Hemp, A Huge Opportunity For The US Agricultural Sector If Special Interest Lobbyists Can Be Kept At Bay In State Legislatures As Bills Are Being Written & Debated

Authored By:  Craig Brand  Ganja Law (CO) & Cannabis Law Journal




A Short Report By Cannabis Law Report In Conjunction With Craig Brand, Esq. of Ganja Law, PLLC.

Craig Brand, Esq., principal of Ganja Law a firm with offices in Florida, Colorado and California recently spoke about the current state and future hopes of a legal US hemp market in an interview.

He has also published on the subject via his law firm blog a number of times in 2017

Here at Cannabis Law Report we thought it a worthwhile exercise to re-publish some of his more salient points as hemp bills are being presented and pushed through numerous state legislatures  currently as the nation’s  agricultural sector re-discovers the versatility of the crop.

On being asked if he sees an open market for the commodity, Brand issues a word of caution for those who see a future of landowners small or large partaking in a free market.

“I believe that the multiple use and utilization of hemp creates a favorable patent argument for Big Pharma or companies such as Monsanto that makes defending more difficult.  Already we have seen some from the pharmaceutical sector pushing their agenda and attempting to take control of the CBD (Cannaboid) market. The pharmaceutical industry has already wrestled control over the relevant licenses in Canada and are pushing for an FDA requirement. Kansas is passing legislation that would require CBD products to be dispensed by a pharmacy and manufactured only by FDA approval; meaning through Big Pharma.   We, at Ganja Law, have already been preparing for this fight and stand against any person or organization attempting to control the CBD, THC, extraction and plant market-place.  We are anti-monopoly and fully support and battle for a free market; the same free market that bled to get us to this stage and would roll in their jail cells if we allowed Big Business to legally steal it from us.”

For those of you who enjoy a little history here’s a quick précis of humanity’s engagement with the hemp plant before we look at some of the issues facing the newly resurrected sector:

Hemp & Humanity: A Quick Primer

The first known human agricultural crop was recorded more than 10,000 years ago in Taiwan. This identified crop was hemp.

Four thousand years later, around 6,000 BC, cannabis seeds and oil were documented in China.

Fast forward into the next millennium and  in 70 A.D., we know that a physician in Nero’s army documented hemp’s use and what he believed to be proven medical benefits of cannabis in the Pharmacopeia.

Between 130-200 A.D., the Greek physicians including Galen documented the medical use and benefits of cannabis following the famous Chinese surgeon Hua T’o’s use of cannabis as an anesthetic.

It is recorded around 300 A.D., that the use of cannabis during childbirth is widely accepted in Jerusalem as a medical practice.

Two hundred odd years later, in 570 A.D., the French physicians Rabelais’s and Pantagruel mention cannabis’s medicinal effects and the Jewish Talmud, in 500-600 A.D., mentions the euphoriant properties of Cannabis and the benefits thereof.

Another fast forward and we are now in Tudor England.  In 1533, King Henry VIII fines farmers if they do not raise hemp as part of their agriculture.  One of the many reasons for the importance of hemp in this period is the growth of both nation state navies and private merchant fleets. Hemp has become essential for manufacturing reliable sails and rigging. The world’s economy is growing via sea trade and the hemp plant plays a central part in geopolitics for the next two to three centuries.

In 1563 Portuguese physician Garcia da Orta reported on marijuana’s medicinal effects.

1578 China’s Li Shih-Chen writes of the antibiotic and antiemetic effects of marijuana and by 1621 A.D., Burton’s Anatomy of Melancholy states that cannabis may treat depression and begins to document it’s specific medical uses.

In 1794, The New England Dispensatory and The Edinburgh New Dispensary begin publishing their scientific studies and findings concerning the benefits of cannabis.

By the late 18th century and early 19th  century not only is cannabis gaining favor in the medical community but also the hemp industry is beginning to flourish throughout the United States with crops being growing in Mississippi, Georgia, California, South Carolina, Nebraska, New York, and Kentucky.

In 1850 A.D., cannabis is added to The U.S. Pharmacopoeia.  Cannabis becomes a widely dispensed medical drug to be sold in general stores as well as pharmacies in the U.S.

Come the twentieth century the plant is now incorporated into the processes of the industrial revolution and in 1916 the United States Department of Agriculture (USDA) chief scientists Jason L. Merrill and Lyster H. Dewey created paper made from hemp pulp, which they concluded was “favorable in comparison with those used with pulp wood”.

In USDA Bulletin No. 404. From the book “The Emperor Wears No Clothes” by Jack Herer the USDA Bulletin N. 404 reported that one acre of hemp, in annual rotation over a 20-year period, would produce as much pulp for paper as 4.1 acres (17,000 m2) of trees being cut down over the same 20-year period. It was estimated that this process would use only 1/7 to 1/4 as much polluting sulfur-based acid chemicals (Dow Chemical) to break down the glue-like lignin that binds the fibers of the pulp, or even none at all using soda ash.

It was discovered that dioxin, used for debarking trees, contaminates the rivers.  Such contamination would be avoided in the hemp paper making process, which does not need to use chlorine bleach (as the wood pulp paper making process required).  Instead, the hemp process safely substitutes hydrogen peroxide in the bleaching process. If the new (1916) hemp pulp paper process were legal today, it would soon replace about 70% of all wood pulp paper, including computer printout paper, corrugated boxes and paper bags.  Hemp cultivation could severely damage if not end the production of paper from tree pulp.

