Pubdate: Sun, 18 Jan 2015
Source: San Francisco Chronicle (CA)
Copyright: 2015 Hearst Communications Inc.
Contact: http://www.sfgate.com/chronicle/submissions/#1
Website: http://www.sfgate.com/chronicle/
Details: http://www.mapinc.org/media/388
Author: Brooks Mencher

MALIGNED AND BANNED

Industrial Hemp: America's 'Billion-Dollar Crop'

Industrial hemp somehow survived America's narcotic age. Despite 
today's uncertain politics and incomplete laws, it's poised to become 
a major agricultural and industrial force. The manufacturing 
infrastructure is being built. Its penny stocks reflect hope, 
conviction and volatility. Research and development is under way, 
especially in construction materials and cannabidiol (CBD)-based medicines.

Oddly, however, hemp has been at a similar juncture before.

In the 1930s, hemp promised to change America. It had survived severe 
competition from cheaper fibers like jute, flax, sisal, abaca and 
vast quantities of imported Russian hemp. Technology had advanced and 
scientists had discovered that, besides rope, fabric and paper, hemp 
could be used in plastics, foods, fuel, dynamite - thousands of 
different uses from all parts of the plant: stalks for fiber; seeds 
for oil, hulls and mash; and high-cellulose hurds, the broken-up bits 
of the stem's core, for making building materials and plastics. Henry 
Ford created a car whose body was processed from hemp; it ran on hemp 
ethanol. And hemp was sustainable, unlike America's already vanishing 
forestland.

With a sort of nouveau Industrial Revolution at hand in the midst of 
the Great Depression, hemp was reintroduced with fanfare to the 
beleaguered American public by Popular Mechanics magazine, which had 
found in Cannabis sativa linneaus America's industrial salvation: 
farm jobs, manufacturing employment, raw resources, innovation and 
independence from imports.

In February 1938, the magazine dramatically predicted that hemp would 
become America's "New Billion-Dollar Crop," a forecast linch-pinned 
to a new version of the decordicator, a machine that separates fiber 
from the rest of the plant. Hemp, said Editor Henry Haven Windsor 
Jr., could produce four times the amount of paper pulp per acre as a 
forest, and it could be done every year as opposed to every 20. Yet, 
just as hemp seemed to reach its place in industry, a long-brewing 
fear rose from the shadows of urban America, and, caught in the glare 
of its flashier, frightening twin, marijuana, and the wake of 
Prohibition evangelism, hemp became a victim of an ascendant narcotic 
age. Its future vanished before it could arrive.

Today, however, the tenor has changed. Generations have come and 
gone, and hemp is no longer seen as a narcotic. Its new beginning may 
seem like deja vu, but it's not history repeating itself.

Tobacco-free hemp

Today, hemp returns not to its point of exile when it was essentially 
banned from America by the Marihuana Tax Act of 1937, but to a point 
far earlier: There is no economic infrastructure. There are no trade 
routes. There are no seed stocks, just feral hemp growing here and 
there, "ditchweed" left from World War II's "Hemp for Victory" 
campaign, or from America's more distant hemp past, which saw more 
than 400,000 acres under cultivation in the 1800s (before the Civil 
War, Kentucky alone had 160 hemp factories and employed several 
thousand workers).

Hemp Inc. 2014

And, there have been no decordicators, the powerful (and hugely 
expensive) fiber-processing machines until a peculiar series of 
events last year.

This revival tale begins in the 1990s, when the truth about tobacco's 
health impacts became known after decades of concealment by the 
industry. A lawsuit by the attorneys general of 46 states culminated 
in the landmark 1998 Master Settlement Agreement hugely affecting the 
tobacco giants: A payback was in order - a $200 billion fine, a 
medical fund and major hits to marketing strategies. Demand dropped 
and farmers suffered. Part of the settlement was to establish another 
crop for tobacco farmers. Hemp, of course, was illegal.

