2002: DEA’s THC Clarification Causes Confusion

DEA’s THC Clarification Causes Confusion. Natural Foods Merchandiser, March 2002, p. 18, 20, by Mitchell Clute.

On Oct. 9, the U.S. Drug Enforcement Administration issued a clarification of the Controlled Substances Act of 1972 stating that hemp foods containing any detectable levels of THC, the psychoactive chemical found in marijuana, will henceforth be considered illegal drugs.

Marijuana is listed as a Schedule 1 controlled substance, and the interpretive rule under which the DEA is now operating puts hemp foods containing even trace amounts of THC in this same category. The DEA gave retailers 120 days—until Feb. 9—to remove all such products from shelves.

[DEA’s Interpretive Rule was requested by Hemp Industries Association (HIA) to rule on the legality of hemp foods, without the knowledge of its own Chair of its Food and Oil Committee (me). When DEA legalized 96% of all hemp products (no max THC) with the Rule in response to its new mission after 9/11, it answered every investor’s first question “Is it legal to DEA?” I was very happy to now be able to answer an unequivocal yes.

2002: DEA’s THC Clarification Causes Confusion

I had a “zero THC” policy for my foods, as I understood we had to quell consumer fears about “getting high” right away. It was always their first question: “will it get me high or flunk a drug test?” I attribute the early and rapid success of hemp foods in large part to that policy. DEA even mentioned my “zero THC” policy in the subsequent Ninth Circuit Court of Appeals proceedings, as proof that it was possible to achieve. Both sides used my work to plead their cases, sometimes even the same page.

2002: DEA’s THC Clarification Causes Confusion

What “zero THC” meant was that since all hempseed had to be imported, the U.S. Customs THC test was the pertinent standard, which had a cut-off of 1 ppm in USCL Method F0-03 issued 08/00. Later, HIA instituted its TestPledge program to convince consumers they couldn’t test positive for THC from hemp foods, thus preventing law suits. That entirely voluntary, unregulated and unenforced standard was 1½ ppm, which means HIA and VH destroyed the emerging hemp foods market for a mere ½ ppm, costing the industry significant valuable momentum. Organic momentum for a new industry is a gift from God, and was killed off just to create a new lobbying mission for VH. Adding further irony to the HIA destroying the hemp food market for years, hemp’s biggest value-driver at the time and the first major development in hemp in 12,000 years, is that the US Customs cut-off was 1 ppm of delta-9 THC, whereas TestPledge was 1½ ppm Total THC, actually several times more-restrictive than Customs. Yes, HIA actually required less THC than DEA, by an order of magnitude or more, yet sued DEA over its more-lenient standard.

2002: DEA’s THC Clarification Causes Confusion

What killed the hemp food market for 2½ years, and almost Canadian hemp as a result, was those with no skin in the game (not in the hemp food business) at HIA and Vote Hemp (VH) turning it into a very loud public controversy. Instead of quietly negotiating an alternative, or waiting for actual damages or enforcement, or using this as a chance to improve quality and comply, or listening to those of who were actually doing 90% of the business thus had the greatest burden of compliance but were fine with the rule, they saw it as a way to continue their manufactured victim narrative: the “mean ole gubmint picking on hemp again.” Once the retailers heard the bogus “DEA bans hemp foods,” they panicked and stopped carrying hemp foods, literally fearful of a DEA raid at any moment. Distributors took their returns, and then demanded we accept them in turn and pay them back. As an ethical vendor, I had no choice but to agree, logic and truth be damned. A tiny percentage of hemp food companies existing at the time joined the suit. RR]

The move has generated a firestorm of controversy among natural foods producers and consumers. The mainstream media has added to the controversy by misreporting the DEA action as a ban on all hemp foods. This, in turn, has caused lost business for manufacturers because many retailers and distributors think all hemp foods must be removed from store shelves. The DEA move has also given rise to several legal challenges by industry groups and members.

