Industrial hemp, the non-drug cousin of marijuana, is a natural fiber that has a multitude of uses. Current U.S. policy treats industrial hemp as a controlled substance. RCA and a coalition of groups petitioned the Department of Justice to allow the commercial cultivation of industrial hemp.

Letter to U.S. Office of Management and Budget (OMB)

Letter to U.S. Drug Enforcement Administration (DEA)

Proposed Rule for the DEA

Letter to U.S. Department of Agriculture (USDA)

Proposed Rule for the USDA

Memorandum in Support of the Petitions to the DEA and USDA

Letter to OMB

March 23, 1998

Mr. Donald Arbuckle, Acting Administrator
Office of Information and
Regulatory Affairs
Office of Management and Budget
Executive Office Building
Washington, DC 20503
Hand Delivered

Dear Mr. Arbuckle:

Today, a coalition of individuals and organizations are jointly filing two administrative petitions, one with the United States Department of Agriculture and one with the United States Drug Enforcement Administration. The purpose of the petitions is to request the initiation of rule making proceedings at USDA and DEA that would lead to the enactment of regulations permitting the domestic production of a crop known as industrial hemp.

Attached to this letter are copies of the two petitions, a single Memorandum in support of both petitions, and proposed USDA and DEA rules, which reflect the petitioners effort to carefully balance the needs of potential industrial hemp producers with the requirements of law enforcement agencies. Some law enforcement officials have opposed industrial hemp cultivation, because the crop belongs to the same species as the plant commonly known as Marijuana. The petitioners stand ready to work with the DEA, USDA, the Administration, the Congress, and other interested parties to further refine the rules to address legitimate concerns.

Because implementation of our proposal would require coordinated efforts by USDA and DEA, and because of the importance of this issue for many Americans, we urge the Administration to take a strong leadership role in advancing this process.

The petitioners are businesses, farmers, and non-profit organizations who believe that the United States economy, environment, and national security would greatly benefit from the re-introduction of industrial hemp in domestic agriculture and manufacturing. Industrial hemp can be used to make fabrics, paper, building materials, paints, foods, various grade (including food grade) oils and many other consumer and industrial products. Because cultivation and processing of industrial hemp requires little or no use of pesticides, herbicides, or fungicides, introducing the crop as a substitute for other crops will improve our environment. And use of fast-growing, durable industrial hemp for making paper will reduce the need to deplete our forests. Industrial hemp may also prove a useful substitute for petroleum products in a wide range of applications -- from fuels to plastics -- thus further reducing pollution, as well as conserving our precious national resources. Proof of the value of industrial hemp is contained in a 1994 Executive Order in which President Clinton listed hemp as a strategic crop essential to national security. Exec. Order No. 12919, 59 Fed. Reg. 29,525 (June 3, 1994).

Other nations around the world -- from North America to Europe to Asia -- permit industrial hemp growth and are fast developing cultivation and processing methods. Close U.S. allies like the United Kingdom and Germany -- nations committed to enforcing laws against dangerous drugs -- have weighed the pros and cons and decided to proceed with industrial hemp cultivation. Prominent U.S. and foreign businesses are already selling U.S. consumers a range of products made from hemp grown abroad. As U.S. demand for foreign industrial hemp rises, our trade imbalance will widen.

Under the Comprehensive Drug Abuse Prevention and Control Act of 1970, Pub. L. No. 91-513, 84 Stat. 1292 (1970) (the Controlled Substances Act or the Act), industrial hemp, because it is a variety of the plant Cannabis Sativa, is treated as a Schedule I controlled substance, the most restricted category under the law. As a result, hemp cultivation is outlawed in the United States. Petitioners believe that such classification was not the intention of Congress.

Congress expressly excluded parts of the plant (e.g. the mature stalk and fiber) that could not foreseeably be consumed for psychoactive purposes. Since the psychoactive element in marijuana, namely delta-9 tetrahydrocannabinol (THC) was unknown when the definition of Marijuana was adopted, Congress was unable to correctly distinguish psychoactive Marijuana from nonpsychoactive hemp, though that was clearly their intention. This erroneous definition produced a result -- treating industrial hemp as indistinguishable from marijuana -- that is not consistent with international treaty provisions or, today, with the laws of many other countries.

By not revising the definition of marijuana to exclude low-THC industrial hemp, the United States forecloses an important opportunity to introduce a high yield crop that will benefit farmers and related processing and industry that will benefit the United States economy and environment.

The Controlled Substance Act and regulations enacted thereunder permit the Administrator of the DEA, as agent for the Attorney General, to transfer a substance between schedules or to remove a substance from the schedules entirely if the substance does not meet the requirements for inclusion in any schedule. See 21 U.S.C. sec. 811(a); 28 C.F.R. sec. 0.100(b); 21 C.F.R. sec. 1308.43(d). Petitioners believe that industrial hemp is not properly classifiable in any of the five schedule levels established by the Act. It is extremely difficult to obtain any psychoactive effect at all from industrial hemp, so the crop has little or no potential for abuse as a drug, and certainly not the high potential for abuse required for placement in Schedule I. See 21 U.S.C. sec. 812(b)(1). At the same time, industrial hemp does not belong in any other schedule because it does not have "a currently accepted medical use in treatment in the United States." See 21 U.S.C. sec. 812(b). The Act's classifications simply have no relevance to industrial hemp, because industrial hemp is not a drug.

Accordingly, the petitioners are asking DEA to adopt regulations permitting industrial hemp cultivation. However, because petitioners are mindful of the view held by many law enforcement officials that unchecked commerce in industrial hemp would harm efforts to prevent traffic in marijuana, petitioners propose a system that would accommodate both these law enforcement concerns and the interests of U.S. businesses and farmers in growing industrial hemp.

Under the regulations we propose, persons wishing to produce industrial hemp -- defined as Cannabis sativa with a one percent or less concentration of the psychoactive ingredient delta-9 tetrahydrocannabinol (THC) -- in the United States would have to obtain a license from the USDA, grow their crops only from USDA-certified seeds, and consent to USDA inspections of industrial hemp fields and processing facilities. This license system would share certain characteristics with the current DEA system of registration for manufacturers of controlled substances but would, because of essential distinctions between hemp cultivation and production of other controlled substances, differ in several respects. Most fundamentally, administration of the hemp program would be under the control of USDA, rather than DEA, owing to USDA's greater experience in working with crops and farmers.

Under the proposed licensing system, which would be entirely consistent with the provisions of the Controlled Substances Act, only licensed persons would be permitted to possess industrial hemp, so unlicensed persons would not be able to attempt to avoid the strictures of the Act by claiming that marijuana in their possession was actually industrial hemp. At the same time, law enforcement fears about growers hiding marijuana plants in industrial hemp fields would be alleviated; even if one or more licensed industrial hemp growers were disposed to violate the law and cultivate marijuana, an industrial hemp field subject to federal government inspection would be absolutely the most risky place to grow it. Moreover, because of the effects of cross-pollination, an industrial hemp field would also be a poor place to grow marijuana in terms of maintaining the potency of the drug. Thus nothing in the proposed rules would enhance the ability of anyone to traffic in marijuana or weaken the ability of law enforcement officials to detect violations and prosecute violators of marijuana prohibitions.

Representatives of my clients and I would like to meet with you or your staff to discuss these petitions, and I will contact you shortly.

Thank you in advance for your attention to this matter.

Sincerely,

Jay Halfon
P.O. Box 19405
Washington, DC 20036

Letter to DEA

March 23, 1998

Hon. Thomas A. Constantine
Administrator, Drug Enforcement Administration
Department of Justice
Washington, DC 20537
Hand Delivered

Dear Mr. Constantine:

The undersigned hereby petition the Administrator to initiate proceedings for the issuance of a rule, pursuant to section 201 of the Controlled Substances Act, concerning the crop industrial hemp.

Attached hereto and constituting a part of this petition are the following:

Pursuant to 21 C.F.R. sec. 1308.42, petitioners hereby request a hearing with respect to this petition.

Petitioners today are filing a separate petition and proposed rule, concerning the subject matter of the instant petition, with the United States Department of Agriculture (USDA). The Memorandum we are filing with you today is identical to the memorandum in support of our petition to USDA. Petitioners are also submitting a letter addressing this subject matter to the Office of Management and Budget. These items are attached hereto.

All notices to be sent regarding this petition should be addressed to counsel for petitioners:

Jay Halfon
P.O. Box 19405
Washington, DC 20036

Respectfully submitted,

Essential Information
Resource Conservation Alliance
AHA - Vote (American Hemp Association)
The Body Shop
Co-op America
Institute for Local Self Reliance
Institute for Agriculture and Trade Policy
Joe American Horse
North American Industrial Hemp Council
Patagonia Inc.
Penokee Mountain Products Co.
Preston Parish, Farmer
Rainforest Action Network
Real Goods
Rethink Paper
Tierra Madre Co.
Neal Jorgenson, Dean, College of Agriculture and Life Sciences, U. of Wisconsin Madison
Wisconsin Agribusiness Council
Wisconsin Federation of Cooperatives
Wisconsin Fertilizer and Chemical Association
Wisconsin Industrial Hemp Initiative
Wisconsin National Farmers Organization
Ohio Hempery
Deep E Co.
Interface Inc.

By Counsel:

Jay Halfon

Proposed Rule for the DEA

PETITION OF ESSENTIAL INFORMATION ET AL.

March 23, 1998

PROPOSED RULE FOR THE DRUG ENFORCEMENT ADMINISTRATION

1. Section 1308.11 of 21 C.F.R. is amended by revising paragraph (d)(19) to read as follows:

Marihuana, except as provided in sec. 1308.18

2. New section 1308.18 is added and shall read as follows:

sec. 1308.18 Industrial hemp program

(a) Definitions

(1) The term "industrial hemp" means any specimen of the plant Cannabis sativa L., whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration which does not exceed one percent, on a dry weight basis; or any part of such specimen, the seeds thereof, the resin extracted from any such specimen, or every compound, manufacture, salt, derivative, mixture, or preparation of such specimen, its seeds, or resin.

(2) The term "USDA-certified industrial hemp seeds" means seeds that are certified by the United States Secretary of Agriculture (or an authority or facility approved by the United States Secretary of Agriculture to provide such certification) to have derived from industrial hemp.