The agricultural replacement was kenaf, a stalky plant in the 
hibiscus genus known for producing coarse fiber much like jute. As 
part of the agreement, Raleigh-headquartered Alliance One, a major 
global tobacco player, bought a German-made decordicator to process 
thousands of new acres of kenaf in North Carolina. The crop also was 
established in foreign tobacco grounds of U.S. corporations, 
including Malaysia.

According to David Schmitt, who worked on the machine and is now Hemp 
Inc.'s chief operating officer, it took the German maker, Tamafa, a 
year to build the $15 million machine system, a year to install it in 
North Carolina for Alliance, and a year to debug it because it was 
originally engineered for hemp, not kenaf.

It was mothballed after five years, Schmitt said. "They made premium 
horse bedding ... and fulfilled the penalty requirement. Then they walked off."

Hemp Inc.'s Bruce and Craig Perlowin of Florida bought the 
decordicator last year "for a song." This family enterprise, with its 
made-in-America emphasis, also involved another brother, Jed; a 
sister, Karen Hammett; and Bruce Perlowin's two sons. With two 
semi-trucks that were part of the deal, they're in the process of 
moving the machine to Springfield, N.C., about 30 miles from Raleigh.

Along for the ride will be 15 million pounds of baled kenaf, also 
part of the deal and which they'll mill during their first year of 
operation as they await a hemp crop after this year's growing season. 
Much of the kenaf will be powdered for a slurry mix used in oil 
drilling. The third Perlowin brother, Jed, is spearheading a 
hemp-farming business and organizing other farmers to supply the 
decordicator, which will be retooled for hemp.

"We'll be up and running by March," said CEO Bruce Perlowin. In 
phases, he said, the company will be processing tow (short fiber used 
for cellulose fill) and longer fiber used for textiles, hempcrete (a 
building material that includes lime), cellulose-rich hurds from the 
woody core for plastics such as car parts, CDB extracts (medicines 
that use the "other" cannabinoid, which counteracts the psychotropic 
THC in marijuana), and other products.

"Research," Perlowin said, "has been so suppressed, it's just amazing 
what we can come up with now. Bulletproof vests, graphite 
alternatives," and numerous medicines and dietary supplements.

The company will soon operate the only decordicator in the United 
States. There are five such high-capacity machines in the world: two 
in South Africa and two in France. Canada, Schmitt said, has several 
decordicators, though they're smaller.

Much of Hemp Inc.'s grist will come from North Carolina and Kentucky, 
the latter of which is trying to legally reestablish a hemp industry 
that dates to 1775 and which rose to prominence by the Civil War. The 
state is at the forefront of today's hemp movement. Its pilot 
programs result from what Hemp Industries Association attorney 
Patrick Goggin attributed to "everything lining up," with Kentucky 
Sens. Rand Paul and Mitch McConnell, state agriculture Commissioner 
James Comer and the state university system all working in tandem.

California's hemp future

Political coordination was key to getting Kentucky's six major pilot 
programs running last year, and mutinous chutzpah has been Colorado's 
driving force. (Colorado farmers, so enthusiastic to start 
cultivating hemp, planned 1,800 acres last year - illegally, because 
they couldn't get legal seeds.) The Golden State, however, has 
neither coordination nor chutzpah. It is not on the cutting edge of 
hemp's golden dawn.

That's no fault of state Sen. Mark Leno, D-San Francisco, and Gov. 
Jerry Brown. Brown signed Leno's bill, SB566, in 2013. They faced an 
uphill battle and capped a 15-year legislative effort, potentially 
ending a hemp drought in the state.

Leno, whose interest in hemp as a viable California crop and industry 
dates to his time as a San Francisco supervisor, has watched the 
state's hemp bill fall victim to five vetoes - four from Gov. Arnold 
Schwarzenegger.

