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Excerpt from HEMP AS A CROP FOR MISSOURI FARMERS:
Markets, Economics, Cultivation, Law
by Richard Lawrence Miller 1991
LAW UNITED STATES--EVOLUTION OF PRESENT LAW
From a biological production
agriculture standpoint, hemp and marijuana come from the same
plant, Cannabis sativa L. But, as will be detailed below, the
law distinguishes between hemp and marijuana, in order to permit
hemp commerce while forbidding marijuana commerce. For many years
the federal government maintained a registration system that
promoted hemp commerce even though marijuana was illegal. After
hemp farming disappeared in the 1959, the federal government
dismantled its system and allowed each individual state to establish
its own system if desired. Missouri can establish a system to
encourage hemp commerce while suppressing marijuana, a system
modeled on the successful federal one.
Recognizing hemp growing as a legitimate agricultural pursuit,
Congress exempted mature stalks from the original version of
the first federal law to regulate cannabis (H. R. 6385). The
original bill, however, defined seeds and oil as marijuana. The
seed and oil seed industries immediately objected. National Institute
of Oilseed Products spokesman Ralph F. Lozier (a former judge
and U.S. congressman from Carrollton, Missouri) protested, "No
crusher, up to this good day, ever knew or even dreamed or suspicioned
that in crushed hemp seed, he was dealing with a narcotic or
habit forming commodity, nor is that now evident.''259 He told
a House committee, "Never until the last 3 weeks was any
suggestion made that they were handling a commodity that was
carrying a deleterious principle that was contributing to the
delinquency of the people of the United States.''260
Lobbying by the seed and seed oil industries exempted those
parts and products of the cannabis plant from the legal definition
of marijuana. H.R. 6385 was replaced by H.R. 6906 which excluded
"oil or cake made from the seeds..., oil, or cake, or the
sterilized seed of such plant which is incapable of germination."
Moreover, commerce in viable seed was legal if persons involved
paid a $24 annual registration fee and used the seed for "manufacture
of birdseed or for the manufacture of seed oil, seed cake, or
any compound, manufacture, salt, derivative, mixture, or preparation
of such oil or cake.''261 No government order forms were required
for such seed sales.262
Clinton M. Hester, assistant general counsel of the Treasury
Department, who played a large role in drafting and passing the
bill, assured Congress that
- production and sale of hemp and its products for industrial
purposes will not be adversely affected by this bill.... The
hemp producer will pay a small occupational tax [$ 5 a year]
but his fiber products will be entirely exempt from the provisions
of this. Similarly, the manufacturers of oil and the byproducts
of seed, such as hemp seed cake and meal, will pay an occupational
tax, but their purchases of seed and sales of such oil, cake,
and meal will be entirely exempt from the provisions of the .bill
except that purchases of such seed will be subject to regulations
designed to prevent diversion [for planting illicit marihuana].
Manufacturers of birdseed will also pay an occupational tax,
but under the definition of marihuana, the bill will not apply
to their sales of birdseed, if the hemp seed contained therein
is sterilized so as to be incapable of germination.263
Hester urged Congress to regulate trade in cannabis, not outlaw
it entirely. Otherwise you would put all of these legitimate
industries out of business.... We have tried throughout this
measure not to interfere materially with the production but to
permit it.264 Federal Bureau of Narcotics Commissioner Harry
J. AnsLinger confirmed that the proposed legislation bore no
threat to hemp growers: "They are not only amply protected
under this act, but they can go ahead and raise hemp just as
they have always done it.''265 He pledged that a farmer need
not worry about government agents snooping around farm property.
The Bureau was "not going to supervise his crop. It would
not be possible.... We would certainly know the sheep from the
goats without any close general supervision."266
Anslinger emphasized that the nominal tax to be paid by hemp
growers would simply be a means for the government to know who
was raising hemp: "It is just an information return. That
is all we would be interested in.''267 Hester agreed: The farmer
here will not even have to go to the Collector's office. All
he will have to do will be merely to mail in his $5...When he
wants to sell his crop of seeds all he will have to do ...will
be to obtain some evidence from the person to whom he sells it,
that that person is entitled to the exemption. That is the situation
with respect to the seed. Of course the fiber products are entirely
out of the bill.268
Although substantial criminal penalties would apply to anyone
who raised commercial hemp without registering with the Treasury
Department, the registration .was not technically a license.