(3) The term "industrial hemp licensee" means any person who has submitted an Industrial Hemp License Application, as provided for by the regulations of the United States Department of Agriculture, and such Industrial Hemp License has become effective in accordance with the regulations of the United States Department of Agriculture, unless the Secretary of Agriculture has revoked such license in accordance with the regulations of the United States Department of Agriculture, or the license has expired.

(4) The term "industrial hemp seed licensee" means any person who has submitted an Industrial Hemp Seed License Application, as provided for by the regulations of the United States Department of Agriculture, and such Industrial Hemp Seed License has become effective in accordance with the regulations of the United States Department of Agriculture, unless the Secretary of Agriculture has revoked such license in accordance with the regulations of the United States Department of Agriculture, or the license has expired.

(b) Industrial Hemp Licenses

(1) Notwithstanding any other provision of law, and without respect to any limitations or requirements provided by or under the Controlled Substances Act other than this section, any person may possess, cultivate, manufacture, and process plants cultivated from USDA-certified industrial hemp seeds, so long as such person is an Industrial Hemp Licensee.

(2) Persons eligible for exemption from registration pursuant to 21 C.F.R. Part 1301 shall be exempt from the industrial hemp license and fee requirements of the regulations of the United States Department of Agriculture.

(c) Industrial Hemp Seed Licenses

(1) Notwithstanding any other provision of law, and without respect to any limitations or requirements provided by or under the Controlled Substances Act other than this section, any person may import, possess, cultivate, manufacture, and process fertile industrial hemp seeds, and distribute such seeds to Industrial Hemp Licensees, so long as such person is an Industrial Hemp Seed Licensee.

(2) Persons eligible for exemption from registration pursuant to 21 C.F.R. Part 1301 shall be exempt from the industrial hemp seed license and fee requirements of the regulations of the United States Department of Agriculture.

(d) No effect on marijuana prosecutions of unlicensed persons

Nothing in this section shall be construed to authorize, support, prohibit, or otherwise affect in any manner, with respect to any person who is not an Industrial Hemp Licensee or Industrial Hemp Seed Licensee, the use, as a defense in a criminal proceeding, of the THC concentration of the marijuana at issue in the proceeding.

(e) No effect on existing statutory exemptions

Nothing in this section shall be construed to affect in any manner the existing general exemptions from prohibition on marijuana products contained in 21 U.S.C. section 802(16), i.e., the exemptions with respect to the mature stalks of the plant Cannabis sativa L., fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

Letter to USDA

March 23, 1998

Hon. Dan Glickman
Secretary of Agriculture
United States Department of Agriculture
Fourteenth Street and Independence Avenue SW
Washington, DC 20250
Attention: Mr. Pearlie S. Reed,
Acting Assistant Secretary for Administration
Hand-delivered

Dear Secretary Glickman:

Pursuant to 5 USC section 553(3) and 7 CFR section 1.28, the undersigned hereby petition you to issue a rule concerning the crop industrial hemp.

Attached hereto and constituting a part of this petition are the following:

(1) The proposed rule; and

(2) A memorandum containing a statement of the grounds on which the petitioners rely for issuance of the proposed

rule or of a comparable rule addressing the subject matter of the proposed rule.

Petitioners hereby request a hearing with respect to this petition.

Petitioners today are filing a separate petition and proposed rule, concerning the subject matter of the instant petition, with the United States Drug Enforcement Administration (DEA). The Memorandum we are filing with you is identical to the memorandum in support of our petition to the DEA. Petitioners are also submitting a letter addressing this subject matter to the Office of Management and Budget. These items are attached hereto.

All notices to be sent regarding this petition should be addressed to counsel for petitioners:

Jay Halfon
P.O. Box 19405
Washington, DC 20036

Respectfully submitted,

Essential Information
Resource Conservation Alliance
AHA - VOTE (American Hemp Association)
The Body Shop
Co-op America
Institute for Local Self Reliance
Institute for Agriculture and Trade Policy
Joe American Horse
North American Industrial Hemp Council
Patagonia Inc.
Penokee Mountain Products Co.
Preston Parish, Farmer
Rainforest Action Network
Real Goods
Rethink Paper
Tierra Madre Co.
Neal Jorgenson, Dean, College of Agriculture and Life Sciences, U. of Wisc.-Madison
Wisconsin Agribusiness Council
Wisconsin Federation of Cooperatives
Wisconsin Fertilizer and Chemical Association
Wisconsin Industrial Hemp Initiative
Wisconsin National Farmers Organization
Ohio Hempery
Deep E Co.
Interface Carpet

By Counsel:
Jay Halfon

Proposed Rule for the USDA

PETITION OF ESSENTIAL INFORMATION ET AL.

PROPOSED RULE FOR THE DEPARTMENT OF AGRICULTURE

Section 1 -- Definitions

(a) The term "industrial hemp" means any specimen of the plant Cannabis sativa L., whether growing or not, with a delta-9 tetrahydrocannabinol (THC) concentration which does not exceed one percent, on a dry weight basis; or any part of such specimen, the seeds thereof, the resin extracted from any such specimen, or every compound, manufacture, salt, derivative, mixture, or preparation of such specimen, its seeds, or resin.

(b) The term "USDA-certified industrial hemp seeds" means seeds that are certified by the Secretary (or an authority or facility approved by the Secretary to provide such certification) to have derived from industrial hemp.

(c) The term "industrial hemp licensee" means any person who has submitted an Industrial Hemp License Application, as provided for by section 2 of this Rule, and such Industrial Hemp License has become effective in accordance with section 3, unless the Secretary has revoked such license in accordance with section 3, or the license has expired.

(d) The term "industrial hemp seed licensee" means any person who has submitted an Industrial Hemp Seed License Application, as provided for by section 4 of this Rule, and such Industrial Hemp Seed License has become effective in accordance with section 5, unless the Secretary has revoked such license in accordance with section 5, or the license has expired.

Section 2 -- Industrial Hemp Licenses

(a) Notwithstanding any other provision of law, and without respect to any limitations or requirements provided by or under the Controlled Substances Act other than those in 21 CFR sec. 1308.18, any person may possess, cultivate, manufacture, and process plants cultivated from USDA-certified industrial hemp seeds, so long as

(1) such plants are cultivated only from USDA-certified industrial hemp seeds, as that term is defined in this Rule, and from no other seeds; and

(2) such person, every twenty-four months,

(A) submits to the Secretary an Industrial Hemp License Application which includes:

(i) a statement of intent to produce industrial hemp;

(ii) disclosure of the precise location of all facilities where the Industrial Hemp Licensee will produce industrial hemp;

(iii) a certification that neither the Industrial Hemp License Applicant or Licensee, nor any officer or director thereof, nor any employee thereof who is involved or foreseeably will be involved with the License Applicant or Licensee's possession, cultivation, manufacture, or processing of industrial hemp, has any prior federal or state felony convictions with respect to controlled substances; and

(iv) an agreement to accept USDA inspections with respect to industrial hemp as provided in section 7 of this Rule; and

(B) concurrent with the filing of the Industrial Hemp License Application, pays an annual application and license fee of $25.

(b) All Industrial Hemp License Applications shall be submitted for filing, by first-class mail, to the Industrial Hemp License Application Unit, United States Department of Agriculture, Washington, DC 20250.

(c) Persons eligible for exemption from controlled substance registration pursuant to 21 C.F.R. Part 1301 shall be exempt from the license requirement of this section. Persons eligible for exemption from fees pursuant to 21 C.F.R. Part 1301 shall be exempt from the fee requirement of this section.

Section 3 -- Effective Date, Denial and Revocation of Industrial Hemp Licenses

(a) An Industrial Hemp License is effective 45 days after the date of submission of an Industrial Hemp License Application and is valid for two years from the effective date, unless, prior to the effective date, the Secretary determines to deny the Application.

(b) The Secretary may deny an Industrial Hemp License Application, or suspend or revoke an existing Industrial Hemp License, only if --

(1) one or more components of the Industrial Hemp License Application are incomplete or lacking in reasonable detail, and the License Applicant or Licensee fails, after reasonable notice by the Secretary, to correct such deficiencies;

(2) the Industrial Hemp License Application contains false statements with respect to material facts;

(3) the Industrial Hemp License Applicant or Licensee fails or refuses to facilitate reasonable USDA inspection, in accordance with section 7 of this Rule;

(4) the Industrial Hemp License Applicant or Licensee cultivates marihuana (as that term is defined in 21 U.S.C. section 802(16)) that is not derived from USDA-certified industrial hemp seeds; or

(5) the Industrial Hemp License Applicant or Licensee, or an officer or director thereof, or any employee thereof who is involved or foreseeably will be involved with the License Applicant or Licensee's possession, cultivation, manufacture, or processing of industrial hemp, has been convicted of a federal or state felony with respect to controlled substances.

Section 4 -- Industrial Hemp Seed Licenses

(a) Notwithstanding any other provision of law, and without respect to any limitations or requirements provided by or under the Controlled Substances Act other than those in 21 CFR sec. 1308.18, any person may import, possess, cultivate, manufacture, and process fertile industrial hemp seeds, and distribute such seeds to Industrial Hemp Licensees, so long as such person, every twenty-four months,

(1) submits to the Secretary an Industrial Hemp Seed License Application which includes:

(A) a statement of intent to import or produce industrial hemp seeds;

(B) disclosure of the precise location of all facilities where the Industrial Hemp Seed Licensee will process, produce or analyze industrial hemp seeds;

(C) a certification that the neither the Industrial Hemp Seed License Applicant or Licensee, nor any officer or director thereof, nor any employee thereof who is involved or foreseeably will be involved with the Licensee's importation, possession, cultivation, manufacture, or processing of industrial hemp seeds, has any prior federal or state felony convictions with respect to controlled substances;

(D) an agreement to accept USDA inspections with respect to industrial hemp seeds as provided in section 7 of this Rule; and

(E) an agreement to comply with USDA procedures for seed certification to ensure that the seeds have derived from industrial hemp plants; and

(2) concurrent with the filing of the Industrial Hemp Seed License Application, pays an annual application and license fee of $25.

(b) All Industrial Hemp Seed License Applications shall be submitted for filing, by first-class mail, to the Industrial Hemp License Application Unit, United States Department of Agriculture, Washington, DC 20250.

(c) Persons eligible for exemption from registration pursuant to 21 C.F.R. Part 1301 shall be exempt from the license requirement of this section. Persons eligible for exemption from fees pursuant to 21 C.F.R. Part 1301 shall be exempt from the fee requirement of this section.

