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Legislators look to capitalize on potential of industrial hemp market

February 6, 2014 · 3:36 PM
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By Christopher Lopaze, WNPA Olympia News Service

Washington state farmers could soon be growing cannabis for use in a potentially profitable hemp industry.

Hemp is an illegal substance under federal law, but two separate state Senate bills would permit development of a hemp industry in the state, and require Washington State University to conduct a year-long study to research optimal growing conditions and feasibility of hemp in the region.

“There’s a huge unfulfilled market, and Washington could be at the forefront,” said Sen. Bob Hasegawa, D-Seattle, sponsor of Senate Bill 5954.

Sen. Jeanne Kohl-Welles, D-Seattle, sponsor of Senate Bill 6214, said it doesn’t make sense to prohibit hemp production and force the United States to rely on exports of hemp products from countries, such as Canada, when Washington state farmers could be growing the crop.

Hemp is used to manufacture various products, including construction material, clothing, rope, food, bio-fuel and paper. More than 30 countries produce hemp, including China, Australia, Russia, England and France.

SB 5954 would let the state Department of Agriculture immediately start providing licenses to grow hemp, but SB 6214 would only allow licensing if the study determines a hemp industry would be profitable. Lawmakers now have to figure out how to reconcile the bills.

“If there’s the prospect of a crop that enhances the viability of agriculture in Washington state, of course we’re supportive of that,” said Mark Streuli, director of the Department of Agriculture, during testimony at the Senate Agriculture, Water and Rural Economic Development committee on Jan. 30.

Aimee Warner, a member of the Hemp Industry Association, said in testimony that it’s time to let farmers “re-energize” the state’s farming industry with hemp, but she had concerns with parts of the bills. HIA is a national organization representing the interests of the hemp industry.

She said a crop has never been outlawed in the history of the United States based on a study that determines a crop is unprofitable. She said that  requirement is unnecessary.

“I’m confident that Washington state will be a leader,” she said.

John Novak, a medical marijuana user and Cannabis Action Coalition member, a group lobbying for the preservation of medical-marijuana users rights, said at the hearing that legalizing industrial hemp would do more to end the federal prohibitions on cannabis than either medical or recreational cannabis laws.

Hemp and marijuana are classified as Schedule I controlled substances under the Controlled Substances Act. Both are derived from Cannabis sativa, but hemp has lower levels of tetrahydrocannabinol, the psychoactive chemical responsible for the effects of smoking marijuana. Hemp is typically defined as cannabis with a THC content below 1 percent, usually about one-third of a percent.

Federal legislation bodes well for states interested in growing hemp. One provision in the U.S. Agriculture Act of 2014 would grant permission for hemp research by universities or state agriculture agencies in states allowing the growth of hemp. The U.S. House passed the bill Jan. 29, and the U.S. Senate voted today to send it to President Obama, who is expected to sign it.

The Washington Farm Bureau, an advocacy group representing farmers’ interests at the local, state, and national level based in Washington state, has not yet taken a stance on hemp. Like with the state implementation of Initiative 502, which legalized marijuana for personal use, federal law makes establishing a safe way to handle financial transactions for hemp a conundrum, Hasegawa said.

The senator is sponsoring Senate Bill 5955, which would create the financial infrastructure necessary to provide financial services for farmers growing hemp or marijuana, since banks are barred from handling these funds under federal law. He said SB 5955 faces a “huge hurdle” to pass, but the only other alternative is a cash-based system, which is “totally irresponsible, because it puts the general public in harm’s way.”

The Department of Agriculture and WSU would need to raise an estimated $99,380 in private or public money to finance the study. The state Department of Agriculture would have to spend an estimated $850,000-$900,000 to cover program start-up costs, then between $750,000-$1.5 million per year for regulation costs, according to the fiscal note attached to the bills.

Kohl-Welles said it’s likely some form of a hemp industry bill will be passed out of the committee.

— Editor's note: News and information from the state capitol is provided to Sound  Publishing, parent company of the Journal, through its affiliation with Washington Newspaper Publishers Association. Reporter Rebecca Gourley is an intern with the WNPA Olympia News Bureau.


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