fcdcra! Actinns Invn!ving U5DA
In 1994, President Clinton issued Executive Order 12919, entitled 'National DeIense Industrial
Resources Preparedness, which was intended to strengthen the U.S. industrial and technology

73
See, Ior example, Kentucky Department oI Agriculture, 'Industrial Hemp Program, http://www.kyagr.com/
marketing/hemp-pilot.html.
74
Letter Irom Joseph T. Rannazzisi, Deputy Assistant Administrator, DEA, to Luke Morgan, Counsel Ior Kentucky
Department oI Agriculture, May 13, 2014.
75
Kentucky Department oI Agriculture v. U.S. Drug EnIorcement Agency, U.S. Customs and Border Protection, U.S.
Justice Department, and Eric Holder (Western District oI Kentucky, Louisville Division), May 2014,
http://media.kentucky.com/smedia/2014/05/14/16/44/X9Fs3.So.79.pdI.
76
J. Patton, 'Hemp seeds planted in Central Kentucky Ior Iirst time in decades, Lexington Herald-Ledger, May 27,
2014.
77
H.R. 4660, 560; S. 2437 220.
78
H.R. 4660, 557.

base Ior meeting national deIense requirements. The order included hemp among the essential
agricultural products that should be stocked Ior deIense preparedness purposes.
79
Some hemp
supporters have argued that the executive order gives hemp a renewed value as a strategic crop
Ior national security purposes, in line with its role in World War II.
80

USDA has supported research on alternative crops and industrial uses oI common commodities
since the late 1930s. Some alternative crops have become established in certain parts oI the
United StateskenaI (Ior Iiber) in Texas, jojoba (Ior oil) in Arizona and CaliIornia, and amaranth
(Ior nutritious grain) in the Great Plains states. Many have beneIits similar to those ascribed to
hemp, but are not complicated by having a psychotropic variety within the same species.
The Critical Agricultural Materials Act oI 1984 (P.L. 98-284, 7 U.S.C. 178) supports the
supplemental and alternative crops provisions oI the 1985 and 1990 omnibus Iarm acts and other
authorities, and Iunds research and development on alternative crops at USDA and state
laboratories. In 2010, USDA recommended $1.083 million Ior programs under the act.
81
In
addition, Section 1473D oI the National Agricultural Research, Extension, and Teaching Policy
Act oI 1977 (NARETPA, 7 U.S.C. 3319d(c)) authorizes USDA to make competitive grants
toward the development oI new commercial products derived Irom natural plant material Ior
industrial, medical, and agricultural applications.
82
In 2010, USDA recommended $835,000 Ior
the program.
83
To date, these authorities have not been used to develop hemp cultivation and use.
5tatc Laws
Since the mid-1990s, there has been a resurgence oI interest in the United States in producing
industrial hemp. Farmers in regions oI the country that are highly dependent upon a single crop,
such as tobacco or wheat, have shown interest in hemp`s potential as a high-value alternative
crop, although the economic studies conducted so Iar paint a mixed proIitability picture.
Following passage oI the 2014 Iarm bill provision allowing Ior growing hemp under certain
circumstances (see '2014 Farm Bill), several states have quickly been adopting new state laws
to allow Ior cultivation. The status oI state actions regarding hemp is changing rapidly; resources
Ior updated inIormation include the National ConIerence oI State Legislatures (NCSL) and the
advocacy group Vote Hemp.
84

Beginning around 1995, an increasing number oI state legislatures began to consider a variety oI
initiatives related to industrial hemp. Most oI these have been resolutions calling Ior scientiIic,
economic, or environmental studies, and some are laws authorizing planting experimental plots
under state statutes. Nonetheless, the actual planting oI hemp, even Ior state-authorized
experimental purposes, remains regulated by the DEA under the Controlled Substances Act.

