Our cannabis business lawyers are seeing a big uptick in both new clients interested in hemp and existing cannabis clients interested in hemp. This growing interest stems at least in part from hemp having so many uses, including for food, beauty products, textiles, and even construction (hempcrete).

Hemp and ImportingBoth hemp and marijuana are derived from the cannabis sativa plant, but they have very different characteristics. For years, marijuana has been bred for its mind-altering effects, which come from the Tetrahydrocannabinol (THC) in the plant. Marijuana is usually cultivated to produce the maximum amount of female flowering plants, which contain the highest concentration of THC. Hemp is usually not bred for THC and it typically contains only trace amounts of that cannabinoid. Hemp plants are primarily male and a do not produce flowers. Because hemp doesn’t produce flowers, hemp cultivators are unconcerned with factors that impact flower growth and, therefore, hemp is more commonly grown outdoors.

Despite the substantial differences between hemp and marijuana, the legal status of the two are intertwined. Under the federal Controlled Substances Act, marijuana does not include hemp or seeds “incapable of germination.” In Hemp Indus. Ass’n v. DEA, the Ninth Circuit held that the DEA cannot regulate all hemp products that also contain trace amounts of THC because Congress did not regulate non-psychoactive hemp when drafting the Controlled Substances Act. As a result of this ruling, manufacturing, distributing, and possessing hemp is not federally illegal, unlike with cannabis. However, growing hemp is prohibited without a permit from the DEA because at some point in the life cycle of the cannabis sativa plant the plant will inevitably produce marijuana, in addition to hemp. And no big surprise here, but the DEA rarely issues hemp cultivation permits and that has severely stunted hemp cultivation in the U.S.

The 2014 federal Farm Bill created more opportunities for hemp cultivation by allowing for industrial hemp cultivation without a permit from the DEA if done by a state Department of Agriculture, or by a college or a university for academic or agricultural research purposes in a state that maintains its own hemp regulation. Some states have taken advantage of the federal legislation and for more information on that, check out the following:

So, how can a U.S. company create hemp products without growing hemp itself or having any domestic hemp resources? It can import hemp under the importation laws and rules promulgated by the United States Department of Agriculture and by United States Customs and Border Protection. According to a recent Congressional Report on hemp, China supplies the most raw and processed hemp to the United States, followed by Romania, Hungary, and India. Canada is the single largest source of hemp seed and oilcake imports.

Though importing hemp is legal, it still presents significant risks because U.S. Customs and Border Protection is always looking out for anything containing THC, even trace amounts, and for anything with any type of cannabis logo or packaging. In fact, in response to the question, “[c]an I import hemp products into the United States?,” U.S. Customs responded as follows:

Hemp products such as cosmetics, clothing, food, etc. may be imported into the United States if they do not contain tetrahydrocannabinols (THC). Hemp Seeds: Imports of hemp seeds must be sterilized. Non-sterilized hemp seeds remain a schedule one controlled substance and therefore may only be imported into the U.S. with a Drug Enforcement Agency (DEA) Permit Form 35. All Other Hemp Products: If the product contains tetrahydrocannabinols (THC) and causes THC to enter the human body, it is an illegal substance and may not be imported into the U.S

U.S. Importers have to heavily rely on their exporters to ensure the hemp materials or seeds being imported to the U.S. contain no THC at all and that any seeds are not capable of germination. Ultimately, if the exporter makes a mistake with its hemp imports, the U.S. importer pays the price, both civilly and criminally.

In my next hemp post, I’ll talk about how businesses legally process hemp across the country.

