For Immediate Release
August 2, 2002
Contact Adam Eidinger / Mintwood
Media at (202) 986-6186
Hemp NAFTA Suit Begins Arbitration
Canadian Hemp Grower and U.S. to Select Arbitrators
for Chapter 11 Claim
WASHINGTON, DC —
Kenex Ltd., a Canadian firm exporting industrial hemp
products to the U.S. for the past five years, filed
Notice of Arbitration with the U.S. State Department
on August 2nd. Kenex and the U.S. will select a three-member
arbitration panel to determine if at least $20 million
compensation is due to Kenex for losses stemming from
the DEAs attempt to ban hemp seed foods.
"We met with the U.S. government
in March in the hope of avoiding a protracted trade
dispute, but the Bush administration failed to recognize
that Kenexs products are legal under current law,"
says Joe Sandler, a Kenex attorney. "Our client
has no choice but to seek compensation under NAFTA."
The U.S. is the only major industrialized
nation to prohibit the growing of industrial hemp. However,
the U.S. is the number one importer and consumer of
hemp products, including hemp foods. Hemp seed is an
exceptional source of protein, omega-3 and omega-6 essential
fatty acids, and independent studies and reviews conducted
by foreign governments have confirmed that the trace
tetrahydrocannabinol (THC) found in the hemp seed and
oil cannot cause psychoactivity or other health effects,
or result in a confirmed positive urine test for marijuana,
even when unrealistically high amounts of hemp seed
and oil are consumed daily (see http://www.TestPledge.com).
Popular hemp foods include waffles, bread, cereal, snack
foods, energy bars, ice cream and non-dairy milk.
Three years ago, on August 9, 1999, U.S.
Customs at the behest of the DEA impounded a Kenex hemp
birdseed shipment, issued recalls on other shipments,
and threatened Kenex with over $500,000 in fines. The
DEA attempted to justify the birdseed seizure by its
then secretive unwritten "Zero-THC Policy"
that deems hemp seed containing any traces of naturally-occurring
THC, no matter how insignificant, illegal. This policy
contradicts the 1970 Controlled Substances Act (CSA),
in which Congress specifically exempts sterilized hemp
seed and oil from control notwithstanding trace amounts
of THC, just as poppy seeds which contain trace amounts
of opiates are exempted by Congress from the CSA under
the definition of the "opium poppy."
The hemp exemption in the CSA was enacted
under the definition of "marihuana" in the
1937 Marihuana Tax Act originally, and coincidentally,
Aug. 2nd is the 65th anniversary of the Congressional
exemption for legitimate industrial hemp products such
as Kenexs. But according to the DEA, Kenexs
birdseed was a Schedule I controlled substance because
of miniscule insignificant trace amounts of naturally-occurring
THC. Customs eventually released the shipment and dropped
the case after finding that the DEA lacked authority
for its "Zero-THC Policy." By this time, however,
Kenex had lost most of its major customers as well as
a major investor, and was financially devastated.
In March 2000, the U.S. Department of
Justice confirmed that the DEA lacked authority to implement
a "Zero-THC Policy" because of the Congressional
hemp exemption. In an effort to circumvent that ruling
without public notice or comment, the DEA issued an
Rule" on October 9, 2001 that effectively established
its "Zero-THC Policy" on that date. The hemp
industry, including Kenex, took the DEA to court, and
on March 7, 2002, the 9th Circuit Court of Appeals
blocked DEAs rule pending the forthcoming decision
on the case, and hemp foods remain perfectly legal to
import, sell and consume.
The DEAs attempt to ban hemp food
sales in the U.S. is a clear violation of NAFTA. Hemp
is a recognized commodity of trade under both NAFTA
and WTO; the DEA did not provide any notice and opportunity
to U.S. trading partners or foreign companies to provide
input into its ruling; the U.S. did not conduct a risk
assessment or offer any science-based rationale for
issuance of the rule; the DEA did not seek to minimize
impact on trade; and it has not similarly regulated
poppy seeds and their trace opiates. The Government
of Canada, in response to the DEAs new rule, stated
that, "In reviewing the interim rule there is no
evidence that the effective ban on relevant Canadian
food products in the U.S. market is based on any risk
assessment. Therefore, Canada objects to these measures."
Visit www.VoteHemp.com to read court
documents and numerous scientific
studies concerning hemp foods. For more information
or to arrange interviews with representatives of the
hemp industry, please call Adam Eidinger at 202-986-6186.