Tennessee Bill Would Expand Hemp Market, Set Stage to Further Block Federal Prohibition

NASHVILLE, Tenn. (April 14, 2016) – A bill that would expand the hemp industry in Tennessee passed the House last week. The measure would open the door to in-state processing of hemp products, paving the way for faster development of the state’s hemp market, and further thwarting federal prohibition in effect.

Rep. Jeremy Faison (R-Cosby) introduced House Bill 2032 (HB2032) in January. The legislation would expand the existing hemp regulations in Tennessee to allow licensing of hemp processors.

The House passed an amended version HB2032 86-2 on April 7.

The amended version of the bill changes the definition of hemp to exempt institutions of higher education in the state from requirements to grow plants using non-certified seed.

“Industrial hemp” means the plants and plant parts of the genera cannabis that do not contain a delta-9 tetrahydrocannabinol (THC) concentration more than three tenths of one percent (0.3%) on a dry mass basis and that are either grown from seed certified by a certifying agency, as defined in § 43-10-103, OR grown by an institution of higher education in this state that offers a baccalaureate or post-graduate level program of study in agricultural sciences.”

This would bring about a very important change because a shortage of usable certified seed throws up one of the biggest barriers to hemp research and farming. No domestic seed sources exist, and federal government strictly regulates importation and transportation of hemp seeds. Allowing universities to do research with non-certified seed would open the door to creating a domestic source for certified seeds in the future, an extremely important step in developing a viable hemp industry in the U.S..

Provisions allowing the state to license hemp processors would likely serve to expand the market for raw hemp in the state. Creating a state-level legal structure for hemp processors would make it more likely for businesses to begin processing hemp into various marketable products.

The Tennessee legislature initially legalized industrial hemp production in 2014. The new law established a quick, orderly, efficient, farmer-friendly process to license industrial hemp growers, and permit them to distribute the crop in the marketplace. A WATE report illustrates the success of Tennessee’s policy.

Thousands of hemp plants on Rasmussen’s farm will be harvested this October, mainly by hand. That means they’ll take each plant, dry it out and sell it as seed…

Rasmussen’s 2.5 acre industrial hemp farm is a pilot project and one of 50 in our state.

Workers with the Tennessee Department of Agriculture stopped by Wednesday for a yearly review. They took samples to make sure hemp plants are within Tennessee’s legal 0.3 percent limit of THC.

Passage of HB2032 would will likely spur similar on the processing side of the business and ultimately grow the hemp industry as a whole.

The federal government still prohibits the cultivation of industrial hemp in most cases, and it prohibits the commercial cultivation of hemp in all cases. Despite federal prohibition, Tennessee’s current law sets the foundation for people to block the ban by encouraging hemp production in the state. By facilitating further development of the hemp industry with this new law, Tennessee will ultimately expand this “illegal” market.

The evolution of the hemp program in Tennessee also demonstrates a practical reality. Public policy analyst Michael Boldin pointed out when states pass bills that remove a layer of law, markets will inevitably begin to develop.

“As those markets take root, legislators start feeling the pressure to relax laws further,” he said. “Some critics complain that state licensing programs ‘restrict freedom.’ Still, state-restricted hemp farming is better than no hemp farming at all. That’s at least a little more freedom. And as we’re seeing in Tennessee, it ultimately opens the door to even freer markets down the road. A little freedom begets more freedom.”

FEDERAL FARM BILL

Early in 2014, President Barack Obama signed a new farm bill into law, which included a provision allowing a handful of states to begin limited research programs growing hemp. The “hemp amendment”

"…allows State Agriculture Departments, colleges and universities to grow hemp, defined as the non-drug oil-seed and fiber varieties of Cannabis, for academic or agricultural research purposes, but it applies only to states where industrial hemp farming is already legal under state law."

In short, current federal law authorizes the farming of hemp – by research institutions only, for research only. Farming for commercial purposes by individuals and businesses remains prohibited. Oregon law ignores federal prohibition and authorizes commercial farming and production anyway.

OTHER STATES

Tennessee joins with a number of other states – including Oregon, Colorado, South Carolina, Connecticut, Maine, North Dakota and Vermont – simply ignoring federal prohibition and legalizing industrial hemp production within their state borders.

While prospective hemp growers still have to take federal law into consideration, by eliminating the state requirement for federal permission, state hemp legalization clears away a major obstacle to widespread commercial hemp farming within the borders of the state.

Farmers in SE Colorado started harvesting the plant in 2013, and farmers in Vermont began harvesting in 2014, effectively thwarting federal restrictions on such agricultural activities. On Feb. 2 of last year, the Oregon hemp industry officially opened for business and one week later, the first license went to a small non-profit group. As more people engage in hemp production and the market grows within these states, more people will become emboldened creating an exponential wave, ultimately stopping the federal ban in effect.

HUGE MARKET FOR HEMP

According to a 2005 Congressional Research Service report, the U.S. is the only developed nation that hasn’t developed an industrial hemp crop for economic purposes.

Experts suggest that the U.S. market for hemp is around $600 million per year. They count as many as 25,000 uses for industrial hemp, including food, cosmetics, plastics and bio-fuel. The U.S. is currently the world’s #1 importer of hemp fiber for various products, with China and Canada acting as the top two exporters in the world.

During World War II, the United States military relied heavily on hemp products, which resulted in the famous campaign and government-produced film, “Hemp for Victory!”.

HB2032 represents a second step toward hemp freedom in Tennessee.