For example, the Occidental, Calif.-based Hemp Industries Association, a group of natural products manufacturers, has challenged the DEA’s interpretation in court. David Bronner, president of Dr. Bronner’s Magic Soaps of Escondido, Calif., is spearheading this effort. The group is challenging the DEA’s ruling before the Ninth Circuit U.S. Court of Appeals.

2002: DEA’s THC Clarification Causes Confusion

[Dr Bronner’s had no hemp food business until buying Alpsnack around this time, as it looked odd that a soap company was suing DEA over food. Buying micro-producer Alpsnack was the quickest and cheapest way to “be in the hemp food business.” It also appropriated my trade name “HempNut”. RR]

But the DEA doesn’t see it that way. According to Will Glaspy, a DEA spokesman who has been widely quoted on the issue. “THC is a controlled substance; it is a drug, so foods containing controlled substances would be illegal. The decision didn’t change anything, it just clarified a misunderstanding. If a product had THC before Oct. 9, it was illegal then.”

Indeed, some in the industry have expected the DEA’s action. The new rule makes official what has been unofficial policy since at least August 1999, when the DEA seized shipments of sterilized hemp seed produced by Kenex Ltd. of Ontario at the Canadian border. (See “DEA Stops Hemp Trade Cold,” NFM, November 1999.) The seed, bound for hemp foods manufacturer Nutiva Inc. of Sebastopol, Calif., contained 14 parts per million THC. The DEA said at the time that it had a zero-tolerance policy regarding THC.

[The actual reason for this was that Kenex wrote on export documents “Contains <10 ppm THC,” an admission under penalty of perjury of a RICO felony in the zero-tolerance USA. I personally warned Kenex months earlier why it was a mistake to do so if an eagle-eyed inspector saw it, and obviously was correct. I was the only Kenex customer not asked to return a shipment, because that statement was absent in my documents in the one batch I bought from Kenex. This fiasco became known as the “US Hemp Embargo” of 1999. RR]

[…]

              But not everyone in the hemp foods industry is surprised and outraged by the DEA’s actions. Richard Rose, president of HempNut of Santa Rosa, Calif., and founder of the Hemp Foods Association, doesn’t see the DEA’s action as a big deal.

“It’s not about THC, it’s not about hemp, it’s not about hemp foods,” he said. “It’s about the fact that you’re not supposed to have a controlled substance in food and put it in people’s bodies. That is one of the biggest ‘duhs’ of the year. It was obvious to me years ago, and for that reason we started working diligently seven years ago to make foods that have zero THC in them.”

“Folks have mischaracterized the DEA rule, and now we have a market that’s just dying.”

Rose said that it’s not difficult to remove THC from the seed: “It’s just another processing step.” And he doesn’t see any darker motive behind the DEA’s ruling. “It’s not different than saying there can’t be aflatoxin in peanuts,” he said. “It’s just another government regulation foisted on industry.”

His view is echoed by the DEA’s Glaspy, who told the Tucson Citizen: “I think there is a lot of misinformation out there, that we are trying to ban all hemp products. That is not the case. I think a lot of people have overreacted to this.”

[DEA doesn’t need to lie: if you don’t agree with whatever it orders, it’ll just send a SWAT team to put you in prison for years, the awesome power of the U.S. government behind it. HIA and VH contended that the DEA was lying, but years later they said DEA was not lying regarding CBD being illegal, a Schedule 1 controlled substance, and thus encouraging producers to abandon the emerging CBD industry. CBD was the biggest thing to happen to hemp since hemp foods, the value-driver world-wide and the reason hemp was finally legalized in the U.S. after 13 years of a bill being introduced in Congress every session. Yet, in 2014 HIA was opposed to it. RR]

In fact, Rose thinks that the hemp industry reaction to the rule has done more harm than good, giving many consumers and retailers the impression that all hemp foods are now illegal. “If they’d let this rule quietly go into effect, we could have quietly gone on with our business,” he said. “Instead, it’s a three-ring circus. Folks have mischaracterized the DEA rule, and now we have a market that’s just dying. Retailers are sending things back, distributors are not listing things. Wild Oats and Whole Foods almost pulled all hemp foods. There’s all this unfounded hysteria and mischaracterization. The idea that the DEA has banned hemp foods is just not true.”