79
Hemp is included under the category oI 'Iood resources, which it deIined to mean, in part, 'all starches, sugars,
vegetable and animal or marine Iats and oils, cotton, tobacco, wool, mohair, hemp, Ilax, Iiber and other materials, but
not any such material aIter it loses its identity as an agricultural commodity or product.
80
J. B. Kahn, 'Hemp ... Why Not? Berkeley Electronic Press (bepress) Legal Series, Paper 1930, 2007.
81
USDA`s 2011 Explanatory Notes, http://www.obpa.usda.gov/17niIa2011notes.pdI.
82
For inIormation, see USDA, http://www.csrees.usda.gov/Iunding/rIas/pdIs/10altcrops.pdI.
83
See USDA`s 2011 Explanatory Notes, http://www.obpa.usda.gov/17niIa2011notes.pdI.
84
NCSL, State Industrial Hemp Statutes (http://www.ncsl.org/research/agriculture-and-rural-development/state-
industrial-hemp-statutes.aspx); Vote Hemp (http://www.votehemp.com/state.html#2014).

As oI June 2014, nearly 30 states or territories have reportedly introduced legislation Iavorable to
hemp cultivation, and 20 states have already passed such legislation.
85
A rough summary oI
current state legislative actions regarding industrial hemp is as Iollows.
! Several states (between 15 to 18 states, depending on the source) have laws to
provide Ior industrial hemp production as described by the 2014 Iarm bill
provision: CaliIornia, Colorado, Hawaii, Indiana, Kentucky, Maine, Minnesota,
Montana, Nebraska, New York, North Dakota, Oregon, South Carolina,
Tennessee, Utah, Vermont, Washington, and West Virginia.
! Several states (28) and Puerto Rico have introduced or carried over industrial
hemp legislation: Alabama, Arizona, CaliIornia, Colorado, Connecticut,
Delaware, Hawaii, Illinois (carried over Irom 2013), Indiana, Kentucky,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Nebraska, New Hampshire (carried over Irom 2013), New Jersey (carried over
Irom 2013 and new bill introduction as well), New York, Oklahoma, South
Carolina, South Dakota, Tennessee, Utah, Washington (two bills were carried
over Irom 2013), West Virginia, and Wisconsin.
! Several states have passed hemp resolutions (CaliIornia, Colorado, Illinois,
Maine, Montana, New Hampshire, New Mexico, North Dakota, Oregon,
Vermont, and Virginia).
! Several states have passed bills creating commissions or authorizing research
(Hawaii, Kentucky, and Maryland).
! Several states have passed hemp study bills (Arkansas, Illinois, Maine,
Minnesota, New Mexico, North Carolina, North Dakota, and Vermont). Other
states have done studies without a legislative directive.
Among the types oI current state policies are the Iollowing:
86
deIining industrial hemp based on
the percentage oI tetrahydrocannabinol it contains; authorizing the growing and possessing oI
industrial hemp; requiring state licensing oI industrial hemp growers; promoting research and
development oI markets Ior industrial hemp; excluding industrial hemp Irom the deIinition oI
controlled substances under state law; and establishing a deIense to criminal prosecution under
drug possession or cultivation
Although many states have established programs under which a Iarmer may be able to grow
industrial hemp under certain circumstances, a grower would still need to obtain a DEA permit
and abide by the DEA`s strict production controls. This relationship has resulted in some high-
proIile cases, wherein growers have applied Ior a permit but DEA has not approved (or denied) a
permit to grow hemp, even in states that authorize cultivation under state laws. Ongoing cases
involve attempts to grow hemp under state law in North Dakota, Montana, Vermont, and other
states. DEA permits to grow hemp have been issued to some university researchers and to the
Hawaii Industrial Hemp Research Program.
87

85
CRS using inIormation Irom NCSL and Vote Hemp. InIormation Ior some states on these two websites oItentimes
does not agree.
86
NCSL, State Industrial Hemp Statutes (http://www.ncsl.org/research/agriculture-and-rural-development/state-
industrial-hemp-statutes.aspx).
87
CRS communication with Vote Hemp representatives, July 24, 2013.