A license can be refused by an issuing agency. Registration by
the Treasury Department was automatic for anyone who sent in
the fee. Anslinger noted that even known illicit drug dealers
would be registered, although their cannabis crops would be closely
watched.269 The point here is that federal registration was automatic
upon receipt of the fee; no criteria existed by which anyone
could be denied registration.
Congress passed the 1937 Marihuana Tax Act with the understanding
that it would not interfere with the hemp industry.270 Production
statistics given earlier in this report demonstrate no damage
to the industry after the law went into effect.
Marijuana was just as illegal in the 1940s as in the 1990s,
yet large industrial hemp crops were grown. During the 1940s
farmers participating in the government-sponsored hemp program
had to buy seed from a government agent, specify what part of
their land would be used for hemp, and deliver all stalks to
an approved breaking mill. Farmers had to register under the
1937 federal Marihuana Tax Act, obtain any necessary state license,
and pledge to obey marijuana laws.271 War Hemp Industries, a
private corporation owned in trust by the U.S. Agriculture Department's
Commodity Credit Corporation, supervised hemp crops on behalf
of the Federal Narcotics Bureau.272 Agriculture agents, rather
than drug control agents, were responsible for marijuana law
enforcement. War Hemp Industries agreed to cooperate with federal
and local law enforcement authorities273 and to absorb any penalty
applied to Commodity Credit for a marijuana violation.274 War
Hemp thus had financial incentive for strict enforcement of marijuana
laws.
The Commodity Cooperative Association of Lexington, Kentucky,
operated as the federal government agent in seed transactions,
purchasing seed from cleaning mills and selling it to farmers
for sowing. The Association had to keep strict records of all
transactions in seed to assure that none was diverted for illicit
planting of marijuana.275 Before being able to sell to a cleaning
mill (which in turn sold to the Association) seed producers had
to present their federal tax stamp or registration, demonstrating
their compliance with federal marijuana law. Cleaning mills,
in turn, had to post substantial bonds to guarantee compliance
with contractual regulations supporting marijuana laws.276
Every step of hemp growing involved guarantees that no portion
of crops would be, diverted for illicit marijuana use.
Toward the end of the war, the Federal Bureau of Narcotics
decided to regard mature hemp stalks as marijuana if a single
leaf remained on them, a stand later modified to permit 10% of
the leaves.277 It was unclear who would count and record the
original number of leaves on each stalk in order to calculate
the percentage. Because marijuana taxes ranged from $1 to $100
an ounce, and stalk harvests were measured in tons, the effect
would have been to extinguish the American hemp industry. Narcotics
Bureau chief Harry Anslinger told the industry that the tax would
include the entire stalk and come to about $32,000 a ton.278
Bureau Assistant Chief Counsel B.T. Mitchell stated that Anslinger
personally decided to classify mature stalks as marijuana. "He
handled that himself," agreed Deputy Commissioner Will S.
Wood. Neither Mitchell nor Wood offered an explanation for Anslinger's
action, nor apparently did Anslinger ever reveal one.279
The reason cannot have been diversion of industrial hemp crop
leaves or flowers from the growing field into the illicit marijuana
market. In 1937, when Anslinger urged federal regulation of cannabis
commerce, he told the U.S. Senate that only one instance had
ever been noted of such diversion, from a hemp crop in Texas.
