Lexington, KY - Between the ages of eight and fifteen, I went to summer camp on a Jessamine County farm where industrial hemp had been grown in an earlier generation. In the underbrush, the occasional reminder could be found of the entrepreneurial spirit of an earlier, bygone generation of Kentucky farmers. Like many Kentuckians, I thought little about the potential role of hemp as a means of economic development until lately, with the possible exception of Woody Harrelson’s well-publicized act of planting hemp seeds on a Lee County farm in 1996 (for which he was arrested). Hemp’s return to Kentucky agriculture, however, was at the forefront on the state and national stage during the recently-ended session of the Kentucky General Assembly.
Hemp was first cultivated in Kentucky around 1775, and Kentucky was a substantial producer of industrial hemp through the middle part of the twentieth century, with the industry dying off in the aftermath of World War II. According to University of Kentucky historian, James F. Hopkins, in his well-regarded 1951 book on the subject, Kentucky hemp was important not only for the “rope walks” that produced lines for ships and similar uses, but also for the cords that bound bales of cotton headed for market. In fact, at the turn of the twentieth century, Kentucky produced about ninety percent of the nation’s hemp supply.
Why did the industry die off? Was it solely attributable to changes in industrial technology in the post-war world? And why is Kentucky’s present Commissioner of Agriculture, James Comer, such a strong proponent of the revival of industrial hemp production in Kentucky?
To the extent the nation’s (and the Commonwealth’s) agricultural economy is cyclical, at least part of the answer is that burley tobacco replaced hemp production for Kentucky farmers, and that hemp might now help stem the declining fortunes of Kentucky tobacco farmers. It could also provide industrial jobs in processing and manufacturing. Shelbyville Senator, Paul Hornback, a Republican proponent of industrial hemp, said that during the recent legislative session he heard from two companies seeking to capitalize on a hemp comeback in Kentucky. Currently, worldwide production of hemp results in revenues of $400 million annually, and although the United States produces none of that hemp, it is the world’s largest consumer of hemp products.
It is well known that a principal “problem” with hemp is its genetic relationship to marijuana. While the two plants are both members of the Cannabis family, the hemp plant quite simply has little or no content of tetrahydrocannabinol (THC), the ingredient which provides a “high” from marijuana use. What hemp does have, making it attractive as an agricultural product, is the ability to be processed into paper, carpeting, auto parts, and clothing. Its seeds can be used for industrial oils, food, even medicine. Despite this, and because in large measure of the genetic similarity between the two plants (and the potential for containing THC), hemp, like its more potent sibling, is a Schedule I substance under the federal Controlled Substances Act of 1970 and cannot be legally grown or sold in the United States under federal law.
Even in the face of these prohibitions, several states around the country have recently recognized the economic potential of hemp cultivation, including California, Hawaii, Maine, Maryland, Montana, North Dakota, Vermont and West Virginia. These states have either passed legislation legalizing (at the state level) the in-state cultivation of hemp, or gone so far as to pass statutes licensing hemp cultivation (presumably to allow for an administratively-workable process akin to the contemplated licensing of legal marijuana cultivation in Colorado and certain other western states).
It was in this context, with certain sister states already on the playing field, that the Kentucky General Assembly took up the issue of legalizing once more the agricultural production of hemp in Kentucky. This legislative action was set in the context of Kentucky Revised Statutes 218A.010(20), which defines the term “marijuana” broadly enough to include hemp, and 218A.050(3), which, like federal law, makes THC a Schedule I substance.
During the 2013 regular session, hemp was a hotly contested issue. The session saw the emergence of pro-hemp legislation in both the House and Senate, with the major difference being that the proposal in the House (HB 33) allowed regulation of hemp cultivation by law enforcement, while the original bill in the Senate (SB 50) placed regulatory authority with the state Department of Agriculture. HB 33 was short-lived. Introduced on January 8, 2013, it was referred to the Agriculture and Small Business Committee and made no further progress.