For example, changes to Colorado`s state laws in November 2012 now allow Ior industrial hemp
cultivation. Industrial hemp was reported as being grown in Colorado in 2013.
88
However,
growers and state authorities continue to Iace a number oI challenges implementing Colorado`s
law, including sampling, registration and inspection, seed availability and sourcing, disposition oI
non-complying plants, and law enIorcement concerns, as well as production issues such as hemp
agronomics, costly equipment, and limited manuIacturing capacity, among other grower and
processor concerns.
89
It also remains unclear how Iederal authorities will respond to production in
states where state laws permit growing and cultivating hemp.
In November 2012, state authorities in Colorado wrote a letter to DOJ requesting clariIication
about how Iederal enIorcement authorities might respond to its newly enacted laws and
Iorthcoming regulations.
90
Since Iederal law regards all varieties oI the cannabis plant as
'marijuana, many regard DOJ`s August 2013 guidance as also likely applicable to the regulation
oI industrial hemp (see also '2013 DEA Guidance Outlined in 'Cole Memo).
91
In November
2013, Colorado`s State Department oI Agriculture oIIicials wrote to the U.S. Department oI
Agriculture requesting clariIication regarding the cultivation oI industrial hemp speciIically.
92

In September 2013, Representative Blumenauer sent a letter to Oregon state oIIicials urging them
to implement that state`s hemp laws.
93
In response, DOJ oIIicials in Oregon indicated that they do
not intend to interIere with their state`s hemp production as long as it is well-regulated and
subject to enIorcement.
94
Some now regard that correspondence as Iurther indicative oI how
Iederal authorities might respond to production in states where state laws permit growing and
cultivating hemp.
95

Despite these developments, in the past there has been ongoing tension between Iederal and state
authorities over state hemp policies. AIter passing its own state law authorizing industrial hemp
production in 1999,
96
researchers in North Dakota repeatedly applied Ior, but did not receive, a
DEA permit to cultivate hemp Ior research purposes in the state.
97
Also in 2007, two North
Dakota Iarmers were granted state hemp Iarming licenses and, in June 2007, Iiled a lawsuit in

88
S. Raabe, 'First major Hemp Crop in 60 Years is Planted in Southeast Colorado, Denverpost.com, May 13, 2013;
also see E. Hunter, 'Industrial Hemp in Colorado, November 17 (presentation at the 2013 HIA conIerence).
89
R. Carleton, 'Regulating Industrial Hemp: The Colorado Experience, February 3, 2013 (presentation at the 2014
National Association oI State Department oI Agriculture (NASDA) winter meeting); and E. Hunter, 'Industrial Hemp
in Colorado, November 17, 2013 (presentation at the 2013 HIA conIerence).
90
Letter to Eric Holder, Jr., U.S. Attorney General, Irom the Governor and Attorney General oI the State oI Colorado,
November 13, 2012.
91
See discussion in '2013 DEA Guidance Outlined in 'Cole Memo. Letter to interested parties Irom Joe Sandler,
Counsel Ior Vote Hemp, November 13, 2013.
92
Letter to Tom Vilsack, Secretary oI Agriculture, Irom the Commissioner oI the Colorado Department oI Agriculture,
November 13, 2013.
93
Letter Irom Representative Earl Blumenauer to Oregon Department oI Agriculture and State Board oI Agriculture
oIIicials, September 17, 2013.
94
Letter to Representative Earl Blumenauer, Irom S. Amanda Marshall, U.S. Attorney, District oI Oregon, November
7, 2013. See also N. Crombie, 'U.S. Rep. Earl Blumenauer urges Oregon to implement industrial hemp law, The
Oregonian, September 18, 2013.
95
CRS communication with representatives oI Vote Hemp, Inc., January 2014.
96
The North Dakota Department oI Agriculture issued Iinal regulations in 2007 on licensing hemp production. For
inIormation on the state`s requirements, see http://www.agdepartment.com/Programs/Plant/HempFarming.htm.
97
See, Ior example, letter Irom North Dakota State University to the DEA, July 27, 2007.