Section 5 -- Effective Date, Denial and Revocation of Industrial Hemp Seed Licenses

(a) An Industrial Hemp Seed License is effective 60 days after the date of submission of an Industrial Hemp Seed License Application and is valid for two years from the effective date, unless, prior to the effective date, the Secretary determines to deny the Application.

(b) The Secretary may deny an Industrial Hemp Seed License Application, or suspend or revoke an existing Industrial Hemp Seed License, only if --

(1) one or more components of the Industrial Hemp Seed License Application are incomplete or lacking in reasonable detail, and the License Applicant fails, after reasonable notice by the Secretary, to correct such deficiencies;

(2) the Industrial Hemp Seed License Application contains false statements with respect to material facts;

(3) the Industrial Hemp Seed License Applicant or Licensee fails or refuses to facilitate reasonable USDA inspection, in accordance with section 7;

(4) the Industrial Hemp Seed License Applicant or Licensee fails to comply with USDA procedures for seed certification to ensure that the seeds have derived from industrial hemp plants; or

(5) the Industrial Hemp Seed License Applicant or Licensee, or an officer or director thereof, or any employee thereof who is involved or foreseeably will be involved with the License applicant or Licensee's importation, possession, cultivation, manufacture, or processing of industrial hemp seeds, has been convicted of a federal or state felony with respect to controlled substances.

Section 6 -- Order to show cause, hearing and judicial review

(a) In the event the Secretary determines to deny, suspend or revoke an Industrial Hemp License or Industrial Hemp Seed License of any person, the Secretary shall serve upon the Applicant or Licensee an order to show cause why the application or license should not be denied, suspended or revoked and publish such order to show cause in the Federal Register.

(b) The order to show cause shall call upon the Applicant or Licensee to appear before the Secretary at a time and place stated in the order, which shall not be less than thirty days after the date of receipt of the order. The order to show cause shall also contain a statement of the legal basis for such hearing and for the denial, revocation, or suspension of the License and a summary of the matters of fact and law asserted.

(c) Upon receipt of an order to show cause, the Applicant or Licensee must, if he or she desires a hearing, file a request for a hearing. If a hearing is requested, the Secretary shall hold a hearing at the time and place stated in the order.

(d) When authorized by the Secretary, any agent of the Secretary may serve the order to show cause.

(e) In any case where the Secretary shall hold a hearing on any License or Application therefor, the procedures for such hearing shall be governed generally by the adjudication procedures set forth in the Administrative Procedures Act (5 U.S.C. 551-559).

(f) Any hearing under this Rule shall be independent of, and not in lieu of, criminal prosecutions or other proceedings under any law of the United States.

(g) The Applicant or Licensee may, within the period permitted for filing a request for a hearing, file with the Secretary a waiver of an opportunity for a hearing, together with a written statement regarding such person's position on the matters of fact and law involved in such hearing. Such statement, if admissible, shall be made a part of the record and shall be considered in light of the lack of opportunity for cross-examination in determining the weight to be attached to matters of fact asserted therein.

(h) If the Applicant or Licensee fails to file a request for a hearing, or if such person so files and fails to appear at the hearing, such person shall be deemed to have waived the opportunity for a hearing, unless such person shows good cause for such failure.

(i) If the Applicant or Licensee waives or is deemed to waive the opportunity for the hearing, the Secretary may cancel the hearing, if scheduled, and issue his or her final order without a hearing.

(j) At any hearing under this Rule, the Secretary shall have the burden of proving that the requirements for such License, as prescribed by this Rule, are not satisfied.

(k) The hearing will commence at the place and time designated in the order to show cause or notice of hearing published in the Federal Register but thereafter it may be moved to a different place and may be continued from day to day or recessed to a later day without notice other than announcement thereof by the presiding officer at the hearing.

(l) As soon as practicable after the presiding officer has certified the record to the Secretary, the Secretary shall issue his or her order on the granting, denial, revocation, or suspension of the License. In the event that an Application is denied or the License is suspended or revoked, the order shall include the findings of fact and conclusions of law upon which the order is based. The order shall specify the date on which it shall take effect. The Secretary shall serve one copy of his/her order upon each party in the hearing.

(m) Judicial review of an order of the Secretary under this Rule shall be governed by the provisions of the Administrative Procedures Act (5 U.S.C. sections 701-706).

Section 7 -- Inspections of Licensees

The Secretary may inspect, or cause to be inspected, the establishment of an Industrial Hemp Licensee or Industrial Hemp Seed Licensee for the purpose of determining compliance with this Rule.

Section 8 -- No effect on marijuana prosecutions of unlicensed persons

Nothing in this Rule shall be construed to authorize, support, prohibit, or otherwise affect in any manner, with respect to any person who is not an Industrial Hemp Licensee or Industrial Hemp Seed Licensee, the use, as a defense in a criminal proceeding, of the THC concentration of the marijuana at issue in the proceeding.

Section 9 -- No effect on existing statutory exemptions

Nothing in this Rule shall be construed to affect in any manner the existing general exemptions from prohibition on marijuana products contained in 21 U.S.C. section 802(16), i.e., the exemptions with respect to the mature stalks of the plant Cannabis sativa L., fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

March 23, 1998

I. Summary

Essential Information et al., today are filing petitions with the United States Drug Enforcement Administration (DEA) and the United States Department of Agriculture (USDA) to initiate rule making proceedings that would lead to the enactment of regulations permitting the domestic production of the crop industrial hemp. To avoid repetition and confusion and because of the necessity for coordinated action by DEA and USDA to implement this proposal, petitioners submit this single memorandum to both the DEA Administrator and the Secretary of Agriculture. Proposed DEA and USDA rules, reflecting petitioners' effort to carefully balance the needs of potential hemp producers with the requirements of law enforcement agencies, are attached to the petitions. Petitioners stand ready to work with DEA, USDA, the Clinton Administration, Congress and other interested parties to further refine the proposed rules to address legitimate concerns.

Petitioners are businesses, farmers, and non-profit organizations who believe that the United States economy, environment, and national security would greatly benefit from the re-introduction of industrial hemp in domestic agriculture and manufacturing. Industrial hemp can be used to make fabrics, paper, building materials, paints, foods, and many other consumer and industrial products. Because cultivation and processing of industrial hemp requires little or no use of pesticides, herbicides, or fungicides, introducing the crop as a substitute for other crops will improve our environment. And use of fast-growing, durable industrial hemp for making paper will reduce the need to deplete our forests. Industrial hemp may also prove a useful substitute for petroleum products in a wide range of applications -- from fuels to plastics -- thus further reducing pollution, as well as conserving our precious national resources. Proof of the value of industrial hemp is Other nations around the world -- from North America to Europe to Asia -- permit industrial hemp growth and are fast developing cultivation and processing methods. Close U.S. allies like the United Kingdom and Germany -- nations committed to enforcing laws against dangerous drugs -- have weighed the pros and cons and decided to proceed with industrial hemp cultivation. Prominent U.S. and foreign businesses are already selling U.S. consumers a range of products made from hemp grown abroad. As U.S. demand for foreign industrial hemp rises, our trade imbalance will widen.

Under the Comprehensive Drug Abuse Prevention and Control Act of 1970, Pub. L. No. 91-513, 84 Stat. 1292 (1970) (the "Controlled Substances Act" or "the Act"), industrial hemp, because it is a variety of the plant Cannabis sativa, is treated as a Schedule I controlled substance, the most restricted category under the law. As a result, hemp cultivation is outlawed in the United States. Petitioners believe that such classification was simply a historical accident, producing a result -- treating industrial hemp as indistinguishable from marijuana -- that is not consistent with international treaty provisions or, today, with the laws of many other countries.

The Controlled Substance Act and regulations enacted thereunder permit the DEA Administrator, as agent for the Attorney General, to transfer a substance between schedules or to remove a substance from the schedules entirely if the substance does not meet the requirements for inclusion in any schedule. See 21 U.S.C. sec. 811(a); 28 C.F.R. sec. 0.100(b); 21 C.F.R. sec. 1308.43(d). Petitioners believe that industrial hemp is not properly classifiable in any of the five schedule levels established by the Act. It is extremely difficult to obtain any psychoactive effect at all from industrial hemp, so the crop has little or no potential for abuse as a drug, and certainly not the "high potential for abuse" required for placement in Schedule I. See 21 U.S.C. sec. 812(b)(1). At the same time, industrial hemp does not belong in any other schedule because it does not have "a currently accepted medical use in treatment in the United States." See 21 U.S.C. sec. 812(b). The Act's classifications simply have no relevance to industrial hemp, because industrial hemp is not a drug.

Although petitioners believe that the most appropriate course is, therefore, to remove industrial hemp from the control of the Act, petitioners are mindful of the view held by many law enforcement officials that unchecked commerce in industrial hemp would harm efforts to prevent traffic in marijuana. Petitioners therefore propose a system that would accommodate both these law enforcement concerns and the interests of U.S. businesses and farmers in growing industrial hemp.

Under the system we propose, persons wishing to produce industrial hemp -- defined as Cannabis sativa with a one percent or less concentration of the psychoactive ingredient delta-9 tetrahydrocannabinol (THC) -- in the United States would have to obtain a license from the United States Department of Agriculture (USDA), grow their crops only from USDA-certified seeds, and consent to USDA inspections of industrial hemp fields and processing facilities. This license system would share certain characteristics with the current DEA system of registration for manufacturers of controlled substances but would, because of essential distinctions between hemp cultivation and production of other controlled substances, differ in several respects. Most fundamentally, administration of the hemp program would be under the control of USDA, rather than DEA, owing to USDA's greater experience in working with crops and farmers.

Under the proposed licensing system, only licensed persons would be permitted to possess industrial hemp, so unlicensed persons would not be able to attempt to avoid the strictures of the Controlled Substances Act by claiming that marijuana in their possession was actually industrial hemp. At the same time, law enforcement fears about growers hiding marijuana plants in industrial hemp fields would be alleviated; even if one or more licensed industrial hemp growers were disposed to violate the law and cultivate marijuana, an industrial hemp field subject to federal government inspection would be absolutely the most risky place to grow it. Moreover, because of the effects of cross-pollination, an industrial hemp field would also be a poor place to grow marijuana in terms of maintaining the potency of the drug. Thus nothing in the proposed rules would enhance the ability of anyone to traffic in marijuana or weaken the ability of law enforcement officials to detect violations and prosecute violators of marijuana prohibitions.

