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Kentucky Says It's High Time for Hemp

An eccentric coalition of libertarians, environmentalists, and GOP lawmakers are promoting the virtues of the useful weed for rural and urban areas alike. But there’s one big legal hurdle.

RONA KOBELL -- 4:05 PM ET -- City Lab

Every weekday, Chad Rosen drives from his farm in rural New Castle, Kentucky, a 200-year-old town with fewer than 1,000 residents and five Baptist churches, to a squat manufacturing facility east of downtown Louisville. The 40-minute drive crosses Kentucky’s major red-blue divide: Where Rosen lives, in Henry County, 69 percent of his neighbors voted for Trump; only the state’s two largest cities, Louisville and Lexington, went for Hillary Clinton.

Rosen’s job represents a slender thread of economic connection that links those sides: the state’s nascent hemp industry. His company, Victory Hemp Foods, processes Kentucky’s newest cash crop into nutty oils, seeds, and protein powders. In three years, Rosen’s hemp-based product line has grown from a few stores to a shelf presence in 75 markets statewide, including Whole Foods, Kroger, and boutique nutritional shops.

He’s also the president of the Kentucky Hemp Industries Association, which helped to bring more than 300 entrepreneurs and farmers to Lexington in September for a national gathering of hemp businesses. (Disclosure: The Abell Foundation covered my expenses to attend this event, and also sponsored my work for this report.) Rosen leads a coalition of strange bedfellows that includes Sierra Club members, Tea Party enthusiasts, university researchers, and lawmakers from both parties who are trying to coax the industry out from decades of legal limbo. In July, Kentucky Congressman James Comer—a former state agriculture commissioner who ran and won on his pro-hemp record—and Rep. Thomas Massie, both Republicans, joined Colorado Democrat Jared Polis and Virginia Republican Bob Goodlatte to sponsor legislation removing hemp from the feds’ list of illegal Schedule 1 drugs, where it has resided, along with cocaine and heroin, since the Nixon Administration.

Like college basketball, bourbon, and thoroughbred horses, hemp seems to course through Kentucky’s bloodlines. Henry Clay grew it, back in the era when the hardy plant was used for thousands of products, from food and fuel to ropes, canvas, and medicine. Modern industrial hemp, which consumes less water than rival crops like cotton, can be used for an equally impressive range of products, including car dashboards, soaps, industrial absorbents, granola bars, and craft beer. Like marijuana, hemp is a strain of the cannabis plant, but it lacks the psychoactive chemical, THC, that provides weed’s high. The Marihuana Tax Act of 1937 helped make hemp cost-prohibitive to grow (though the government encouraged growers during the war years), and that situation worsened after the passage of the Controlled Substances Act in 1970.

Then, in 2014, the U.S. Farm Bill cracked open a legislative window: The new law allowed states to develop research programs for industrial hemp, sowing hopes of reviving the long-dormant industry. More than 30 states passed varying companion bills to enable state growing programs. The Bluegrass State embraced the opportunity: Farmers in Kentucky will grow close to 13,000 acres of industrial hemp in 2017, more than triple what it grew last year and surpassing every other state except Colorado.

Kentucky’s production is still only a fraction of its agricultural economy—even if state hemp fields tripled over what they were 2016, and the yields increased 50 percent, hemp would only be 3 percent of the agricultural market, according to University of Kentucky economist Will Snell. But in the country’s fifth-poorest state, where the opiate epidemic is rampant, the effort by lawmakers and the agriculture department to convert old tobacco farms to hemp production offers an economic ray of sunshine.

“What this industry does is give people an enormous amount of optimism, that there are solutions, and that we’re working on them instead of holding our hands up in despair,” Rosen said. “The beauty of this plant is that we are all aware of what is possible.”

Rosen argues that hemp’s promise extends beyond rural Kentucky: He and his fellow hemp processors have created close to 100 jobs in Louisville and Lexington, plus the ancillary benefits of contract labor for machinery repairs and parts. Hemp holds particular promise for places like Nashville, which has a few licensed growers already, and Asheville, near the epicenter of North Carolina’s furniture and textile industry. But the industry is hamstrung by hemp’s murky legal status: Farmers can grow it, but farm insurance bureaus won’t sell them crop insurance; companies can market it, but federally backed banks won’t lend them money.

Andrew Graves, a 7th generation hemp farmer who speaks with a buttery accent and lives outside of Lexington, has been working with tobacco farmers to re-establish the industry. He likens the nascent hemp industry to the craft brewery movement: Cities may consume the product, but country folks grow the raw materials. “This hemp crop is the first one we’ve had in 60 years, and all of the benefits from it will be re-introduced into our economy,” Graves says.

Right now, imports from Canada, China, and France make up most current U.S. hemp sales, worth $600 million last year, according to the Congressional Research Service. Hemp boosters like Graves want the homegrown stuff to dominate that market.“This recovery is well within our borders, and we are the best salesmen.”

For aspiring hemp startups, the plant’s association with illegal marijuana can cause no end of headaches. Chad Wilson owns Green Remedy, a Louisville company that sells CBD oil, an extract of the hemp plant said to have healing properties. Whether CBD is legal to ship and possess everywhere is a topic of debate, and a lawsuit: the Hemp Industries Association has sued the Drug Enforcement Administration over the issue.

One day, Wilson’s bank stopped issuing him credit, he says, because of the legal gray area regarding hemp on a federal level, despite its legality in Kentucky. Years before, at a Bowling Green flea market, police came at his stall with guns drawn, because they’d heard he was selling a pot brownie. (It turned out to be a hemp nutritional bar.) Wilson, who calls himself a “hemp preacher,” understands the cannabis confusion—to a point. “All my life, all I ever heard was, ‘Stay away from the devil’s lettuce—be a good boy,” he says. “But now, with this plant, we have the ability to lift our state out of poverty. And we shouldn’t be battling our government to bring an industry to life on a plant that has no psychoactive effect.”

Representative Comer, who’s the only farmer out of 60 freshmen elected to Congress this year, agrees—he calls hemp “the greatest issue I’ve ever been a part of, and one that really is bipartisan.” The former state legislator is trying to broaden his hemp coalition across the red-blue, rural-urban divide. That means spends a lot of time talking about economic development in cities. “This is an issue that can really unite America,” he says. “If you are an urban legislator, you want to see growth in rural America.”

Kentucky’s current Agriculture Commissioner, Ryan Quarles, also finds himself talking about how hemp can bring jobs to Louisville and Lexington. “There is an economic development aspect to this crop,” he says. He wants hemp growers and producers to get the same legal treatment as the state’s distilleries and wineries and craft breweries. “The last thing you want when you are trying to have a start-up business is confusion in the marketplace.”

The Drug Enforcement Administration, however, has long resisted efforts to fully legalize hemp, in part because hemp could be used to hide marijuana plants (though the two sides of the cannabis family do not grow well together). And some state agriculture departments have bristled at the costs of regulating a new plant, which would need additional controls, such as labs to test for THC content. Attorney General Jeff Sessions has been vocal about his anti-marijuana views, but has not responded to questions about hemp.

With Kentucky’s two GOP senators, Rand Paul and Mitch McConnell, also backing the bill, hemp advocates are hopeful this Congress is ready end the weed’s long extralegal limbo. And if they do, Rosen promises, they’ll string a little bridge across the nation’s yawning political and geographic divide. “We put up these walls between us,” he says. “I don’t think they need to exist.”

https://www.citylab.com/environment/2017/10/kentucky-says-its-high-time-for-hemp/541920/