And that instance was theft from a field by two persons; the
farmer had no involvement. Anslinger declared that hemp growers
and processors "have not been involved in the illicit traffic
at all. This case in Texas is the only case I know of."280
In 1945, a private Wisconsin mill operator declared, "In
the 30 years we have operated and grown large acreages we have
never heard of one instance where there was an illicit use made
of the leaves of this hemp plant.... We have never heard of anybody
trying to get into a field and take the leaves for illicit purposes."281
An Illinois hemp plant manager (who was a former school board
member in his community) concurred, saying he was "on the
alert and made considerable effort to determine if this hemp
plant was being harvested by anyone for narcotic uses . . . [but]
never observed anyone in the act of gathering the plant for this
purpose."282
Nor can the reason have been diversion of residual leaves
or flowers after harvest. Upon inquiry in 1991, a senior French
hemp industry official dismissed the possibility of marijuana
thieves attacking between time of harvest and delivery of stalks
to mills: "There is never a theft between the harvest and
utilization by industry for at this stage the foliage (leaves
and flowers) have practically disappeared as dust.''283 As to
conditions at mills themselves, in 1945 a senior U.S. Department
of Agriculture official stated, "We have never had any difficulty
at our own [government] mills. We have had no reports of anyone
attempting to secure leaves or blossoms nor have I heard of such
attempts being made at the privately-owned mills."284 The
definition of "manure stalks" was discussed when Congress
passed the 1937 Marihuana Tax Act, as hemp industrialists wanted
to be sure fiber harvest was permitted before the plant reached
biological maturity-and that regular cultivation, harvest, and
milling practices would be unaffected by the law.285 The Treasury
Department also accepted amendments to the bill that exempted
oil, oil meal, oil cake, and seed cake products that happened
to contain small residual quantities of "a few twigs, leaves,
or portions of the flowering tops.''286
The definition of "mature stalks," the acceptance
of small amounts of marijuana in hemp delivered to mills, and
the absence of any illicit diversion of hemp crops were all well
established in 1945 when the Bureau of Narcotics issued its ruling
about residual leaves on stalks. Having failed to discover any
reason for the ruling, Congress amended the anti-marijuana law
to nullify the Bureau's action.
First, Congress exempted from the marijuana tax "any
transfer of marihuana from one miller to another miller, or from
a farmer to a miller.''287 Millers, like hemp growers, now had
to register with the Treasury Department but Congress specified
criteria for miller registration: The Secretary [of the Treasury]
shall not permit the registration of any person...unless in the
opinion of the Secretary such person (or if a corporation, each
officer thereof) is a person of good moral character and unless
in the opinion of the Secretary such person is a person of suitable
financial standing, intends to engage in good faith in the business
of manufacturing or producing fiber or fiber products from the
plant Cannabis sativa L. on a commercial basis, and is not seeking
registration under this section for the purpose of facilitating
the unlawful diversion of marihuana. Any person who is registered
under this section. shall afford agents of the Bureau of Narcotics
ready access at all times to any part of the premises of the
mill or other premises of such person and the right to inspect
any and all books, papers, records, or documents connected with
the activities of such person in dealing in, manufacturing, and
processing Cannabis sativa L. and fiber or fiber products thereof,
and the handling of marihuana. The Secretary may cancel or may
refuse to renew...the registration of any such person.288
Administrative regulations supplemented the law. For example:
Investigation shall include a comprehensive inquiry to determine
whether the applicant is equipped with technical facilities and
technical skill adequate to establish and maintain the proposed
milling operation with a reasonable degree of efficiency; whether
the applicant has a market for the prospective fiber products;
and whether there are or will be appropriate safeguards against
diversion of marihuana while en route to, or at, the mill premises.289
Upon learning of plans to exempt hemp stalks from the marijuana
transfer tax even if they had residual leaves or flowers, the
Federal Bureau of Narcotics declared that upon passage of such
legislation the Bureau would require mills to erect high fences
and to hire guards to patrol the premises.290 Apparently no such
requirement resulted, however.
In May 1945 the Bureau's Deputy Commissioner Will S. Wood
told Congress that the Bureau did not wish to destroy the hemp
industry.291
In the 1940s, as in the 1930s, when hemp industrialists protested
anti-marijuana measures that would harm the hemp industry, Congress
took decisive action to guarantee continuance of the industry.
Clearly Congress intended to encourage hemp growing, not discourage
it. Hemp producing states took a similar attitude. Growing marijuana
was illegal in Iowa in 1946, but the anti-marijuana law said
"Any person, firm, or corporation engaged in growing cannabis
for the purpose of obtaining therefrom seed or fiber or engaged
in the processing of hemp for either of such purposes under contract
and holding a federal license therefor shall be .exempt from
the provisions of this section.''292 In the 1960s Congress provided
further protection to hemp growers by ratifying the Single Convention
on Narcotic Drugs, which took force in the United States in 1967.
The treaty explicitly protects "cultivation of the cannabis
plant exclusively for industrial purposes (fibre and seed) or
horticultural purposes.''293 Under long standing judicial doctrine,
treaties supersede any conflicting federal or state legislation.