U.S. District Court (North Dakota) seeking 'a declaratory judgment that the CSA 'does not
prohibit their cultivation oI industrial hemp pursuant to their state licenses.
98
The case was
dismissed in November 2007.
99
The case was appealed to the U.S. Court oI Appeals (Eighth
Circuit), but was again dismissed in December 2009.
100
They Iiled an appeal in May 2010.
101

Similarly, Montana passed its state law authorizing hemp production in 2001. In October 2009,
Montana`s Agriculture Department issued its Iirst state license Ior an industrial hemp-growing
operation in the state. Media reports indicate that the grower does not intend to request a Iederal
permit. Some argue that this case could pose a potential challenge to DEA oI whether it is willing
to override the state`s authority to allow Ior hemp production in the state, as well as a test oI
state`s rights.
102

Ongning Lcgis!ativc Activity
Industria! Hcmp Farming Act
Other introduced legislation would provide Ior even greater opportunities Ior commercial
cultivation oI industrial hemp in the United States.
The Industrial Hemp Farming Act was Iirst introduced in the 109
th
Congress by Iormer
Representative Ron Paul, and was reintroduced in subsequent legislative sessions (H.R. 1831,
112
th
Congress; H.R. 1866, 111
th
th
th

Congress). In the 112
th
Congress, Senator Ron Wyden introduced S. 3501 in the Senate.
103

In the 113
th
Congress, the Industrial Hemp Farming Act oI 2013 (Massie/H.R. 525; Wyden/S.
359) is intended to Iacilitate the possible commercial cultivation oI industrial hemp in the United
States. The bill would amend Section 102 oI the Controlled Substances Act (21 U.S.C. 802(16))
to speciIy that the term 'marijuana does not include industrial hemp, which the bill would deIine
based on its content oI delta-9 tetrahydrocannabinol (THC), marijuana`s primary psychoactive
chemical. Such a change could remove low-THC hemp Irom being covered by the CSA as a
controlled substance and subject to DEA regulation, thus allowing Ior industrial hemp to be
grown and processed under some state laws. II enacted, these bills could remove low-THC hemp
Irom being covered by the CSA as a controlled substance and subject to DEA regulation. The bill
could grant authority to any state permitting industrial hemp production and processing to

98
David Monson and Wavne Hauge v. Drug Enforcement Administration and United States Department of Justice,
Complaint Ior Declaratory Judgment, U.S. District Court Ior the District oI North Dakota, June 18, 2007. For an
overview, see Vote Hemp Inc. website: http://www.votehemp.com/legalcasesND.html#overview.
99
Monson v. DEA, 522 F. Supp. 2d 1188 (D.N.D. 2007).
100
Monson v. DEA, 589 F.3d 952 (8
th
Cir. 2009).
101
S. Roesler, 'ND Iarmers Iile another industrial hemp appeal in district court, Farm & Ranch Guide, June 4, 2010.
102
M. Brown, 'First license issued to Montana hemp grower, Missoulian, October 27, 2009.
103
Previous versions oI the bill diIIer. Section 3 oI the 2009 bill would apply when a state has an industrial hemp
regulatory scheme, whereas the 2011 bills would apply whenever state law permits 'making industrial hemp, which a
state might do by exempting hemp making Irom its controlled substance regulatory scheme. Section 3 oI the 2009 bill
would have aIIorded state oIIicials 'exclusive authority to construe the proposed hemp exclusion Irom the deIinition
oI marijuana (amending 21 U.S.C. 802(16)(B)), whereas the 2011 bills would include within the proposed industrial
hemp exclusion (amending 21 U.S.C. 802(57)) any industrial hemp grown or possessed in accordance with state law
relating to making industrial hemp. For more inIormation, contact Charles Doyle, CRS attorney, 7-6968.

determine whether any such cannabis plants met the limit on THC concentration as set Iorth in
the CSA. In any criminal or civil action or administrative proceeding, the state`s determination
may be conclusive and binding. Some in Congress believe that industrial hemp production could
result in economic and employment gains in some states and regions.
104

