How Trump is hurting farmers he promised to help
Bob Crumley is a North Carolina entrepreneur with a plan that parallels President Trump’s goal of making more stuff in America. Except the Trump administration is standing in the way.
Crumley runs a startup called Founder’s Hemp that aims to develop products made from commercial hemp, which is the non-psychoactive form of cannabis, similar to the plant that yields marijuana. Hemp is used to produce food, lotions, dietary supplements, textiles, automotive components and thousands of other products, all of them legal in the United States, and sold by stores such as Whole Foods, Trader Joe’s and Hobby Lobby. But virtually all such products are imported. Crumley wants to use raw material grown by farmers in North Carolina to produce a line of Made-in-America hemp products.
The Drug Enforcement Administration has a problem with that. A 2014 federal law lets farmers grow hemp for research purposes, as long as grow sites are certified and registered with the state. Backers of the crop consider that law a gateway to the commercialization of domestic hemp, with more than two dozen states participating. But the law remains murky in other areas, and government agents recently told Crumley he’d be committing a federal crime if he went forward with a plan to purchase hemp seed in Kentucky for North Carolina farmers to grow.
Trump has vowed to kill regulations that make it hard to do business—but so far, that doesn’t seem to apply to the hemp industry. “I voted for Donald Trump, because he said he’s going to bring jobs back to America, bring back the family farm,” Crumley tells Yahoo Finance. “But this isn’t making America great. The actions of the government are protecting foreign farmers and foreign companies.”
An opportunity for struggling farmers
American farmers have grown hemp since colonial days, and it was used to make sails for the Navy until steamships came along. But hemp became synonymous with marijuana when the Controlled Substances Act went into effect in 1970, and it was effectively banned as a crop after that. The 2014 law—pushed by Senate Majority Leader Mitch McConnell, mindful of farmers in his home state of Kentucky—made it legal to grow hemp once again, under limited circumstances. But a 2015 bill that would have made hemp legal without restrictions failed.
[Related: Trump might be coming for your weed.]
Hemp is a small industry, with annual sales of about $600 million in the United States. But it’s a welcome opportunity for farmers struggling with a glut of many crops, and low prices. And it’s well-suited to the climate in states like North Carolina, where once-lucrative tobacco farming is in sharp decline. “You should be able to make about twice what you make off soybeans,” says Waylon Saunders, a farmer in Asheboro, NC. “I’d put my whole farm in it, if I could.”
Since hemp was essentially eradicated as an American crop in the 20th century, seeds had to be imported after the 2014 law passed. A few states, such as Kentucky and Colorado, have now cultivated seeds they can ship to farmers in other states. But the DEA says that’s a no-no. “Industrial hemp plants and seeds may not be transported across state lines,” the DEA and two other agencies said in a “statement of principles” published last year.
The Trump administration may have further squelched the domestic hemp industry in February, when White House spokesman Sean Spicer said the government may pursue “greater enforcement” of federal anti-marijuana laws than it did under Trump’s predecessor, President Obama. The 2014 law distinguishes legal hemp as strains of the cannabis plant with no more than a 0.3% concentration of THC, the psychoactive ingredient in weed; the concentration THC in marijuana is at least 50 times greater. But industry officials complain that regulators often conflate hemp with marijuana, and some worry the Trump administration will crack down on both.
“The DEA got more aggressive in the latter days of the Obama administration, then kicked it into high gear after the election,” says Patrick Goggin, a lawyer who represents the Hemp Industries Association, a trade group. “Hopefully, at some point they’ll get that industrial hemp is not a drug.”
“It makes no sense”
This patchwork of conflicting laws and rules means it’s perfectly legal for importers to sell hemp products in the United States—but supposedly forbidden for domestic producers to sell the same products anywhere except in their own state. When Crumley tried to buy a 50-pound bag of hemp seed from a supplier in Kentucky earlier this year, he notified the DEA, as required. A DEA supervisor based in Greensboro, NC, told him he’d be violating federal law if he did so. So he never made the purchase. “It makes no sense,” says Crumley. “But they’ve got handcuffs and guns.”
Crumley may sue the DEA, hoping a judge will overrule the agency and allow him to bring seed into North Carolina. It won’t be the DEA’s first trip to court on the issue. The Hemp Industries Association is suing the agency in San Francisco over a move last year to classify certain hemp products as “controlled substances” subject to a federal ban, which the trade group says is illegal. That case stems in part from a 2016 DEA order halting the sale of hemp products developed in North Dakota outside the state. And in 2014, Kentucky sued the DEA for prohibiting it from importing hemp seed from abroad, a suit the state won.
Bills are pending in Congress that would fully legalize hemp, legitimizing the industry and getting the DEA off its case. But hemp’s association with weed has kept some lawmakers on the fence, and the outlook could dim further if the Trump administration chooses to enforce the federal law banning marijuana in the 8 states that have declared weed legal for recreational use. Attorney General Jeff Sessions is strongly opposed to the legalization of pot, though it’s not clear where he stands on hemp. The DEA and Justice Department didn’t respond to requests for comment on this story.
Meanwhile, farmers in North Carolina and other states that don’t have access to home-state seeds will miss out on this year’s growing season if the DEA doesn’t soon allow them to purchase out-of-state products. North Carolina officials plan to ask the Trump Administration for help, but the White House is obviously busy with many other matters, and understaffed to boot. “I don’t know why in the world they don’t want us to create this commodity in the US, for US people,” says Saunders, the North Carolina farmer. Even under Trump, the ways of Washington remain mysterious.
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman
