Canadian agribusiness group Kenex is to meet with federal agencies in the US next week to discuss the proposed ban on foods made from hemp. Kenex has been growing and processing hemp oil, seed and fibre products in Canada for distribution throughout the United States for the past five years, and has said it intends to sue the US government under the North American Free Trade Agreement (NAFTA) because of the proposed ban.
The company will meet representatives from the Departments of State, Justice, Treasury and Commerce, as well as from the Environmental Protection Agency, the Drug Enforcement Administration (DEA), the Office of National Drug Control Policy, the U.S. Customs Service and the Office of the United States Trade Representative.
The DEA announced in October last year that it planned to make hemp foods containing any traces of naturally-occurring tetrahydrocannabinol (THC), the active ingredient found in marijuana, immediately illegal under the Controlled Substances Act (CSA) of 1970. Because trace THC does not pose any potential for abuse as a drug, the US Congress had exempted non-viable hemp seed and oil from control under the CSA in the same way as poppy seeds containing harmless trace opiates.
Kenex claims that it has grounds to sue the US government under the NAFTA agreement because the DEA's decision effectively prevents it from accessing American markets for its hemp food products. The company said it had the support of the Canadian government, which it quoted as saying: "There is no evidence that the effective ban on relevant Canadian food products on the US market is based on any risk assessment. Therefore, Canada objects to these measures."
Sterilised hemp seeds have been available in the US for decades and are recognised as an exceptional source of protein, omega-3 and omega-6 essential fatty acids (EFAs), Kenex said in a statement. It claimed that independent studies and reviews conducted by foreign governments had confirmed that trace THC found in the increasingly popular hemp foods cannot cause psychoactivity or other health effects, or result in a confirmed positive urine test for marijuana, even when unrealistically high amounts of hemp seed and oil are consumed daily.
Hemp food includes such diverse products as pretzels, tortilla chips, energy bars, waffles, bread, salad dressing, cereal, ice cream and even non-dairy milk.
Jean Laprise, president of Kenex said: "Since the DEA's new rule was announced, our US hemp seed and oil sales have virtually ceased. If the DEA is not stopped, we are finished. Tallying our current and future losses, we expect to be compensated at least $20 million under NAFTA."
The company said that the DEA's decision could be challenged under the NAFTA agreement for a number of reasons. Firstly, the agency did not provide any notice and opportunity to US trading partners or foreign companies to provide input into its ruling; secondly, it did not conduct a risk assessment or offer any science-based rationale for issuance of the rule; thirdly, it did not seek to minimize impact on trade; and finally it has not similarly regulated poppy seeds and their trace opiates.
Anita Roddick, an investor in Kenex and founder of The Body Shop, which markets a highly successful line of hemp oil based cosmetics, said: "The blind prejudice and bloody-mindedness of the DEA takes my breath away, especially when its actions are in direct contradiction to Congress. This is one instance when we have to invoke NAFTA. Without its protection, the future is bleak for hemp companies like Kenex."
Kenex is not alone in its bid to overturn the ruling, and says that a number of other Canadian firms are considering joining it in suing the US government. For example, Nature's Path Foods and Nature's Path Foods USA, which produce two of North America's best-selling natural granolas and waffles under their Hemp Plus sub-brands, project losing over $30 million in investments and future revenue, and will have to lay off employees, if the DEA's proposed ban becomes a reality.