Hemp Notebook: Worldwide Hemp Woes

Why the plant won’t achieve its enormous global market potential until it’s granted trade protections afforded to other crops

By Kristen Nichols

President Trump has been talking a lot about tariffs and trade deals with other nations. Perfect timing! Hemp badly needs his help right now as the industry explodes – without the trade protections afforded to other crops.

Global opportunities abound in hemp. Companies already export oils, seeds and even CBD isolate with some success. A North Dakota seed producer, for example, is selling viable seed in Canada.

But legal uncertainty is keeping the American hemp industry from truly taking off. A tough-talking president who brags about striking favorable deals could be just what the U.S. hemp industry needs.

Hemp faces trade problems both ways, from importing and exporting.

The 2014 Farm Bill allows the importation of viable hemp seeds from other countries – but the law doesn’t extend agricultural trade protection to those seeds. The result? The United States has become a dumping ground for inferior hemp seed.

This is a huge problem for farmers taking a chance on newly legal hemp. With almost no options in most states for homegrown seed varieties, farmers are importing hemp seed licensed by the U.S. Drug Enforcement Administration, with no oversight from the U.S. Department of Agriculture (USDA).

The 1939 Federal Seed Act, which set purity standards and protects U.S. farmers from bum seeds, does not cover hemp. So, an unscrupulous seed producer somewhere in Europe who finds himself with a bunch of product that doesn’t meet the European Union’s standards no longer needs to throw out the seed. Instead, he can sell it to the United States, where no one is checking seed viability. The poor farmer who buys that inferior hemp seed has no recourse when his seeds don’t germinate, and U.S. agriculture regulators simply shrug and point out that hemp is a new and untested crop.

Exporting hemp is an even bigger problem. Producers say there’s an insatiable global market for American-grown CBD products derived from hemp, not marijuana. But U.S. Customs officials routinely seize cannabidiol products regardless of the source, leading producers to label exports as “hemp oil” or even vaguer names to avoid interception.

It’s an untenable system that leaves the United States at a huge disadvantage in global markets, where consumers want to know more about products they’re consuming. An unscrupulous U.S. producer, for example, could dump inferior CBD products abroad without violating any trade protocols – because none exist. That’s a threat to all American CBD producers. Meanwhile, Canada’s thriving hemp industry is overseen by the Canadian Food Inspection Agency – which is analogous to the USDA – giving seed importers and exporters in that country a distinct market advantage.

There’s a simple fix for hemp’s trade problems: Add USDA oversight to the hemp market, which can be done through an executive order or in the next Farm Bill. Better yet, Congress should remove hemp from the Controlled Substances Act to give the crop all the legal protections enjoyed by other crops. Trump could lead here, telling Republicans in Congress to give U.S. hemp the same trade swagger enjoyed by other American products. Hemp could give Trump his easiest win yet.

Kristen Nichols covers hemp for Marijuana Business Magazine. She can be reached at [email protected]