Hemp to become the third cannabis industry legal in Oregon, illegal federally

Published Dec 20, 2014 at 12:01AM

SALEM ­— The Oregon Department of Agriculture is nearing a deadline to create rules for hemp growers that will give the state regulatory power over a third cannabis industry that will be legal in Oregon but illegal at the federal level.

The rule-making process has been slow, with newly written draft rules coming more than five years after the Legislature legalized hemp. A review of the rules shows the state still needs to make changes to ensure license holders are protected from federal interference if farmers get seeds in the ground in spring 2015.

After taking what advocates call a cautious approach to writing the hemp rules, the department now needs the Legislature to quickly change the hemp law, which as written threatens to stifle the industry in Oregon while other states have already had successful growing seasons.

“They just seem to be like a deer in the headlights,” Eric Steenstra, president of the hemp advocacy group Vote Hemp, said of the state’s slow movement on hemp.

Part of the reason for the state’s slow progress is the danger of licensing farmers to plant a crop that has been illegal federally since 1970 because it’s in the marijuana family. There has been a possibility that the federal government could bust farmers who grow hemp despite Oregon legalizing it.

Department of Agriculture officials say the delay stemmed from the uncertain federal landscape plus budget and staffing issues.

“Industrial Hemp is a new commodity for us, and a new program had to be developed around meeting state and federal restrictions,” said Ron Pence, manager of the state’s commodity inspection division. “And this has been challenging.”

Seventeen other states have legalized the plant, which has nearly no psychoactive ingredients and is grown for its durable fibers, oil, clothing and seeds.

While 23 states have legalized medical marijuana and four states have now voted to legalize recreational use, Congress has yet to change official drug policy. But it has added guidelines to help protect growers in hemp-friendly states.

Congressmen from Oregon and Kentucky added a provision to the 2014 Farm Bill that effectively separated hemp grown for research by agriculture departments and educational institutions from marijuana.

Lawmakers then put another provision into the $1.1 trillion spending bill that passed last week that prohibits the Drug Enforcement Administration and Justice Department from prosecuting farmers who grow hemp as extensions of the research programs.

But Oregon’s hemp laws, unlike those in Kentucky and Colorado, don’t designate the new program as a research extension of the Department of Agriculture. That omission could effectively leave farmers and businesses vulnerable to crackdowns by federal agencies.

“Our law doesn’t say commercial or research. It just says hemp cultivation,” said Courtney Moran, a Portland attorney who has followed the rule-making process. Moran added that the change can easily be fixed in the Legislature.

“Colorado’s law was research and commercial. Ours just doesn’t really distinguish,” Moran said, adding that she expects farmers will be able to plant this spring.

Colorado voters legalized hemp and recreational marijuana in 2012. It remains the only other state that regulates the three cannabis industries, including medical and recreational marijuana. But Colorado has been much quicker to grow a hemp industry after putting rules in place for an inaugural growing season in 2014.

The rush came with some setbacks, said Duane Sinning, seed coordinator of the program in Colorado. Some farmers were using the hemp program as a shield from the scrutiny applied to marijuana growers, Sinning said. Colorado is amending its guidelines to close loopholes.

“In Colorado, if you grow industrial hemp you don’t have to have a background check. We look at it the same way, it’s a little more regulated than corn. It’s a corn crop,” Sinning said.

Sen. Floyd Prozanski, D-Eugene, who wrote the 2009 law, said he would sponsor the legislation that’s needed to update the state’s law and protect farmers and businesses that sign up to grow hemp in 2015.

Prozanski said his bill would decrease the minimum acreage required to obtain a license from 2.5 acres. The agency will also allow growers to process hemp with a single, $1,500 license, a provision that’s barred in the draft rules.

Moran said Oregon, which in 1998 became one of the earliest states to allow medical marijuana and voted to legalize recreational marijuana in November, has taken a cautious path on hemp.

Chuck Eggert, founder and CEO of Tualatin-based Pacific Foods, said a hemp industry in Oregon would benefit his company, which has imported hemp seeds for organic milk from Canada since 2009. Hemp milk is one of the company’s most popular non-dairy products, Eggert said.

“Allowed as an agricultural product in Oregon, hemp crops for nutrition would allow us to create a localized source for both human and animal consumption, and ensure a stable supply to help us meet ever growing consumer demand,” Eggert said in a statement.

Pence said he expects the department will approve rules Feb. 2 and start giving out licenses soon after. That move would be welcome news for advocates. State lawmakers would then address outstanding issues in the upcoming legislative session.

“Let’s let the markets see. Let’s not have some absurd ban because of some absurd misassociation with marijuana,” said Andy Kerr, a conservation activist from Ashland who also works on industrial hemp laws. “Let the farmers grow it. Let the producers produce it.”

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