SB 50 had more life in it. Introduced on January 11, 2013, and referred to the Senate Agriculture Committee, it was unanimously adopted in committee and passed the full Senate by a substantial majority vote of 31-6. Although the legislation had bipartisan support at the outset, the measure became increasingly divisive along party lines as the session progressed. While the bill was mired in the House Rules Committee, Prestonsburg Democrat and House Speaker, Greg Stumbo publicly stated the House would not vote on the bill. Within a day, numerous amendments were proposed in an effort to keep the measure moving forward, and it was approved on a 88-4 vote on the final day of the legislative session. Then, in the final hour of session, the Senate approved the amended bill by a vote of 35-1.
SB 50 creates a framework to license hemp cultivation and transport in Kentucky, subject to the key caveat that the efforts to implement the framework must await a repeal of the federal ban on hemp cultivation. Only licensed farmers will be allowed to legally grow what the legislation defines as “industrial hemp,” and the Kentucky State Police will retain authority to monitor fields where industrial hemp is cultivated to ensure they are not used for marijuana cultivation. The Agricultural Experiment Station of the University of Kentucky is charged with the responsibility to oversee the cultivation of demonstration plots, to improve techniques and yields in the same manner as it has done for other crops for generations of Kentucky farmers. The entire process is subject to the oversight of the Industrial Hemp Commission, under the aegis of the Department of Agriculture (with the Commissioner of Agriculture to serve as vice-chair of the Commission and the Commission members to elect the chair).
Because the General Assembly has adjourned, under Section 88 of the Kentucky Constitution, Governor Beshear has ten days in which to veto the bill or it becomes law. His deadline comes on Saturday. While no specific public statement has been made regarding SB 50, the Governor has previously expressed his concern that legalization of hemp cultivation will ratchet up pressure on Kentucky law enforcement because of the need to distinguish between hemp and marijuana in the field. This position is set against the backdrop of strong support for the legislation by the General Assembly, and Kentucky’s Congressional delegation as well.
The remaining roadblock in Kentucky, and the eight sister states which have approved cultivation of industrial hemp, is the federal cultivation ban. On February 6, 2013, U.S. Representative Thomas Massie, from northern Kentucky’s Fourth District, introduced HR 525, entitled The Industrial Hemp Farming Act of 2013. A week later, Kentucky’s Senators, Mitch McConnell and Rand Paul, joined Oregon Senators, Jeff Merkley and Ron Wyden, in co-sponsoring S 359 (similarly titled to the House bill). The effect of these bills (each of which is currently before a Congressional committee) would be to amend the Controlled Substances Act to remove hemp from the statutory definition of marijuana, and also to include a statutory provision which allows legal cultivation of hemp plants with negligible amount of THC. Given the uncertain future of this federal legislation, it may prove necessary for members of Congress from the affected states to seek waivers of enforcement of these provisions of the federal statute, with the aim remaining to implement the state laws allowing for legal cultivation of industrial hemp.
The current history of hemp legislation demonstrates that there is bipartisan support for industrial hemp as an American agricultural product, including in Kentucky. The White House has not taken a position on the current federal proposals, but they do appear to dovetail in some measure with the previously-expressed support for a “new economy.”
Only time will tell if the federal roadblock to legal industrial hemp production will be removed, through the legislative or waiver process. Either way, it does appear that Kentucky is ready to move forward when that time comes.
David A. Cohen is an associate at McBrayer, McGinnis, Leslie & Kirkland, PLLC. His practice has a combined principal focus on commercial and insurance litigation with work in equine law (transactional and litigation) and bankruptcy. He also has a focus in class actions and complex litigation on both the plaintiff and defense sides, and was part of the firm’s team that successfully prosecuted the Curtis Congleton action against the Burley Tobacco Growers Cooperative Association, resulting in a substantial recovery to the plaintiff farmers. Mr. Cohen can be reached at dcohen@mmlk.com or at (859) 231-8780.