Rose said the misinformation has devastated HempNut’s sales, a fact he finds ironic given that his company already sources zero-THC hemp seed and oil, and has never had any trouble from the DEA in regard to importing raw materials or its final products. He thinks the DEA’s primary motivation is to make sure people can’t use hemp foods as an excuse for failing drug tests, which are extremely sensitive to marijuana. Although it’s unlikely that someone could consume enough hemp foods to test positive, Rose said it’s not impossible.

Since the rule was issued, Rose has helped other companies source zero-THC ingredients and spent time explaining to retailers that his products are not in violation of the new rule. Regarding the Hemp Industry Association’s challenge to the DEA, he said. “I think it’s a very misguided effort by well-intentioned people— but the road to hell is paved with good intentions.”

[In his dissent to the ruling, Justice Kozinski called it “gratuitous” and that it relied on too many maybes. Once DEA lost this suit in 2004, it did not appeal. I consider that evidence that DEA was trying to legalize hemp foods like it always said, not ban it. However, it also soured DEA on ever doing the hemp industry a favor again. In fact, ever since the 2014 Farm Bill allowing states to grow hemp, DEA was a significant intimidator for hemp farmers, requiring a DEA 225 controlled substance handling permit to import viable hemp planting seed, showing up unannounced at hemp farms and demanding 12-foot security fences enclosing acres and acres of fields, security cameras for seed storage, and the like. No doubt it was directly attributable to the knock-on effects of this case.

HIA made money on it as DEA paid all attorneys’ fees ($200,000) and court costs, allowing HIA to keep donations from consumers and companies. Ironically, while their victim narrative was bogus originally, they created it in reality by suing DEA for legalizing hemp foods.

Without this suit I believe hemp would have been legalized around 2005. Since the suit was decided, HIA appeared to be more interested in protecting its members’ investments in Canadian hemp from the scourge of U.S. hemp farmers, fearing its biggest customer would become its biggest competitor. After the 2018 Farm Bill, we see that was a valid fear.

However, while the suit cost me $2.5 million and 8 years of intense work when the hemp food market crashed for years and I retired, years later the emerging CBD industry used the case known as HIA v DEA 2004 as legal cover, so it had some utility for the hemp industry. CBD would later become even bigger than hemp foods, faster, and farther around the world.

HIA in its early years was primarily a fiber and retailer group, with no interest in hemp foods. In the years 1995-2001 I founded and chaired its Food and Oil Committee and recruited hemp food companies to join, was Treasurer and brought it into IRS compliance, appointed the CPA firm it used for decades, was a Director, wrote and managed the Fiber Certification Program, gave it space at my Expo trade show booths for free, 5% of profits from the sale of HempRella and Hempeh Burger were donated to it, produced 2 members’ conventions and turned them into a profit-center contributing most of the association’s budget, while simultaneously lowering the cost for members to attend.

It’s safe to say that without my work growing it and bringing it into the modern hemp food era, it would never have had the credibility in hemp foods to sue DEA over it. In the early years, its officers and directors were skeptical of hemp foods, being fiber-focused. At the time of the suit, I was doing 90% of the hemp food business and bitterly opposed to suing DEA over a lie. As a result I was the subject of intimidation tactics, including questionable lab reports on my products, lawyers giving me a full-court press at trade shows, and a slander and libel campaign. They wanted to sue DEA so bad, they did all that and still accomplished exactly what they accused DEA of wanting: killing the hemp food industry.

As a 501(c)6 chamber of commerce type of organization with country club type by-laws, HIA works solely for the benefit of members, even if it is to the detriment of the industry. It nevertheless persists presenting itself as the voice of the entire industry. Many hemp old-timers like myself, and even a co-founder of HIA, oppose the organization’s failed policies. Today, it claims to be little more than a “cheerleader” for companies which pay to cheerlead for them. RR]

2002: DEA’s THC Clarification Causes Confusion

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