II. Interests of Petitioners

Petitioner Essential Information, a non-profit organization founded by Ralph Nader in 1982 and based in the District of Columbia, conducts research projects designed to bring neglected information to the attention of policy makers, the media and others as a catalyst for reform. Essential Information has as one component an Alternative Fibers Project, which seeks means of enhancing alternative fiber production while reducing environmental harms and depletion of scarce natural resources. Essential Information believes that hemp cultivation could address these problems.

Petitioner Patagonia is an outdoor clothing and equipment company based in Ventura, California. Patagonia is committed to producing durable, sustainable products emphasizing natural, organic and recycled materials.

Petitioner Tierra Madre is a company set up to do research and development to further elements of a sustainable society including industrial hemp.

Petitioner Real Goods is an 18 million dollar a year retail and mail order company which focuses on renewable energy and sustainable products. Real Goods already sells hemp products.

Petitioner The Body Shop is a cosmetics company specializing in natural and sustainable products. The Body Shop has recently introduced a line of hemp products.

Petitioner Deep E Co. is a footwear and accessories company that utilizes industrial hemp fiber in textiles and yarns in the manufacture of some of their products. Deep E Co. has found hemp to be an excellent fiber for their purposes due to its natural resistance to bacterial action and its durability.

Petitioner Interface Inc., based in Atlanta, is a conglomerate of companies producing fabrics and carpets.

Petitioner Preston Parish is the owner of Parish Organic Farms in East Jordan, Michigan. He is a certified organic farmer who has long maintained an interest in the hemp industry. Mr. Parish grows soybeans and organic corn but no longer considers these efforts profitable. He believes that hemp would be a valuable crop grown in rotation with other crops. He is aware that Canada has begun to permit hemp cultivation, and he is concerned that U.S. farmers may be left behind. He believes that hemp cultivation could improve his soil and allow his farm to remain in operation.

Petitioner Joe American Horse is a member of the Lakota Souix Nation and a resident of the Pine Ridge Indian Reservation. Mr. American Horse believes that industrial hemp is a crop that can bring about economic development on the reservation. He believes that sovereignty is dependent on self-reliance and the cultivation of industrial hemp would allow the reservation to develop economic opportunities not dependent on the federal government for support.

Petitioner The Institute for Local Self-Reliance (ILSR) is a non-profit research and educational organization that provides technical assistance and information on environmentally sound economic development strategies. Since 1974, ILSR has worked with citizen groups, governments and private businesses in developing policies that extract the maximum value from local resources. ILSR has offices in the District of Columbia and Minneapolis, Minnesota.

Petitioner ReThink Paper works to catalyze a shift in the U.S. pulp and paper market toward ecological sustainability by convincing stakeholders to "rethink"--and then replace--current paper-consumption and production practices. They believe that hemp can play an important role in diversifying our resource stream.

Petitioner Rainforest Action Network is a nonprofit grassroots organization based in San Francisco dedicated to the preservation of the worlds remaining rainforests. RAN believes that the production of hemp and other agricultural fibers will reduce the pressures our society places on forest habitat.

Petitioner Institute for Agricultural and Trade Policy, founded in 1986, educates and assists individuals and groups working for a just and sustainable world. To this end IATP is very interested in sustainable resource use and sustainable agriculture and the role hemp can play in both arenas.

Petitioner AHA Voter is a non-profit corporation based in Colorado. AHA Voter -- AHA stands for Agricultural Hemp Association -- lobbies at the state level for legislation permitting farmers to cultivate industrial hemp. The president of

AHA Voter is Lloyd Casey, who formerly served in the Senate of the Colorado General Assembly. Senator Casey sponsored industrial hemp legislation in 1995 and 1996.

Petitioner Resource Conservation Alliance is nonprofit project based in Washington, DC dedicated to the protection of natural forests through reducing demand for wood products.

Petitioner North American Industrial Hemp Council is a nonprofit corporation, based in Madison, Wisconsin. It was formed to: reestablish and expand the use of industrial hemp and to form and establish relationships between academia, farmers, agribusiness, manufactures, government, public interest groups, and marketing firms with emphasis on land management, economic and environmental considerations; develop policies to enhance the stewardship of our lands through the sustainable cultivation, product development, manufacturing and marketing of industrial hemp and other comparable annual fiber crops; promote the development of new products and business based on industrial hemp fibers and seeds; cooperatively foster a better understanding of industrial hemp and other annual fiber crops and their implications for the environment and rural economic development.

Petitioner Wisconsin Agribusiness Council, founded in 1971, has a mission to provide a strong, unified and effective voice for agriculture. Its members include farmers, educators, cooperative and private agribusinesses, 50 agriculture and trade associations and other leaders interested in advancing the agricultural industry.

Petitioner Wisconsin Federation of Cooperatives was formed in 1969 for the purpose of protecting the interests of its cooperative members and advancing the cooperative cause statewide.

Petitioner Wisconsin Fertilizer and Chemical Association represents dealers, distributors and manufacturers of crop protection chemical and fertilizers. It promotes the safe and environmentally responsible use of these products.

Petitioner Wisconsin Industrial Hemp Initiative is a coalition of ten major, statewide agricultural groups organized to re-introduce industrial hemp as an agronomic crop in Wisconsin.

Petitioner Wisconsin National Farmers Organization was formed in 1955 for the purpose of improving and stabilizing the living standards of farm families and to maintain and protect the interests of family farmers. Its 3000 farm members produce grain, livestock, and dairy products.

Petitioner Ohio Hempery is a mail order and retail company for industrial hemp products including food, clothing and other goods. Ohio Hempery is based in Guyesville Ohio.

Petitioner Penokee Mountain Products sells products made from natural fibers including imported industrial hemp and is based in Ashland Wisconsin.

Petitioner Neal Jorgensen is the Dean of the College of Agricultural & Life Sciences at the University of Wisconsin - Madison and supports the cultivation of industrial hemp in Wisconsin.

III. Reasons Supporting the Proposed Rule

A. Industrial hemp has been a valuable crop for centuries

Industrial hemp is a cousin of marijuana -- both are members of the species Cannabis sativa -- but there are essential differences between the two. The term marijuana generally refers to the leaves and flowers of certain Cannabis varieties -- short, bushy plants with many leaves, which contain the psychoactive ingredients. Hemp plants are tall and straight, with leaves located at the top of the stalk. Marijuana is harvested for its flowers and leaves; industrial hemp is normally harvested for its stalks before flowering occurs. Industrial hemps concentration of THC, the psychoactive ingredient in Cannabis plants, is typically as little as 0.05 percent and less than one percent, whereas marijuana THC levels are generally four to ten percent.

Hemp is a plant as old as civilization. It made some of the first rope, fishing nets and paper. Hemp was growing in New England no later than 1629. The Founding Fathers strongly promoted hemp cultivation. George Washington wrote, "Make the most you can of the Indian hemp seed and sow it everywhere." Thomas Jefferson grew hemp and experimented with different varieties. Benjamin Franklin founded one of the nation's first paper mills, which used hemp as its source of fiber. Drafts of the Declaration of Independence were written on hemp paper. Betsy Ross's American flag was made from hemp.

The development of the cotton gin in 1793 spurred a shift to cotton for many uses, but hemp cultivation continued. The U.S.S. Constitution had over sixty tons of hemp in its sails and riggings. The covered wagons that brought American families west had hemp covers. In the 1800s, hemp production was especially strong in the State of Kentucky. At the end of the 19th century, the first U.S. Secretary of Agriculture, Jeremiah Rusk, a former Governor of Wisconsin, strongly supported hemp cultivation, and USDA breeding programs spurred successful hemp production in Wisconsin, Kentucky, and Virginia in the first part of this century. However, USDA efforts increasingly became focused on promoting cotton development, and by 1930 hemp had substantially declined in importance in the United States; there were fewer than 1500 acres of industrial hemp growing, principally in Wisconsin. But in the early thirties, hemp acreage again began to rise.

B. Industrial hemp was never meant to be banned in the United States

Domestic cultivation of industrial hemp is presently banned because the DEA considers fertile hemp seeds to be fertile seeds of the plant Cannabis sativa L., and such seeds are included in the definition of "Marihuana" in the 1970 Controlled Substances Act. Under the 1970 Act, as codified at 21 U.S.C. sec. 812(c)(10), "Marihuana" is a Schedule I controlled substance, the most heavily-restricted category.

Viewed from a historical perspective, the banning of domestic industrial hemp cultivation is difficult to understand, because: (1) the definition of "Marihuana" in the 1970 Act is taken verbatim from one of the statutes the 1970 Act replaced, the Marihuana Tax Act of 1937, Pub. L. No. 75-238, 50 Stat. 551; and (2) there is repeated evidence in the legislative history of the 1937 Act that Congress did not intend to weaken domestic hemp production. Indeed, an examination of the record offers no evidence that Congress has ever deliberately sought to ban industrial hemp cultivation.

When the definition of "Marijuana" was adopted its psychoactive element, THC, was unknown. In the same way that Congress expressly excluded the parts of the plant (e.g. the mature stalk and fiber) that could not be consumed for psychoactive purposes, Congress would have excluded subspecies of the plant which likewise can not be consumed for psychoactive purposes.

1. The Marihuana Tax Act of 1937

The 1937 Marihuana Tax Act defined "Marihuana" to encompass the seeds of Cannabis sativa plants, whether marijuana or industrial hemp. The definition was:

[A]ll parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds, or resin; but shall not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.

The 1937 Act imposed various taxes on producers, dispensers and users of "Marihuana." Specifically, the 1937 Act levied a $24 annual tax on importers and manufacturers of marijuana; a $1 annual tax on producers of marijuana (farmers counted as producers); and a $1 annual tax on doctors who prescribed marijuana. All such persons were required to register with the Treasury Department. The 1937 Act made it unlawful for a person to engage in such activities without having paid the required tax. Any transfer of marijuana had to be accompanied by a written order form furnished by the Treasury Department; each form had to indicate the names of the seller and buyer and the amount transferred. Each transfer to a person who had paid the annual tax was subject to a $1 transfer tax per ounce; the tax for transfers to persons who did not pay the annual tax was $100 per ounce, except in the case of a transfer from a doctor to a patient. Since the average person did not fall into one of the categories providing for payment of the annual tax, in non-prescription cases the $100 per ounce tax would apply, thus making lawful marijuana purchases prohibitively expensive. No tax was to be imposed with respect to the transfer of "any seeds of the plant Cannabis sativa L." to any registered marijuana importer, manufacturer, or producer or prescribing doctor. The Government had the authority to seize and destroy marijuana imported, manufactured or transferred in violation of the 1937 Act. Violations were punishable by a maximum five years in prison and $2000 fine. See Leary v. United States, 395 U.S. 6 (1969) (explaining provisions of 1937 Act).