  • Thank you for writing about hemp. Unfortunately, I disagree with some of your assertions. As much as I wish they were correct, the following statements in your blog aren’t accurate:

    a. “Despite the substantial differences between hemp and marijuana, the legal status of the two are intertwined.” In reality, there are no substantial differences between hemp and marijuana, only artificial legal limits based on the amount of THC in a given strain. Generally speaking, a cannabis sativa plant that is CBD dominant, as opposed to THC dominant, is a hemp plant. From a scientific perspective, this is probably the most accurate distinction. However, legal definitions, which matter in practical usage, tend to focus on pinning down the THC to a percentage point. In the 2014 US Farm bill Congress defines hemp as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a [THC] concentration of not more than 0.3 percent on a dry weight basis.” Most states that have enacted hemp laws mimic the Federal definition.

    Now to the crucial point: this 0.3% THC ceiling, which is the current world-standard, is based on the work of Canadian scientist Ernst Small, who conducted research on cannabis and published “The Species Problem with Cannabis” in 1971. In his book, Small stated that there isn’t a natural point at which the cannabinoid content could be used to distinguish strains of hemp and cannabis. Despite this he drew an arbitrary line on the continuum of cannabis types, and simply decided that 0.3 percent THC was the proper line. The line has held.

    b. “Under the federal Controlled Substances Act, marijuana does not include hemp.” This is, at best, an overly broad interpretation of Hemp Indus. Ass’n v. DEA, 333 F.3d 1082 (9th Cir. 2003). At its core, Hemp Ind. is a case about regulatory procedure, not hemp. It did not define hemp or even carve out what hemp-related activities were legal. Rather, it simply struck down a DEA rule based on the DEA’s failure properly to enact the rule. Although not having quite the precedential weight of Hemp Indus., the District Court’s analysis of the issue in Monson v. DEA, 522 F. Supp. 2d 1188 (DND 2007) goes much deeper. In Monsoon the court clearly articulated Federal law regarding hemp:

    “The plaintiffs concede that the plant they intend to grow [ie, in this case hemp] is Cannabis sativa L. The plaintiffs also concede that the plant they seek to grow will contain some quantity of THC. See Complaint, P 14. Whether viewed as marijuana, 21 U.S.C. § 812 (c)(Schedule I)(c)(10), or as THC-containing material, 21 U.S.C. § 812 (c)(Schedule I)(c)(17), the plant the plaintiffs seek to grow is clearly a Schedule I controlled substance under the plain language of the [1199] Controlled Substances Act. The language of the statue is unambiguous.”

    Fortunately, states are beginning to come online in allowing hemp production under the 2014 US Farm Act. This is particularly true in the traditionally rural South, which as a whole remains resistant to cannabis reform. However, to state that hemp and cannabis are “substantially different” and to assert in a blanket statement that hemp is legal under Federal law is irresponsible. Admittedly, the law is grey (“aggressively grey” as I’ve heard some people say), and that some distinctions are subtle. However, subtle distinctions are critical to acknowledge when a misstep could result in a Federal Criminal charge or, slightly less discouragingly, forfeiture of your assets.

    • Robert Hook

      @rodkight:disqus You may have the law down but there is a huge difference between cannabis grown for hemp and cannabis grown for marijuana. Technically speaking they are the same plant but like most plants come in various strains. Also you have to consider how it’s grown and cultivated. To me you’re rant is missing the most important part.

      Namely to grow high levels of THC to smoke or use as marijuana you need to have non-fertilized female plants isolate from pollen. The bud of the plant is what you smoke and if it gets pollinated then there goes your THC. Hemp plants from the beginning are planted in fields in rows to be harvested as Hemp. The stalks are long and tall like bamboo. They grow from 1 to 3 meters tall. That is the whole purpose of Hemp. The outer parts of the stalks have strong fibers and the inside a biomass material. When it is separated the inner biomass part is called Hemp Shiv. Hemp also produces buds but with seeds. Some strains are know for producing huge amounts of seeds. So there are three harvestable parts to a Hemp plant.

      Plant strains while technically Cannabis Sativa have very low amounts of THC because THC is part of the flowering process of the female plant. Why don’t you guys get that part. The differences couldn’t be more obvious.