By ratifying this treaty Congress protected the hemp industry
against any subsequent national or state prohibition attempt.
Although hemp farming declined dramatically in the late 1940s,
a half dozen private hemp companies remained active. In 1952
the U.S. Department of Agriculture published a pamphlet advising
farmers how to grow hemp, and in 1953 124 growers were still
registered. By 1958, however, commercial hemp farming no longer
existed in the United States. When federal anti-marijuana laws
underwent a major revision in 1970, Congress deleted mechanisms
for registering growers and processors.294 Commercial hemp production
and processing remained legal, but federal registration mechanisms
under which the industry had operated since 1937 were abandoned,
apparently as irrelevant to the production agriculture scene
of 1970. When the federal government abandoned regulation of
commercial hemp, regulatory authority passed to the states. Each
state has authority to establish a mechanism by which producers
and processors of hemp can register as legitimate business enterprises,
with such state certification allowing them to operate even though
marijuana remains illegal--just as was done under the federal
system.
UNITED STATES--LAW IN 1991 The current federal definition
of marijuana still keeps the hemp industry legal: The term "marihuana"
means all parts of the plant Cannabis sativa L., whether growing
or not; the seeds thereof; the resin extracted from any part
of such plant; and every compound, manufacture, salt, derivative.
Such term does not include the mature stalks of such plant, fiber
produced from such stalks, oil or cake made from the seeds of
such plant, any other compound, manufacture, salt, derivative,
mixture, or preparation of such mature stalks (except the resin
extracted therefrom), fiber, oil, or cake, or the sterilized
seed of such plant which is incapable of germination.296 Missouri
statute language is almost the same: "Marihuana", all
parts of the plant genus Cannabis in any species or form thereof,
including, but not limited to Cannabis sativa L., Cannabis indica,
Cannabis americana, Cannabis ruderalis, and Cannabis gigantes,
whether growing or not, the seeds thereof, the resin extracted
from any part of the plant; and every compound, manufacture,
salt, derivative, mixture, or preparation of the plant, its seeds
or resin. It does not include the mature stalks of the plant,
fiber produced from the, oil or cake made from the seeds of the
plant, any other compound, manufacture, salt, derivative, mixture
or preparation of the stalks (except the resin extracted therefrom),
fiber, oil or cake, or the sterilized seed of the plant which
is incapable of germination.''297
Hemp growing in Missouri is as legal as it has always been.
The grower, however, must be able to prove that the crop is not
being used illicitly for marijuana. Although technically a state
certificate is not necessary for such proof, state registration
would officially identify a grower or processor as pursuing legal
hemp commerce. Without a registration system, anyone interested
in growing or processing hemp will likely fear prosecution for
cultivating or transacting in marijuana. A state registration
system would benefit hemp farmers and simplify marijuana law
enforcement. Any grower without a state certificate would be
hard pressed to claim that the crop is legitimate.
Because hemp commerce is legal and is exempt from drug control
laws, interstate commerce in hemp is legal. Missouri farmers
and processors would have a right to engage in interstate and
international commerce.
Note: The federal government has not relinquished its regulatory
authority over drugs. State registration as a hemp grower or
processor would not give the registrant permission to grow or
process cannabis for medicinal purposes.
Also: Holders of a state registration certificate would be
allowed to produce hemp, not marijuana. Holders would not be
exempt from obeying anti-marijuana laws. Holders could not lawfully
permit someone to strip leaves from fields or otherwise divert
any part of the crop for illicit purposes. Such conduct would
be liable to harsh criminal penalties, and we may be confident
that law enforcement authorities would take keen interest in
observing the fate of hemp crops.
A certificate would merely shift the legal "burden of
proof." Currently, without a registration system, a Missouri
hemp cultivator would be presumed to be cultivating marijuana.
Upon such accusation, the hemp farmer would have to prove otherwise.
If a cultivator is a registered hemp producer, however, the legal
assumption is that the crop is lawful hemp, and the prosecutor
has to prove otherwise. Without a registration system, criminal
charges against a hemp cultivator would be automatic (although
the farmer might eventually prevail in court). With a registration
system, criminal charges would never be filed unless a prosecutor
believed the farmer was diverting part of the crop for use as
marijuana--and authorities never detected even one such incident
while the federal registration system was operating. Under state
registration hemp farmers could go about their business unmolested,
just as corn or hog farmers do. Although a registration system
would not change anti-marijuana laws, the shift in legal burden
of proof would make hemp production a viable agricultural proposition.