2. Legislative History of the 1937 Act

The legislative history of the 1937 Marihuana Tax Act demonstrates that many U.S. businesses and farmers maintained a strong interest in hemp production at the time and that Congress respected and wished to accommodate those interests.

The Marihuana Tax Act was proposed by the Treasury Department and transmitted to each house of Congress in April 1937. 81 Cong. Rec. 3491 (House); 81 Cong. Rec. 3569 (Senate). Its aim was to address widespread concern about the use of marijuana as a drug.

In support of the bill, the Treasury Department offered, as the lead-off witness in House hearings held later in April, Clinton Hester, Assistant General Counsel. He assured the Ways and Means Committee that the industrial hemp industry would not be harmed by the legislation as drafted:

The form of the bill is such ... as not to interfere materially with any industrial, medical or scientific uses which the plant may have. Since hemp fiber and articles manufactured therefrom are obtained from the harmless mature stalk of the plant, all such products have been completely eliminated from the purview of the bill by defining the term "Marihuana" in the bill, so as to exclude from its provisions the mature stalk and its compounds or manufacturers.

Taxation of Marihuana, Hearings Before the House Comm. on Ways and Means on H.R. 6385, 75th Cong., 1st Sess. 8 (1937).

Recognizing that the seeds required for hemp cultivation still fell within the definition of marijuana, Hester added:

There are also some dealings in marihuana seeds for planting purposes and for use in the manufacture of oil which is ultimately employed by the paint and varnish industry. As the seeds, unlike the mature stalk, contain the drug, the same complete exemption could not be applied in this instance. But this type of transaction, as well as any transfer of completed paint or varnish products, has been exempted from transfer tax.

Id.

The fact that seeds were thought to contain the drug (seeds are now known not to be psychoactive) demonstrates the lawmakers' misconceptions at the time. Under the statute, as envisioned by Hester, growers of hemp stalks would have to pay the annual registration tax but would be exempt from transfer tax so long as only the mature stalks were transferred and there was no transfer of flowers and leaves. Id., at 46.

In subsequent Senate testimony, Hester similarly offered the assurance that "[t]he production and sale of hemp and its products for industrial purposes will not be adversely affected by this bill." Hester contended that industrial hemp producers could not be exempted from such taxation, because of constitutional and enforcement concerns. But he stressed that the tax on these producers would be "small." Taxation of Marihuana, Hearing Before Subcomm. of Comm. on Finance on H.R. 6906, 75th Cong., 1st Sess. at 7-8 (1937).

Harry J. Anslinger, Commissioner of the Federal Bureau of Narcotics (FBN, the predecessor of the DEA), told the Senate Committee that those in the domestic hemp industry are not only amply protected under this act, but they can go ahead and raise hemp just as they have always done it. Id., at 17.

As House and Senate proceedings on the bill went forward, the definition of marijuana was modified in several respects to address the concerns of representatives of industries that made hemp products. See House Ways and Means hearing at 43 (request for exemption for hemp seed oil); id., at 67, 69 (agreement by Mr. Hester to accept amendment exempting oil or cake made from seeds from the definition of marijuana); id., at 74 (committee agreement to amendment exempting sterilized seeds); Senate Finance hearing at 21-34 (testimony of various industrial hemp industry representatives); Senate Rep. No. 900, 75th Cong., 1st Sess., at 1 (1937) (amendments exempting hemp "fiber" from the definition of marijuana and reducing occupational tax on marijuana producers from $5 to $1 per year).

The House Committee report concluded that Cannabis has many industrial uses and that the definition of "Marihuana" excluded "the parts of the plant and the valuable industrial articles produced therefrom in which the drug is not present." House Report No. 792, 75th Cong., 1st Sess. at 1, 4 (1937).

On June 11, 1937, Rep. Buck of California enumerated on the House floor the various industrial uses of Cannabis products. He then said, "The bill protects all of these legitimate uses of the plant, the word 'marihuana' being defined in section 1 of the bill so as to cover solely the illegitimate use of the plant as a narcotic." 81 Cong. Rec. App. 1440 (1937).

In light of this history, it is not surprising that the Supreme Court later concluded that the 1937 Act had the purpose not of banning all Cannabis cultivation but instead of "restricting traffic in marihuana to accepted industrial and medicinal channels." United States v. Sanchez, 340 U.S. 42, 44 (1950).

3. Hemp Cultivation: 1937 to 1970

Despite the assurances in the legislative record that the 1937 Act protected the industrial hemp industry, domestic hemp production declined following enactment of the Marijuana Tax Act. The U.S. armed forces relied on abaca, so-called "Manila hemp", imported from the Philippines for rope, canvas, uniforms and other products. But after the Philippines fell to Japanese forces in 1942, the U.S. Army and the Agriculture Department sponsored a "Hemp for Victory" campaign that urged farmers to grow hemp to meet war needs. Without any change in federal law, over 400,000 acres of hemp were cultivated in the U.S. between 1942 and 1945, aided by spending by the War Hemp Industries Corporation to build 42 hemp mills in the Midwest. When George Bush bailed out of his burning aircraft over the Pacific, he reportedly used a parachute made from U.S.-grown industrial hemp. And amid wartime shortages of raw materials, Henry Ford unveiled a prototype automobile that included body parts made with industrial hemp.

After the war, production again declined. The government sold the mills as surplus. But Congress continued to support hemp cultivation: When the FBN attempted to implement a legal interpretation that would have increased the tax burden on hemp growers, Congress in 1945 promptly enacted legislation overruling the bureau. At a Senate hearing, William S. Wood, deputy commissioner of the Federal Bureau of Narcotics, offered assurances that the FBN did not wish to wipe out the industrial hemp business and that the statute did not permit the agency to do so. See 1945 Senate Hearings at 18.

The Rens Company grew industrial hemp in Wisconsin until 1957. According to William Rens, the company's head, federal agents never visited his facilities, and the tax and reporting requirements were not a major burden. The Rens Company went out of business in 1958, and thereafter domestic hemp cultivation apparently ended. The restrictions of the Marijuana Tax Act were certainly a factor in hemps decline -- there are reports that aggressive enforcement of the Act's requirements hampered short-lived hemp ventures in Minnesota and Illinois -- but also cited is the general industrial shift from plant-based products to chemical-based products like vinyl, polyester and silicon.

4. The 1970 Act

The Comprehensive Drug Abuse Prevention and Control Act of 1970 repealed the Marihuana Tax Act, but it incorporated verbatim that 1937 Act's definition of "Marihuana." There was an essential difference, however: While the 1937 Act used a system of taxation and disclosure that, in effect, allowed the Government to penalize marijuana growers without punishing industrial hemp growers, the 1970 Act abolished the taxation approach and effectively made all Cannabis cultivation illegal, except where the DEA issued a limited-use permit. "Marihuana," defined exactly as in the Tax Act to include all varieties of the plant Cannabis sativa L., see 21 U.S.C. sec. 802(16), was placed in Schedule I, the most restricted category of substances, under the Act. See 21 U.S.C. sec. 812(c)(c)(10).

There is, however, no evidence that Congress ever considered the consequences for industrial hemp cultivation of this change in the law. Indeed, in the 1970 Act, Congress noted that the U.S. is a party to the 1961 United Nations Single Convention on Narcotic Drugs, 18 U.S.T. 1408. 21 U.S.C. sec. 801(7). That Convention, unlike the 1970 Act, expressly recognized a distinction between marijuana and industrial hemp, the latter of which was exempted from coverage. 18 U.S.T. 1408, Article 28(2) ("This Convention shall not apply to the cultivation of the Cannabis plant exclusively for industrial purposes (fibre and seed) or horticultural purposes"). But with the domestic hemp industry dormant, there was no one to point out or protest against the effect, intentional or not, of the 1970 Act on the future of domestic industrial hemp cultivation.

Courts have subsequently ruled that the phrase "Cannabis sativa L." should be construed broadly to refer to any plants in the Cannabis sativa species, provided that the plant contains some amount of the psychoactive substance THC. See, e.g., United States v. Kelly, 527 F.2d 961 (9th Cir. 1976); United States v. Walton, 514 F.2d 201 (D.C.Cir. 1975). Many varieties of industrial hemp do contain some THC, although not enough to produce a psychoactive effect in humans under realistic conditions (see part III.F.1., infra).

5. The Situation Today

While the U.S. has prohibited industrial hemp production for nearly three decades, many other nations have continued to cultivate the crop. And recently, nations that had previously shared the U.S. policy of hemp prohibition have reversed course and begun permitting commerce or research with respect to hemp.

Nations such as France, China, Thailand, India, Russia, Korea, Hungary and Romania have been cultivating hemp for years. Hemp may be grown without a license in many countries. World hemp production was about 100,000 metric tons in 1996, with four-fifths of this total produced by India, China, Russia and Korea.

The European Union has supported hemp cultivation for over 25 years. The EU oversees hemp seed distribution and, since 1971, has offered subsidies to farmers who grow hemp. The United Kingdom in 1993 and Germany in 1996 authorized the granting of permits for hemp production. Canada in 1994 and Australia in 1995 began permitting business and universitiesto grow research plots, and Canadian farmers are now preparing to grow hemp in anticipation that the Government will approve final hemp cultivation regulations in the next few months.

Both the North American Free Trade Agreement and the General Agreement on Tariffs and Trade recognize industrial hemp as a non-drug commodity. The global retail hemp market has been estimated at $100 million.

However, due to the prohibitions of the Controlled Substances Act -- as well as the DEA's refusal to approve a number of individual applications to grow industrial hemp -- the U.S. domestic industrial hemp industry is limited to sales of imported hemp products or products made domestically from imported hemp fiber or seeds. The modest but growing U.S. hemp industry does $20 to $40 million in business annually. There are more than 200 active hemp businesses in this country. Imported fertile hemp seeds are immediately sent to a DEA-approved facility for sterilization before being distributed. Hemp also grows wild in parts of the United States.

C. Industrial hemp cultivation would improve our economy and U.S. competitiveness

Based on years of discussion and research, petitioners believe that permitting the domestic production of industrial hemp would increase business opportunities and profits for U.S. firms and farmers, create jobs, improve America's balance of trade, reduce toxic chemical and other pollution, enhance opportunities for sustainable agricultural systems, and improve national security by conserving natural resources.