A sponsor of the last two bills, he suggested the politics were, at 
times, "frustrating." Twelve years of legislative efforts for What? 
"Hemp is a plant that has never been a drug," Leno said. "You can 
legally make thousands of products, from per to fuel to foods, and 
it's renew every 90 days. It takes no fungides or pesticides and less 
water than owing corn. ... The politics have been national." The 
cultural tenor changed drastical-between the last veto, in 2011, and 
own's approval of the measure two ars later. It is perhaps best 
exemplid by letters to the Legislature from enforcement agencies. A 
2011 memo Leno from the California Police chiefs Association cites 
many of the criticisms of the drug czar-sponsored SDA report of 2000 
(see Part I), and hoes ominously that, "To begin with, mp is illegal 
in the United States," d has "no real economic viability." e 
association urged Leno - and not ntly - to vote against his own bill, 
676. Yet by 2013, the California State Sheriffs' Association, in a 
letter to Leno and state. Cathleen Galgiani, D-Modesto, was eased to 
support SB566," a redux of the earlier bill that revised the 
definition of hemp, allowing county law enforcement wide to 
"concentrate on marijuana adication efforts while allowing for 
law-cultivation of industrial hemp."

Bureaucratic progress in California, Leno said, has been "less than 
inspiring." However, the senator is holding initial stakeholder 
meetings this month in Sacramento, involving academic and 
administrative representatives from CSU and UC, the state Department 
of Food and Agriculture, and farmers. He remains as optimistic about 
hemp in California as he has been for more than a decade.

Alta California

Despite the rough reintroduction of industrial hemp in California, 
the herb has a history here. The need to equip Spain's 18th century 
Pacific armada focused on its colony, Alta, or Upper, California, and 
the crown called upon California's missions to grow hemp. Mission San 
Jose, the second of the missions, became the center of 
experimentation in 1796, but the yield was so meager the crown began 
subsidizing the crop.

A change of venue resulted, and hemp growing was moved south to La 
Purisima, Santa Inez and San Luis Obispo missions. Hemp flourished in 
California: 1,800 pounds were produced in 1805, increasing 
exponentially to 220,000 pounds by 1810.

Unfortunately for hemp, unrest in Europe fomented Mexico's drive for 
independence, and Alta California's governor cut back production, 
allowing only enough for domestic use, not Spain's. California hemp 
faded into a vestigial crop of about 5,000 acres by 1920, grown 
largely in the San Joaquin Delta region. Only four states were 
producing at that time: Kentucky, which supplied almost all U.S. 
seed; Wisconsin, California and North Dakota.

Politics and hemp's future

Hemp faced other curtain calls in its peculiar American history: the 
1937 taxation ban; the 1957 closure of the last American hemp mill; 
the 1946 end to the brief Hemp for Victory campaign; and the final 
curtain in 1970 with the Controlled Substances Act.

But there's a game-changer in hemp's future: S134, which would define 
hemp - for all purposes, pilot program or not - as cannabis with 0.3 
percent THC or less, dry weight, separating it from the other 
cannabis, marijuana. Marijuana would remain on the Controlled 
Substances Act list, while industrial hemp would be removed.

It's still an uphill fight. The bill, sponsored by Sen. Ron Wyden, 
D-Ore., is the 114th Congress' reincarnation of bills dating back a 
decade. The most recent was last year, as S359, also sponsored by Wyden.

Hemp legalization was originally sponsored in the House by Ron Paul, 
R-Texas, (father of Kentucky's Rand Paul) in 2005. The senior Paul 
resubmitted its next incarnation in 2007, again in 2009, and yet 
again in 2011. It never made it out of committee. The most recent 
House bill, the Industrial Hemp Farming Act of 2014, HR525, was 
sponsored by Tom Massie, a Kentucky Republican, last year. He will 
reintroduce it this week for the current Congress.

His co-sponsors are likely to be the same this year as last: 33 
Democrats and 17 Republicans. Twelve of the co-sponsors were from 
California: nine Democrats, including Bay Area Reps. Barbara Lee, 
Mike Honda and Zoe Lofgren; and three Republicans, including Reps. 
John Campbell, Tom McClintock and Dana Rohrbacher.

S134 has three co-sponsors: Republican Sens. Rand Paul and Mitch 
McConnell of Kentucky and Democrat Jeff Merkley of Oregon. It was 
assigned last week to the Judiciary Committee.

There are no California senators on board. We should ask: Why not?
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MAP posted-by: Jay Bergstrom