Grnups 5uppnrting/Oppnsing Furthcr Lcgis!atinn
In addition to groups such as HIA and Vote Hemp Inc. that are actively promoting reintroducing
hemp as a commodity crop in the United States, some key agricultural groups also support U.S.
policy changes regarding industrial hemp. For example:
! The National Farmers Union (NFU) updated its 2013 Iarm policy regarding
hemp to urge the President, Attorney General, and Congress to 'direct the U.S.
Drug EnIorcement Administration (DEA) to reclassiIy industrial hemp as a non-
controlled substance and adopt policy to allow American Iarmers to grow
industrial hemp under state law without aIIecting eligibility Ior USDA
beneIits.
105
Previously NFU`s policy advocated that the DEA 'diIIerentiate
between industrial hemp and marijuana and adopt policy to allow American
Iarmers to grow industrial hemp under state law without requiring DEA
licenses.
106

! The National Association oI State Departments oI Agriculture (NASDA)
'supports revisions to the Iederal rules and regulations authorizing commercial
production oI industrial hemp, and has urged USDA, DEA, and the OIIice oI
National Drug Control Policy to 'collaboratively develop and adopt an oIIicial
deIinition oI industrial hemp that comports with deIinitions currently used by
countries producing hemp. NASDA also 'urges Congress to statutorily
distinguish between industrial hemp and marijuana and to direct the DEA to
revise its policies to allow USDA to establish a regulatory program that allows
the development oI domestic industrial hemp production by American Iarmers
and manuIacturers.
107

! The National Grange voted in 2009 to support 'research, production, processing
and marketing oI industrial hemp as a viable agricultural activity.
108

! Regional Iarmers` organizations also have policies regarding hemp. For example,
the North Dakota Farmers Union (NDFU), as part oI its Iederal agricultural
policy recommendations, has urged 'Congress to legalize the production oI
industrial hemp.
109
The Rocky Mountain Farmers Union (RMFU) has urged

104
See, Ior example, B. Schreiner, 'Senate Committee Approves Hemp Legislation, Associated Press, February 11,
2013; also press release oI Senate Minority Leader, Mitch McConnell, 'Industrialized Hemp Will Help Spur Economic
Growth and Create Jobs in Kentucky, January 31, 2013.
105
NFU, 'Policy oI the National Farmers Union, March 2-5, 2013.
106
NFU, 'National Farmers Union Adopts New Policy on Industrial Hemp, March 22, 2010. Also see NFU, 'Policy
oI the National Farmers Union, enacted by delegates to the 108
th
annual convention, Rapid City, SD, March 14-16,
2010.
107
NASDA, 'New Uses oI Agricultural Products, 2010, http://www.nasda.org/cms/7196/9017/9350/7945.aspx.
108
The National Grange, 'Legislative Policies, http://www.nationalgrange.org/legislation/policy/policyag.htm; also
see The National Grange, 'Hemp Policy, http://www.grangehemppolicy.inIo/.
109
NDFU, '2010 Program oI Policy & Action, p. 8; also see http://www.ndIu.org.

'Congress and the USDA to re-commit and Iully Iund research into alternative
crops and uses Ior crops including industrial hemp; also, they 'support the
decoupling oI industrial hemp Irom the deIinition oI marijuana under the CSA
and 'demand the President and the Attorney General direct the U.S. Drug
EnIorcement Agency (DEA) to diIIerentiate between industrial hemp and
marijuana and adopt a policy to allow American Iarmers to grow industrial hemp
under state law without requiring DEA licenses, to 'legalize the production oI
industrial hemp as an alternative crop Ior agricultural producers.
110

! In CaliIornia, ongoing eIIorts to revise the deIinition oI marijuana to exclude
'industrial hemp (SB 566) are supported by the State`s SheriIIs` Association.
111

Previous eIIorts in 2011 to establish a pilot program to grow industrial hemp in
selected counties were supported by the county Iarm bureau and two sheriII`s
oIIices (although the bill, SB 676, was later vetoed by the state`s governor).
112