The climate of the United States -- particularly northern temperate regions -- is well suited to the cultivation of industrial hemp. Moreover, because proposed changes in tobacco regulation are expected to reduce the demand for tobacco, farmers in states like Kentucky and Tennessee are seeking to invest in a promising and useful new crop, and some of them believe that hemp may be that crop. As a recent publication from John Deere states, "Farmers hope hemp can be restored to its former place as an important source of fiber for producing paper, textiles, rope, and other products."

In fact, hemp has a wide range of uses today, and promising new technologies have made and will make hemp production and products ever more profitable for producers and useful for consumers.

Cultivation of industrial hemp can help address the worldwide shortage of fiber and a U.S. shortage that requires the U.S. to import most of the paper pulp we use. In 1916 a Department of Agriculture report concluded that, over 20 years, one acre of hemp would yield as much pulp for paper as four acres of trees. U.S. Dept. of Agric. Bulletin No. 404, Dewey & Merrill, "Hemp Hurds As Papermaking Material," at 24 (1916). Nearly 80 years later, in 1993, a study by the Dutch government reached the same conclusion. Similarly, Curtis Koster, Manager of New Business Development at International Paper, says his research shows that industrial hemp can produce two to four times more per acre than southern pine, the standard tree used for paper in the United States. And in a recent report, a U.S. Department of Agriculture researcher concluded that hemp could profitably be used as a fiber source for the paper industry. Houtman, "Market Analysis for Hemp Fiber as a Feed Stock for Papermaking," USDA, Forest Service, Forest Products Laboratory, Madison, WI, 1997.

Paper made from industrial hemp is stronger, can be recycled more times, and lasts longer than paper from trees. Companies around the world are producing hemp papers for a range of applications. For example, the U.S. corporation Kimberly-Clark operates a mill in France where it produces hemp paper for books and cigarettes.

Industrial hemp is widely used in textiles, to make clothing, yarn, rope, thread, camping equipment, draperies, backpacks, luggage, and other products.

Hemp has valuable qualities as a clothing material. It takes color and absorbs moisture better than cotton, is breathable and extremely durable, softens when washed, and needs little ironing. Hemp can be blended with cotton to produce clothing combining the advantages of both fibers. Armani, Calvin Klein, Ralph Lauren, Lands End, J. Peterman, the Walt Disney Company, Esprit, Nike, Converse, and Adidas are among the companies who have offered or have announced plans to offer clothing or shoes made from hemp.

Hugh S. McKee of Flaxcraft, Inc., of New York, recently wrote to Erwin Bud Sholts, Director of Agricultural Diversification and Development at the Wisconsin Department of Agriculture, "I am extremely interested in hemp textile fiber for spinning and weaving in U.S. mills, as depending on fiber produced in Eastern Europe or China is not at all satisfactory." Interface Corporation is considering hemp as a substitute for the petroleum-derived backing for its carpets.

Moreover, new innovations hold the promise of making textiles from hemp even more lucrative. Researchers at Silsoe Research Institute in Great Britain have developed a "decorticator" device which can rapidly extract fiber from the stems of crops like hemp and flax, and the machine is undergoing commercial trials. (A predecessor version of the decorticator, developed in the 1920s, led Popular Mechanics to call hemp the "new billion dollar crop.")

Until the 1930s, most paints were made from hemp and linseed oils, and hemp can be used today to make paints, dyes and varnishes.

Hemp can produce high-quality absorbents for use in horse stables, cat litter or oil spills. Hemp is more absorbent than wood shavings and composts faster.

Hemp can be used to make soaps, shampoos, moisturizers, and cosmetics, as well as laundry detergent and household cleaning products.

Hemp contains cellulose, a basic building block of many plastics. Until the 1930s, cellophane, celluloid and other plastic products were often made from hemp and other plants. Hemp could again make a range of goods which are now manufactured from petroleum products.

Daimler-Benz is using hemp in its dashboards and interior door panels. A Japanese company produces metal-like hemp to make lighter and stronger bicycle frames and other products. A French company makes building insulation. An Australian company makes hemp surf boards. An Oregon company has developed fiberboard made from imported hemp.

Hemp seed oil could be used for a number of applications. For example, it could be used as a motor oil or an all-purpose lubricant. Combined with methanol, it could create a fuel that burns much cleaner than petroleum diesel. The U.S. Department of Energy is evaluating the potential of hemp in current biofuels projects. The prospect of fuel from plants like industrial hemp holds out the promise of self-sustaining agricultural communities where farmers could use cleaner and locally-produced energy to work their crops.

Industrial hemp seeds could also meet a range of food needs. Hemp seeds are rich in protein, calcium, magnesium, potassium, Vitamin A, and important fatty acids. They can be used to make nutritious substitutes for dairy products like milk, cheese, butter and ice cream. They can also make breads, pastries, meatless hot dogs and patties, and cooking and salad oils. A California company is producing coffees mixed with roasting hemp seeds, a blend that reportedly reduces the stomach upset regular coffees can cause. Brewing companies in Maryland and California are using hemp seeds as an ingredient in their beers. Though imported hemp seeds are available today for such purposes, the sterilization that is required before distribution reduces nutritional value while hastening rancidity.

Hemp seeds can also be used as birdseed and in feedstocks for farm animals.

D. Use of industrial hemp products in place of other products would benefit our environment and national security

Industrial hemp cultivation and production would greatly benefit our environment by reducing use of toxic chemicals and depletion of natural resources. Hemp could also benefit our national security by reducing our reliance on petroleum.

Naturally resistant to pests and funguses, hemp can be grown with little or no use of pesticides, herbicides or fungicides, unlike crops such as cotton, corn or tobacco. The Environmental Protection Agency estimates that cotton cultivation required 39 million pounds of pesticides in 1993 -- about 30 percent of all pesticide use nationwide. And unlike cotton, hemp's taproots penetrate the soil, bringing nutrients to the surface, helping to aerate the soil and protecting the land from erosion.

Industrial hemp itself functions as an effective organic herbicide, capable of suppressing weeds without resort to chemicals. Grown in rotation with other crops, hemp could play an important role in sustainable or organic agricultural systems because of its capacity to clear fields of weeds.

Using hemp to make paper also reduces use and emissions of harmful chemicals. Compared to wood, fewer chemicals are required to convert hemp into paper pulp. And because hemp fibers are naturally a whiter color than wood, less bleaching is required to produce standard white paper.

Because hemp can substitute for wood, has a higher per-acre yield, and can be recycled more times than wood paper, hemp cultivation could save many forests.

Hemp products tend to biodegrade faster than similar products made from other sources. For example, a German company has created a hemp oil laundry detergent which it contends will have the advantage of high biodegradability.

As a replacement for petroleum-based products, hemp use could ultimately reduce toxic emissions from manufacturing. As a substitute for petroleum fuel, plant-based fuels could reduce air pollution. And with domestic gasoline consumption at record levels, and U.S. reliance on foreign oil on the rise, it is in our national interest to consider all promising alternative fuel sources.

The value of industrial hemp was recently re-affirmed by the U.S. Government. By Executive Order, the President of the United States has designated hemp as a strategic crop of importance to national security. E.O. 12919, June 3, 1994, 59 Fed.Reg. 29525. The Executive Order, entitled "National Defense Industrial Resources Preparedness," states, "The United States must have an industrial and technology base capable of meeting national defense requirements, and capable of contributing to the technological superiority of its defense equipment in peacetime and in times of national emergency." Id., at sec. 102. Under the Executive Order, the President has delegated to the Secretary of Agriculture, with respect to food resources, the statutory authority, as provided by section 101 of the Defense Production Act of 1950, 64 Stat. 798, 50 U.S.C. App. sec. 2061 et seq., to require priority treatment of contracts that promote national defense and to allocate materials and services to promote the national defense. E.O. 12919, at sec. 201. "Hemp" is one of the food resources designated by the Executive Order. Id., at sec. 901(e).

E. Many state officials, businesses and farmers support industrial hemp research and/or cultivation

In the past two years, lawmakers in ten states -- Colorado, Hawaii, Iowa, Kansas, Minnesota, Missouri, North Dakota, Oregon, Vermont, and Virginia -- have enacted or introduced legislation permitting study or research on, or actual cultivation of, industrial hemp. In two other states -- Wisconsin and Kentucky -- legislative proposals, with strong support from farm groups, have circulated. Vermont and Hawaii each enacted legislation in 1996 authorizing studies of the economic potential of industrial hemp, and North Dakota and Virginia legislators adopted similar provisions in 1997. California voters are presently collecting signatures for a 1998 ballot initiative to permit hemp cultivation. And Representatives of government, businesses, farmers and environmental groups formed the North American Industrial Hemp Council in early 1996 to promote commerce in hemp.

F. Permitting hemp cultivation under USDA license would be consistent with the Controlled Substances Act and the statutes governing agriculture and would not weaken enforcement of marijuana prohibitions

1. Hemp is not properly classifiable in any of the five schedules established by the Controlled Substances Act

Under the 1970 Act, the Attorney General may reschedule a substance -- or remove it from federal scheduling altogether -- if the substance does not meet the criteria established for the schedule in which it has been placed. See 21 U.S.C. sec. 811(a)(1) & (2). By regulation, 28 C.F.R. 0.100(b), the Attorney General has delegated this authority to the DEA.

Under the Act, at 21 U.S.C. sec. 811(c), the DEA makes its scheduling decision by reference to eight factors concerning the substance:

1.Its actual or relative potential for abuse.

2.Scientific evidence of its pharmacological effect, if known.

3.The state of current scientific knowledge regarding the drug or other substance.

4.Its history and current pattern of abuse.

5.The scope, duration, and significance of abuse.

6.What, if any, risk there is to the public health.

7.Its psychic or physiological dependence liability.

8.Whether the substance is an immediate precursor of a substance already controlled under [title 21 of the U.S. Code].

Industrial hemp, as defined in the proposed rules as Cannabis sativa with less than one percent THC, has no genuine potential for abuse, because it cannot reasonably be considered to produce a psychoactive effect. Industrial hemp, in fact, often contains as little as 0.05 percent THC. But even at the proposed one percent threshold, according to William M. Pierce, Jr., Associate Professor of Pharmacology and Toxicology, University of Louisville School of Medicine, under "the most fundamental principles of pharmacology, it can be shown that it is absurd, in practical terms, to consider industrial hemp useful as a drug."