There is nothing contradictory about encouraging hemp while
discouraging marijuana. Although they come from the cannabis
plant, they are different products. While the federal registration
system operated, agriculture agencies encouraged cannabis growth
while law enforcement agencies destroyed unregistered cannabis
acreage. This policy is documented by government records:298
Year Registered Growers Legal Cannabis Harvested Illegal Cannabis
Destroyed
19 8 371 1,400 acres 12,900 acres 19 9 174 1,650 6,500 19
0 219 2,600 19,300 19 1 566 9,600 23,300 19 2 8,929 43,800 6,600
19 3 14,913 186,700 150 19 4 -- 54,600 110
Experience suggests that the following elements would help
a state hemp registration system to succeed. 1. Evidence that
grower has identified a buyer for crop, or that processor will
receive raw materials from identified growers. 2. Evidence that
applicants have sufficient financial backing for their enterprise.
3. Posting bond to guarantee compliance with anti-marijuana laws.
A percentage of such bond might be returned annually if good
conduct continues. 4. Strict record keeping by which farmers
identify exact areas used for raising crops and report disposition
of crops, and records by which processors account for all raw
materials received. 5. Periodic renewal of registration, and
means for revoking registration. 6. Regulating agency should
be one that encourages cannabis hemp commerce (such as Agriculture,
Conservation, Natural Resources) rather than one oriented toward
restricting cannabis marijuana commerce (such as Public Safety,
Mental Health).
Examination of old federal statutes and regulations, noted
above, could benefit discussion of a Missouri hemp commerce registration
system. The systems of Minnesota, France, and Canada may also
be of interest.
MINNESOTA
Minnesota has a system for hemp commerce. For many years registered
persons could harvest wild hemp as well as cultivated crops,299
but in 1969 the law was changed to allow only commerce in cultivated
crops.300 As of 1981 Minnesota law read as follows:
- 18.321 Growing hemp (Cannabis sativa L.) for commercial purposes;
licenses Growing or maintenance of hemp, Cannabis sativa L.,
is permitted only for commercial uses, as herein defined. Commercial
uses are such adaptations of hemp as are necessary and proper
for the manufacture of rope, sacks, and other sisal hemp products
and such other non-injurious commercial products, including the
manufacture of harts, yarn, thread, cordage, merchandise, cloth,
and such other products as may be made from linen fiber, as have
been or may be developed; submitted to the commissioner and approved
by him. The commissioner is hereby authorized, and it shall be
his duty, to license and authorize the growing of hemp when the
derivatives thereof are to be used solely for the commercial
uses herein defined. Any person desiring to grow hemp for commercial
purposes, as herein defined, shall file an application for a
license therefor with the commissioner, giving a description
and the area of land intended to be so used. The commissioner
shall issue a license to the applicant for the growing of such
hemp for such commercial uses as are specified in the application,
and license, and the growing of hemp, pursuant to the terms of
the license issued by the commissioner shall be lawful to the
extent granted by the license. 18.322 Licensee to notify commissioner
Any person to whom a license for commercial growing of hemp,
Cannabis sativa L., is issued shall notify the commissioner of
the sale or distribution thereof, and the names of the persons
to whom such hemp is sold or distributed. 18.323 Penalty Any
person violating any of the provisions of sections 18.321 to
18.322 is guilty of a misdemeanor.
Those statutes remained essentially unchanged into 1991, except
for modifications designed to remove gender prejudice in Minnesota
statutes. Apparently Minnesota had no registered commercial hemp
growers in 1991.
FRANCE
Although marijuana is prohibited, hemp is protected as a textile
plant throughout the European Economic Community.301 In France
a farmer who wishes to raise hemp must first obtain a contract
for the crop. A person cannot simply grow hemp on speculation.
Crop yield is estimated and a price for the crop is set before
field production begins. The producer must notify the Ministry
of Health and Ministry of Agriculture. Only seed certified for
producing cannabis with low drug content can be used. Crops are
tested during the growing season to be sure drug content remains
low. In 1991 a senior hemp industry official described anti-marijuana
regulations as "very strict."302
259 Citations available in original document.
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