Despite support by some, other groups continue to oppose policy changes regarding cannabis. For
example, the National Alliance Ior Health and SaIety, as part oI Drug Watch International, claims
that proposals to reintroduce hemp as an agricultural crop are merely a strategy by 'the
international pro-drug lobby to legalize cannabis and other illicit substances.
113
The CaliIornia
Narcotic OIIicer`s Association claims that allowing Ior industrial hemp production would
undermine state and Iederal enIorcement eIIorts to regulate marijuana production, since they
claim the two crops are not distinguishable through ground or aerial surveillance, but would
require costly and time-consuming lab work to be conducted.
114
This group also claims that these
similarities would create an incentive to use hemp crops to mask illicit marijuana production,
since marijuana is such a lucrative cash crop.
115
Concerns about the potential linkages to the
growing and use oI illegal drugs are also expressed by some parent and community organizations,
such as Drug Free America Foundation, Inc. and PRIDE Inc.
116

Given the DEA`s current policy positions and perceived DEA opposition to changing its current
policies because oI concerns over how to allow Ior hemp production without undermining the
agency`s drug enIorcement eIIorts and regulation oI the production and distribution oI marijuana,
hemp proponents say that Iurther policy changes regarding industrial hemp are likely not
Iorthcoming absent congressional legislative action.
Cnnc!uding Rcmarks
Hemp production in the United States Iaces a number oI obstacles in the Ioreseeable Iuture. The
main obstacles Iacing this potential market are U.S. government drug policies and DEA concerns

110
RMFU, 'Policy 2010, http://www.rmIu.org/pdIs/RMFUPolicy10.pdI, p. 6, pp. 15-16, and p. 24.
111
Letter Irom the CaliIornia State SheriII`s Association to Chairwoman Cathleen Galgiani oI the State Senate
Agriculture Committee, March 21, 2013.
112
Letters oI support Ior SB 678 to CaliIornia State Senator, Mark Leno, Irom the Imperial County Farm Bureau (June
16, 2011), OIIice oI SheriII, Kings County (July 19, 2011), and OIIice oI SheriII, Kern County (July 21, 2011).
113
See, Ior example, Drug Watch International, 'Position Statement on Hemp (Cannabis sativa L.), November 2002.
114
Letter Irom the CaliIornia Narcotic OIIicers` Association to Governor Arnold Schwarzenegger, September 18, 2007.
115
CRS conversation with John Coleman, August 22, 2011.
116
InIormation provided to CRS by Jeanette McDougal, National Alliance Ior Health and SaIety, August 22, 2011.

about the ramiIications oI U.S. commercial hemp production. These concerns are that commercial
cultivation could increase the likelihood oI covert production oI high-THC marijuana,
signiIicantly complicating DEA`s surveillance and enIorcement activities and sending the wrong
message to the American public concerning the government`s position on drugs. DEA oIIicials
and a variety oI other observers also express the concern that eIIorts to legalize hempas well as
those to legalize medical marijuanaare a Iront Ior individuals and organizations whose real aim
is to see marijuana decriminalized.
117

Hemp production in the United States also Iaces competition Irom other global suppliers. The
world market Ior hemp products remains relatively small, and China, as the world`s largest hemp
Iiber and seed producer, has had and likely will continue to have major inIluence on market prices
and thus on the year-to-year proIits oI producers and processors in other countries.
118
Canada`s
head start in the North American market Ior hemp seed and oil also would likely aIIect the
proIitability oI a start-up industry in the United States.
Nevertheless, the U.S. market Ior hemp-based products has a highly dedicated and growing
demand base, as indicated by recent U.S. market and import data Ior hemp products and
ingredients, as well as market trends Ior some natural Ioods and body care products. Given the
existence oI these small-scale, but proIitable, niche markets Ior a wide array oI industrial and
consumer products, commercial hemp industry in the United States could provide opportunities
as an economically viable alternative crop Ior some U.S. growers.

117
For more inIormation on legislative and executive branch actions concerning illegal drugs, see CRS Report
RL32352, War on Drugs. Reauthori:ation and Oversight of the Office of National Drug Control Policv. For
inIormation on issues pertaining to medical marijuana, see CRS Report CRS Report RL33211, Medical Marifuana.
Review and Analvsis of Federal and State Policies.
118
T. R. Fortenbery and M. Bennett, 'Opportunities Ior Commercial Hemp Production, Review of Agricultural
Economics, vol. 26, no. 1, Spring 2004, pp. 97-117. The time period covered in this study ends with the year 2000.