In the first place, in addition to its low THC level, industrial hemp contains relatively high levels of cannabidiol (CBD), which effectively acts as an antidote to THC. A CBD:THC ratio of 2:1 largely suppresses THC's psychoactive effects. Typically, industrial hemp has a CBD:THC ratio of 5:1 or higher.

According to Professor Pierce, to obtain a psychoactive effect with one percent THC hemp, the user would have to smoke 10 - 12 cigarettes containing hemp in a "very short period of time." "This large volume [and] high temperature inhalation of vapor, gas and smoke" writes Professor Pierce, "would be difficult for a person to withstand, much less enjoy." Moreover, according to Professor Pierce, attempting to achieve a psychoactive effect by orally ingesting hemp would require consumption of hemp equivalent in mass to the fiber content found in two to three doses of a high-fiber laxative. Thus, unpleasant side effects prevent abuse of industrial hemp as a drug.

The fact that there is some THC in industrial hemp does not mean that the crop has any serious potential for abuse. It is possible to get drunk on "non-alcoholic" beer, which actually contains a small amount of alcohol, but no one does, because the volume required would be too great. Some mouthwashes contain substantial amounts of alcohol, but, again, there is insufficient reason for authorities to worry about abuse. Nutmeg contains a psychoactive substance, but consumption sufficient to produce an effect would cause unpleasant side effects.

Some law enforcement officials have claimed at industrial hemp can be cooked down to draw out a thick substance with a higher THC concentration, and that users could obtain a psychoactive effect by ingesting this substance orally. But as Paul G. Mahlberg, professor of biology at the University of Indiana and the author of over thirty papers on Cannabis issues, has noted, such a substance would contain many products other than THC (including CBD, which generally serves to counteract the effects of THC), the process could be dangerous, and there are far cheaper ways to produce THC.

Thus industrial hemp has no real potential for abuse, and it therefore cannot properly be classified as a Schedule I controlled substance, a classification that requires a "high potential for abuse." 21 U.S.C. sec. 812 (b)(1)(A). At the same time, there is no basis to classify industrial hemp under Schedules II through V, because each requires that the substance have "a currently accepted medical use in treatment in the United States" (or, in the case of Schedule II substances, such a use or "a currently accepted medical use with severe restrictions"). There is no currently accepted medical use for industrial hemp. The provisions of the Controlled Substance Act -- concerned with drugs -- are simply not suited to a non-drug crop like industrial hemp. There is no basis for classification in any of the Act's five schedules.

Thus it would be entirely appropriate for the Administrator to simply remove industrial hemp from the coverage of the Act.

2. Allowing USDA licenses for hemp cultivation is a reasonable compromise that would not in any respect undermine law enforcement

Although industrial hemp is not properly classifiable in any of the Act's five schedules, petitioners do not seek complete delisting of industrial hemp. We recognize that unregulated trade in industrial hemp would create strong concerns -- whether warranted by the facts or not -- in the law enforcement community about enforcing laws with respect to marijuana. Accordingly, the proposed DEA rule would formally maintain industrial hemp as a controlled substance except when possessed by a person holding a USDA license to cultivate industrial hemp.

Indeed, the proposed rules are designed to meet all legitimate law enforcement concerns. At the same time, the proposed rules would not overburden farmers and businesses who wish to produce industrial hemp. Administration of the hemp program would be under the control of USDA, rather than DEA, owing to USDA's greater experience in working with crops and farmers.

a. The proposed licensing system

The proposed rules would create a USDA licensing process comparable, but not identical, to the present system of DEA registration with respect to other controlled substances. See 21 U.S.C. secs. 822, 823 and regulations promulgated thereunder.

The proposed rules each define "industrial hemp" as any specimen of Cannabis sativa L. with a THC concentration of one percent or less. They further define "USDA-certified industrial hemp seeds" as seeds that are certified by the Secretary of Agriculture (or an authority or facility approved by the Secretary to provide such certification) to have derived from industrial hemp plants.

The proposed rules would permit any person to possess, cultivate, manufacture or process plants grown from USDA-certified industrial hemp seeds so long as (1) such industrial hemp is cultivated only from seeds certified by the USDA or a USDA-approved facility; (2) the person submits to the USDA an annual license application, with information sufficiently specific to satisfy the USDA, disclosing the precise location of all facilities where the person will produce industrial hemp; (3) neither the licensee, nor any officer or director thereof, nor any employee thereof who is involved or foreseeably will be involved with the licensee's possession, cultivation, manufacture, or processing of industrial hemp, has any prior federal or state felony convictions with respect to controlled substances; (4) the licensee agrees to accept USDA inspections; and (5) the licensee pays an annual application and license fee of $25.

The one percent THC ceiling on plants from which USDA-certified seeds will derive will permit farmers to use a variety of hemp seed types without permitting the cultivation of plants with any genuine risk of abuse as a drug. The requirement that holders of these Industrial Hemp Licenses cultivate only from USDA-approved seeds, rather than permitting cultivation from seeds produced from the licensee's own fields or outside sources, is meant to ensure tight control over the THC concentration of each year's hemp output.

Under the proposed USDA rule, a two-year Industrial Hemp License would become effective 45 days after the date of submission of a license application unless, prior to the effective date, the Secretary determined to deny the application. Denial, suspension or revocation of an Industrial Hemp License Application would be permitted if, but only if (1) one or more components of the Industrial Hemp License Application were incomplete or lacking in reasonable detail, and the license applicant failed, after reasonable notice by the Secretary, to correct such deficiencies; (2) the application contained false statements with respect to material facts; (3) the license applicant or licensee failed or refused to facilitate reasonable USDA inspection; (4) the license applicant or licensee cultivated Marihuana (Cannabis sativa L.) that was not derived from USDA-certified industrial hemp seeds; or (5) the license applicant or licensee, or an officer or director thereof, or any employee thereof who was involved or foreseeably would be involved with the license applicant or licensee's possession, cultivation, manufacture, or processing of industrial hemp, had been convicted of a federal or state felony with respect to controlled substances.

The proposed rules would also permit persons to obtain licenses to import, possess, cultivate, manufacture, and process fertile industrial hemp seeds, and distribute such seeds to Industrial Hemp Licensees, so long as (1) the person submits to the USDA an annual license application, with information sufficiently specific to satisfy the USDA, disclosing the precise location of all facilities where the person will produce industrial hemp seeds; (2) neither the Industrial Hemp Seed licensee, nor any officer or director thereof, nor any employee thereof who is involved or foreseeably will be involved with the licensee's importation, possession, cultivation, manufacture, or processing of industrial hemp seeds, has any prior federal or state felony convictions with respect to controlled substances; (3) the Industrial Hemp Seed licensee agrees to accept USDA inspections; (4) the Industrial Hemp Seed licensee agrees to comply with USDA procedures for seed certification to ensure that its seeds have derived from industrial hemp plants; and (5) the Industrial Hemp Seed licensee pays an annual application and license fee of $25.

A two-year Industrial Hemp Seed License would become effective 60 days after the date of submission of a license application unless, prior to the effective date, the Secretary determined to deny the Application. Denial, suspension or revocation of an Industrial Hemp License Application would be permitted if, but only if (1) one or more components of the Industrial Hemp Seed License application were incomplete or lacking in reasonable detail, and the license applicant failed, after reasonable notice by the Secretary, to correct such deficiencies; (2) the application contained false statements with respect to material facts; (3) the license applicant or licensee failed or refused to facilitate reasonable USDA inspection; (4) the license applicant or licensee failed to comply with USDA procedures for seed certification; or (5) the license applicant or licensee, or an officer or director thereof, or any employee thereof who was involved or foreseeably would be involved with the Licensee's importation, possession, cultivation, manufacture, or processing of industrial hemp seeds, had been convicted of a federal or state felony with respect to controlled substances.

Such Industrial Hemp Seed Licenses would permit private businesses and producer cooperatives, working in coordination with the USDA, to supply fertile hemp seeds for use by farmers and businesses holding Industrial Hemp Licenses.

Under the proposed rules, persons eligible for exemption from the registration and registration fee requirements of the Controlled Substances Act and regulations promulgated thereunder, see 21 C.F.R. Part 1301, would be exempt from USDA industrial hemp license requirements.

In the event the Secretary determined to deny, suspend or revoke an Industrial Hemp License or Industrial Hemp Seed License of any person, USDA proceedings with respect to an order to show cause and hearing procedures would be governed by rules comparable to those governing such proceedings with respect to DEA registrations under the Controlled Substance Act. See 21 C.F.R. sections 1301.37 to 1301.46. Judicial review of an order of the Secretary under this Rule would be governed by the provisions of the Administrative Procedures Act (5 U.S.C. sections 701-706).

The Secretary would have the authority to inspect, or cause to be inspected, the establishment of an Industrial Hemp Licensee or Industrial Hemp Seed Licensee for the purpose of determining compliance with the proposed rules. Petitioners would expect that reasonable rules for USDA inspections could be developed during the rulemaking proceedings.

To emphasize that the proposed rules permit industrial hemp possession only by licensed persons, and in an effort to avoid any unwarranted arguments in criminal prosecutions against marijuana offenders, the proposed rules provide that nothing therein shall be construed to authorize, support, prohibit or otherwise affect in any manner, with respect to any person who is not an Industrial Hemp Licensee or Industrial Hemp Seed Licensee, the use, as a defense in a criminal proceeding, of the THC concentration of the marijuana at issue in the proceeding. Under prevailing case law, possession of any variety of Cannabis sativa L. is unlawful, provided that the substance contains some amount of THC. See, e.g., United States v. Kelly, 527 F.2d 961 (9th Cir. 1976); United States v. Walton, 514 F.2d 201 (D.C.Cir. 1975). The proposed rules could not and would not bar defendants in criminal cases from seeking to raise a defense at variance with this prevailing law -- a defense focusing on the THC level -- but nor would the rules authorize or support such a defense.

The proposed rules provide, finally, that nothing therein shall be construed to affect in any manner the existing general exemptions from prohibition on Cannabis products contained in 21 U.S.C. section 802(16): the mature stalks of the plant Cannabis sativa L., fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination. Thus, the promulgation of the proposed rules would not alter the rights of licensed or unlicensed persons to possess or distribute such products.

b. Government controls under the proposed licensing system

Extensive cultivation of industrial hemp would not, by itself, pose any risk of increased drug abuse because, as noted above, there is no realistic risk that individuals will obtain a psychoactive effect from smoking or ingesting industrial hemp. Thus, there would be little or no incentive for drug dealers to attempt to steal industrial hemp from the fields and facilities of industrial hemp licensees.

