A 'budding' industry? State lawmakers look to regulate hemp

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For more than 20 years, North Dakota Rep. David Monson, R-Osnabrock, has tried to pass legislation to regulate the production of hemp in the state.

Though hemp has been recognized as a legal crop in North Dakota, Monson said, the state kept getting "stymied" by the U.S. Drug Enforcement Agency, which claimed hemp was marijuana and, therefore, illegal.

But the federal 2018 Farm Bill took hemp off the DEA's list of controlled substances, separating it from marijuana and placing it under the supervision of the Department of Agriculture.

With the passage of the farm bill, Monson is pushing to get a bill passed in the state Legislature that would recognize hemp and its derivatives as legitimate. His bill — House Bill 1349 — unanimously passed in the House late last month and has been sent to the Senate.

"I think we're going to have a good chance that we're going to have a lot more acres of hemp growing in North Dakota," Monson said.

The farm bill defines hemp as any part of the cannabis plant with no more than 0.3 percent tetrahydrocannabinol, or THC, the psychoactive compound found in marijuana.

HB 1349 aligns the state's definition of hemp to also contain less than 0.3 percent THC. The measure would establish a program to regulate the production of hemp in the state.

Before the 2018 Farm Bill, hemp in North Dakota could only be grown through the state's Industrial Hemp Research Pilot Program. The previous farm bill, which passed in 2014, allowed states to set up pilot programs to allow for the cultivation of hemp for research purposes.
Lonna BrooksLonna Brooks, owner of Terry's Health Products, talks last week about the cannabidiol (CBD) oil products she sells from her downtown Bismarck store. 

 

Agriculture Commissioner Doug Goehring said he and his office provided information to Monson for his bill, which Goehring believes will ease "the burden (of) costly regulations" for hemp growers in the state.

Under North Dakota's hemp pilot program, producers were charged $25 per acre from the state to monitor his or her crops. Under Monson's bill, the fee is to not exceed $350.

"We're going to probably go from one of the highest cost states, as far as monitoring, to one of the lowest," said Roger Gussiaas, president of Healthy Oil Seeds, of Carrington.

Gussiaas, who is one of five hemp processors in North Dakota, said he supports Monson's bill. He also applauded the passage of the 2018 Farm Bill, saying it helps recognize hemp as "more of a mainstream crop."

Hemp plants have a variety of uses, including fiber for paper and clothing, seeds and cannabidiol, or CBD.

CBD has been recognized as the most lucrative, and Goehring said he believes it could "now lead the way to developing a better market for hemp" in North Dakota.

Since 2014, the price of hemp has been lowered, thus dissuading the expansion of product in the state, Goehring said. But CBD could change that.

"(CBD) could actually stimulate more demand for product, which then would support a higher price at the end," he said.

Monson's bill would require hemp growers and processors to apply to Goehring for a license. They would also be subject to a background check, have to provide information about where they're going to grow the hemp and would be subject to random testing.

"And that's virtually it," Goehring said.

Monson said the licensing fee cost was determined by taking into consideration the cost of providing the license, doing testing and background tests and other related costs.

"This will make it a lot easier for people to raise (hemp), a lot cheaper and a lot more profitable," Monson said.

Hemp opportunities

Lonna Brooks, the owner of Terry's Health Products in Bismarck, started selling CBD products in early 2015.

CBD is a non-psychoactive substance derived from hemp plants and has been said to help with pain and anxiety. Brooks said she sold "a ton" of CBD products, including to elderly women dealing with arthritis pain.

In May 2017, the Bismarck Police Department went into Brooks' store and confiscated all of her CBD products due to the DEA classifying CBD as a Schedule I illegal drug.

However, now that the 2018 Farm Bill legalized hemp, including the products to make CBD oil, these products are back on her shelves.

Brooks said in December, after President Donald Trump signed the farm bill into law, she received an email from Bismarck police Sgt. Mike Bolme, stating that she could resume selling CBD products.

Bolme told the Tribune he consulted with Burleigh County State's Attorney Julie Lawyer, and they concluded they would not prosecute anyone for the possession or sale of CBD.

Brooks started selling CBD products, including tinctures, capsules and salves, and has since sold "thousands" of bottles.

After her CBD products were confiscated, Brooks said she started to work with people in the hemp industry to advocate for hemp's removal as a schedule drug. She said she and others in the industry were elated once the farm bill passed.

"It was great to see the industry being recognized," she said, adding that the bill creates more opportunities for farmers to grow hemp without the DEA "breathing down their necks."

Brooks also started a hemp seed company after her CBD products were confiscated, called Peace Garden Hemp.

"There will definitely be a budding industry here in North Dakota," she said.

Brooks also contacted her local legislators this session to discuss hemp bills in the state Legislature. One bill, House Bill 1113, has caused her some concern, because it defines CBD products as containing no more than 0.1 percent THC, while the farm bill sets the bar at 0.3 percent.

HB 1113 was introduced by the state Board of Pharmacy. Mark Hardy, the board's executive director, said the bill is meant to reflect changes to federal law.

Last year, the DEA reclassified drugs that contain CBD and no more than 0.1 percent THC from a Schedule I — drugs that include narcotics — to a less severe Schedule V drug. Specifically, the FDA announced that it had approved the CBD drug, Epidiolex, which is used to treat seizures.

Hardy said the language in the state Board of Pharmacy's bill recognizes that reclassification. But Brooks said she's still questioning whether the bill could stop the sale of CBD in retail stores.

"I think I'm skeptical because for 20 months I fought to have these products on my shelves so hard," she said.

Both the House and the Senate have passed HB 1113. Brooks said she'll now just wait and see what effect the bill will have, as she also awaits for the FDA to announce how it is going to regulate CBD.

"In the supplement industry, that's something we're used to," she said. "I think (the FDA) will clean up the industry, which is good for everyone ... as long as they don't ban it and require a prescription."

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