Appcndix. Listing nI 5c!cctcd Hcmp 5tudics
Below is a listing oI reports and studies, ranked by date (beginning with the most recent).
! University oI Kentucky, Department oI Agricultural Economics, Economic
Considerations for Growing Industrial Hemp. Implications for Kentuckvs
Farmers and Agricultural Economv, July 2013, http://www2.ca.uky.edu/
cmspubsclass/Iiles/EconomicConsiderationsIorGrowingIndustrialHemp.pdI.
! C. A. Kolosov, 'Regulation oI Industrial Hemp under the Controlled Substances
Act UCLA Law Review, vol. 57, no. 237, October 2009,
http://uclalawreview.org/pdI/57-1-5.pdI.
! Manitoba Agriculture, National Industrial Hemp Strategv, March 2008 (prepared
Ior Food and Rural Initiative Agriculture and Agri-Food Canada).
! Reason Foundation, 'Illegally Green: Environmental Costs oI Hemp
Prohibition, Policy Study 367, March 2008, http://www.reason.org/ps367.pdI.
! Agriculture and Agri-Food Canada, Canadas Industrial Hemp Industrv, March
2007, http://www.agr.gc.ca/misb/spcrops/sc-cse.php?pagehemp-chanvre.
! Maine Agricultural Center, An Assessment of Industrial Hemp Production in
Maine, January 2007, http://www.mac.umaine.edu/.
! N. Cherrett et al., 'Ecological Footprint and Water Analysis oI Cotton, Hemp and
Polyester, Stockholm Environment Institute, 2005, http://www.sei-
international.org/mediamanager/documents/Publications/Future/
cotton20hemp20polyester20study20sei20and20bioregional20and
20wwI20wales.pdI.
! T. R. Fortenbery and M. Bennett, 'Opportunities Ior Commercial Hemp
Production, Applied Economics Perspectives and Policv, 26(1): 97-117, 2004.
! E. Small and D. Marcus, 'Hemp: A New Crop with New Uses Ior North
America, In: Trends in New Crops and New Uses, 2002,
http://www.hort.purdue.edu/newcrop/ncnu02/v5-284.html.
! T. R. Fortenbery and M. Bennett, 'Is Industrial Hemp Worth Further Study in the
U.S.? A Survey oI the Literature, StaII Paper No. 443, July 2001,
http://ageconsearch.umn.edu/bitstream/12680/1/stpap443.pdI.
! J. Bowyer, 'Industrial Hemp (Cannabis sativa L.) as a Papermaking Raw
Material in Minnesota: Technical, Economic and Environmental Considerations,
Department oI Wood & Paper Science Report Series, May 2001.
! K. Hill, N. Boshard-Blackey, and J. Simson, 'Legislative Research Shop:
Hemp, University oI Vermont, April 2000, http://www.uvm.edu/~vlrs/doc/
hemp.htm
! USDA, Economic Research Service, Industrial Hemp in the United States. Status
and Market Potential, AGES001E, January 2000, http://www.ers.usda.gov/
publications/ages001e/ages001em.pdI.

! M. J. Cochran, T. E. Windham, and B. Moore, 'Feasibility oI Industrial Hemp
Production in Arkansas, University oI Arkansas, SP102000, May 2000.
! D. G. Kraenzel et al. 'Industrial Hemp as an Alternative Crop in North Dakota,
AER 402, North Dakota State University, Fargo, July 1998,
http://ageconsearch.umn.edu/handle/23264.
! E. C. Thompson et al., Economic Impact of Industrial Hemp in Kentuckv,
University oI Kentucky, July 1998.
! D. T. Ehrensing, Feasibilitv of Industrial Hemp Production in the United States
Pacific Northwest, SB 681, Oregon State University, May 1998,
http://extension.oregonstate.edu/catalog/html/sb/sb681/.

Authnr Cnntact InInrmatinn

Renee Johnson
Specialist in Agricultural Policy
rjohnsoncrs.loc.gov, 7-9588

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