There is no evidence that diversion of industrial hemp crops for drug purposes was a problem under the Marijuana Tax Act regime, which permitted industrial hemp cultivation. An official of the Rens Hemp Company of Wisconsin told a Senate hearing in 1945, "In the 30 years we have operated and grown large acreages we have never heard of one instance where there was an illicit use made of the leaves of this hemp plant.... We have never heard of anybody trying to get into a field and take the leaves for illicit purposes." An Illinois hemp plant official informed the Senate committee that his firm was "on the alert and made considerable effort to determine if this hemp plant was being harvested by anyone for narcotic uses," but it "never observed anyone in the act of gathering the plant for this purpose." And a senior USDA official told the committee he knew of no cases in which anyone tried to divert industrial hemp leaves or flowers from U.S.-owned or private hemp mills.

Indeed, although industrial hemp grows wild and unguarded in many U.S. locations today, petitioners are not aware of any evidence that drug dealers exploit these crops for street sales.

Accordingly, the proposed rules would not require licensees to observe prescribed security requirements to protect their crops from diversion; instead, licensees would be free to determine, based on their own assessments of the economic costs and risks, how much security to provide. Such an approach would prevent licensees, particularly small farmers, from facing security requirements that might make industrial hemp cultivation prohibitively expensive. However, petitioners stand ready to work with Government officials to develop security standards that are aimed at addressing reasonable concerns and are consistent with the economic viability of hemp cultivation.

The British Home Office Drugs Branch, which issues licenses for industrial hemp cultivation in the United Kingdom, appears to require only modest security efforts on the part of hemp growers. Inspectors from the Drug Branch seek to ensure that the crop is grown in fields "where there is poor public access and visibility of the crop. Where minor roads abut the growing site vehicular access to the field should not be possible, for example blocked using straw bales." Letter from Wendy Nevill, Drugs Inspector, United Kingdom Home Office, SE Region Drugs Inspectorate, to Larry Thomason, State Representative, Missouri House of Representatives, dated April 23, 1997 (Petition Attachment 1). The Drugs Branch reports that since hemp cultivation began in 1993, "there have been very few thefts of crop and diversion from licit sources has been insignificant." Id.

In opposing industrial hemp cultivation, some have expressed an odd concern for the consumer rights of purchasers of illicit marijuana, contending that drug dealers will increase their sales volume by mixing hemp and marijuana and distributing this lower-potency mixture on the street. But such a possibility could produce only two results: where the mixture was sold, the psychoactive effect on users would be lowered and buyers might feel their money was wasted, effects that presumably would be a positive result for law enforcement; and, ultimately, dealers selling such a mixture would lose repeat-business clientele until they went back to dealing pure marijuana, a final outcome that would have no net effect on law enforcement or marijuana use.

Nor would the industrial hemp licensing program outlined in the proposed rules increase the ability of individuals to cultivate marijuana.

Under the proposed rules' system of USDA inspections, it would be extremely foolish for anyone to grow marijuana in a licensed industrial hemp field -- fields potentially subject to frequent USDA monitoring. Were they inclined to break the law and cultivate marijuana, licensed hemp growers would surely be safer producing the marijuana in a corn field or a greenhouse than in the one location subject to regular government review.

The clear visual differences between industrial hemp and marijuana would ensure detection -- from the ground or overhead -- if the two plants were grown in the same field. Industrial hemp, when planted to produce fiber, is a tall slender plant -- growing to heights of ten to fifteen feet -- with few branches. Plants are grown in close proximity -- about four inches apart -- in order to minimize branching. By contrast, marijuana plants grown to produce buds -- the smokable component of the plants -- are full, bushy, and shorter (three to five feet) and require more space to grow. Hemp plants tend to be yellow to light green, whereas marijuana plants are darker. Licensed hemp growers would also be deterred from growing marijuana in hemp fields by the possibility of USDA testing of crops for THC content.

If any licensed hemp grower was foolish enough to ignore the high risk of detection and grow marijuana in a hemp field, the grower would face a second obstacle: the incompatibility of these two distinct varieties of the Cannabis sativa plant. Hemp grown for fiber matures for harvesting in about 90 days, while marijuana generally requires 150 days. Marijuana harvested along with the hemp would be removed from the soil before it had produced its smokable buds. Moreover, the industrial hemp, with its low THC levels, could cross-pollinate the higher THC marijuana, substantially reducing the potency of the crop and subsequent generations. Pollen from male hemp plants destroys the potency of female marijuana plants.

Consistent with the logical arguments are the empirical facts: Petitioners know of no evidence of increased marijuana production in other Western countries -- such as Canada, the United Kingdom, France and Germany -- that now permit industrial hemp cultivation.

c. The proposed license system and the current controlled substances regulatory regime

The proposed rules outline a licensing scheme that shares characteristics with, but differs in several respects from, the standard DEA controlled substance registration process. Most importantly, there is the assignment to the USDA of authority for granting and overseeing licenses. Petitioners believe the differences are fully warranted in light of several factors: the lack of any genuine risk of abuse with respect to industrial hemp; the likelihood that many industrial hemp producers would be small businesses and farmers who would not meet the traditional profile of DEA registrants; the varied purposes to which industrial hemp would be applied; and the resulting higher volumes of material produced -- as compared with drugs manufactured under DEA registration -- which could be expected.

Adopting the licensing plan outlined in the proposed rules would be fully consistent with the statutory scheme and provisions of the Controlled Substances Act. In the first place, because the Attorney General and, through her delegation, the DEA Administrator have the authority to remove industrial hemp from the Act's schedules entirely, it would seem to follow that the Administrator would be empowered to, without entirely removing a substance from the schedules, remove it from some of the requirements for treatment of controlled substances.

But even if one were to assume that the DEA Administrator lacked such authority, nothing in the provisions of the Act would bar the Administrator from adopting the proposed DEA rule. Section 823 of Title 21, United States Code, sets criteria for permitting distribution and manufacture of Schedule I controlled substances, such as Cannabis sativa. Manufacture is permitted if the Attorney General (acting through the Administrator) determines that it is consistent with the public interest and U.S. treaty obligations. In determining the public interest, the statute directs the Attorney General to consider: (1) maintenance of effective controls against diversion "into other than legitimate medical, scientific, research, or industrial channels" by limiting manufacture to establishments "which can produce an adequate and uninterrupted supply of these substances" for such legitimate purposes; (2) compliance with applicable State and local law; (3) promotion of technical advances and manufacturing and development; (4) prior convictions of the applicant with respect to such substances; (5) past experience in manufacture of the substance and effective control against diversion; and (6) such other factors as may be relevant to the public health and safety. 21 U.S.C. sec. 823(a). Similar factors govern registrations for distribution of controlledsubstances. 21 U.S.C. sec. 823(b).

The proposed rules would be fully consistent with these statutory requirements. The industrial hemp and hemp seed licenses envisioned by the proposed rules would be consistent with U.S. obligations under the 1961 United Nations Convention, since that treaty permits industrial hemp cultivation. The USDA licenses would be aimed solely at producing hemp for legitimate industrial purposes. The licenses, like DEA registrations with respect to other controlled substances, would comply with state laws. The licenses would certainly promote technical advances in using hemp for a range of industrial applications. A bar on licenses for persons with prior drug convictions would apply. Controls against diversion would not be necessary, given that industrial hemp itself has no risk of abuse but, as noted above, petitioners would be willing to accept reasonable standards for control. Moreover, USDA inspection rights would allay concern that hemp fields could be used to camouflage marijuana cultivation. Finally, public health and safety overall would be enhanced by cultivation of a crop that could reduce use of toxic chemicals in agriculture and manufacturing, reduce emission of pollutants from fuels, and reduce depletion of trees, petroleum products and other precious national resources.

Section 827 of Title 21 establishes record keeping and reporting requirements for DEA controlled substance registrants. Petitioners believe that such requirements -- designed largely for the laboratory production of chemicals -- are ill-suited to agricultural production of industrial hemp, particularly by small farmers. Fortunately, subsection 827(c)(3) allows the Administrator to waive these requirements where application "is not necessary for carrying out the purposes of this title," as would be the case with respect to industrial hemp under the proposed USDA license system.

In sum, nothing in the Controlled Substances Act prevents enactment of the proposed rules.

d. The proposed license system and the existing authorities of the USDA

At the same time, petitioners' proposed system for regulation of industrial hemp is fully consistent with authorities already possessed by the USDA under governing statutes and regulations.

USDA has clear existing authority to inspect and regulate hemp seeds. Under the Federal Seed Act, 7 U.S.C. sec. 1551 et seq., and regulations enacted thereunder, USDA officials are authorized to draw samples of, secure information and inspect records pertaining to, and otherwise inspect seeds and screenings subject to the act.7 CFR sec. 201.37. Hemp is considered an "agricultural seed" subject to the Act. 7 CFR 201.2(h). Hemp is mentioned repeatedly in the regulations implementing the Federal Seed Act. See 7 CFR 201.43, 201.46, 201.56-12, 201.58, 201.101, 201.208, 201.221a, 201.222, 201.361.1, 201.361.5. The Seed Act requires detailed labeling -- including labeling as to "kind or variety" -- of seeds transported in commerce. 7 U.S.C. sec. 1571. And the regulations also include grower record-keeping requirements with respect to seed "purity," i.e., "the kind, variety, or type" of seeds grown. 7 CFR sec. 201.7. USDA is also accustomed to exercising broad inspection authorities across a range of regulated activities. See footnote 47, supra.

Moreover, as previously noted, under Executive Order 12919, issued in 1994, the President has delegated to the Secretary of Agriculture the statutory authority to manage "food resources," expressly including "hemp," in order to promote national security.

Accordingly, if DEA enacted a rule, along the lines proposed by petitioners, to permit industrial hemp cultivation, it would be entirely appropriate to charge USDA with authority over the contemplated industrial hemp regulatory program.

IV. Conclusion

The proposed rules create a workable framework, fully consistent with the Controlled Substances Act and the statutes governing agriculture, for enhancing our economy, environment and national security through the production of industrial hemp. This result can be accomplished under the proposed rules without weakening in any respect government efforts to prevent the use of marijuana. Petitioners stand ready to demonstrate at a hearing the factual assertions in this petition and to work with the DEA and USDA to create final rules that will address the legitimate needs and concerns of all interested parties.

Respectfully submitted,

Jay Halfon