We could also document the dismantling of the worldwide hemp industry from the 1920’s onwards led in the main by a number of US administrations.

But that story, as we know, has been told many times.

So,  let’s look to Attorney Craig Brand’s analysis of today’s hemp industry told through a triptych of articles published via his law firm website in the first quarter of this year.

He starts by warning us what may be in store for the hemp sector if the world of CBD is anything to go by:

“America’s Hemp/CBD Industry Better Wake Up and Heed Warning -The CBD Market Might Just Have Been Hijacked” he warns.,
Brand argues that The DEA is not the sector’s foremost concern, rather the pharmaceutical giants and the big end of town such as the Monsanto’s of this world, that, he suggests, have been stalking (the industry) like hyenas.

U.S. states are now passing legislation allowing for greater hemp pilot programs and increased use and utilization of not only American grown hemp but also its derivatives, extracts, industrial applications and sales.

This year the 2017 Farm Bill will go before Congress. A bill that’s asking the legislature to assist farmers . Passage of the bill would include the entitlement to sell hemp and its derivatives, extracts and oils intra-state, free from DEA and other law enforcement intrusion.

But again Attorney Brand sounds a note of warning, It’s happening America.  Our industry is going to be taken from us should we not join together and exercise all of our legal entitlements for yet another round of “Keep Hemp Great.”  For those in the cannabis industry, you are warned as Pfizer is doing to THC what GW Pharmaceuticals is doing to CBD.

Practicing and consulting on a global basis, Brand says he has seen and been involved in every aspect of the developing hemp industry and has been closely watching as “Big Business” and “Big Pharma” have been tying up agricultural land, setting up research facilities, engaging in confidentiality agreements, and, also, he notes, doing so through the use of unrecognized (shelf company) names, shielding their true identity.

Brand refers, as an example, to a report earlier in the year by website, Leafly, about a company  Greenwich Biosciences who retained the well-connected California-based lobbyist Kurt Sternbridge to help them in their endeavors.

Who or what, we ask, is Greenwich Biosciences?  A little research reveals they are none other than GW Pharmaceuticals  the UK based pharmaceutical giant who has already wrapped up a number of essentially monopolistic deals with states in Australia to produce CBD for medicine in that country.

And where has Greenwich Biosciences sought to begin their  campaign to take over and monopolize the hemp industry in the USA?  Sternbridge, we are told, is to lobby the states of Arizona and Idaho, and possibly California. In Wisconsin,  the lobbying firm, Martin Schreiber & Associates was hired. In Florida, Douglas Russell, a former top official with the state’s health care industry was engaged, and Stephen J. Buckner was hired in Washington State. In Minnesota, the company retained Randy Morris.

And it appears their lobbying is already paying dividends.  December 2016, they, it is suggested, quietly caused the introduction of State House legislation in Nebraska and South Dakota.

If passed by the legislatures and signed into law, these pro-pharma bills could have material implications for the legality and availability of CBD products. The two bills, which are essentially identical to each other would give GW Pharmaceuticals a monopoly for the sale of products that include CBD in those states.

Presently neither of these two states has any permissible cannabis or hemp industry, making Greenwich Biosciences’ predatory and calculated actions easy to achieve as there is no organization to oppose them.

South Dakota’s bill, SB 95, exempts CBD from the state definition of marijuana and moves it under state law, from a state-designated Schedule I drug to a Schedule IV substance.  Luckily this bill did not pass as GW had hoped.

Brand adds, Epidiolex, manufactured by GW Pharmaceuticals, is currently the only plant-derived CBD drug close to obtaining FDA approval. If we do not intervene now, GW Pharmaceuticals just might obtain a monopoly on the sale of health medicine products containing CBD. The FDA approval of Epidiolex to treat one or two rare forms of syndromes might prevent an entire Hemp industry from flourishing and allow GW Pharmaceuticals to monopolize the market for CBD formulations. Upon the FDA approval of Epidiolex, the FDA could, if they wished, issue cease and desist orders to anyone selling products containing CBD for health, wellness, or medical purposes. This would include companies, such as dispensaries or on-line virtual stores or even present CBD producing companies that are selling products containing CBD in states where such sales are currently permissible. If the FDA is not enough, GW could take legal action against any company or person infringing on its patents or selling any product containing CBD.
Published  Feb 21, 2017.

In an earlier piece published at the beginning of February this year. Brand tackles the FDA with his article, Hemp / CBD: Companies Should Worry About FDA, Not DEA, Intervention

He writes:

It’s been nearly two months since mainstream media outlets and several cannabis publications published headlines claiming that the Drug Enforcement Administration (DEA) was rescheduling cannabidiol (CBD) into a Schedule 1 substance and that some serious, Drug War-era crackdowns were coming.

I reported then, and stand by my coverage, that this is not the case. The DEA did not target the hemp/CBD industry but instead created a new tracking code for the agency to categorize cannabis concentrates separately from flower, plants, and other products. Confusing verbiage in the rule change, which took effect January 13, led to the widely-reported misunderstanding; however, the fact remains that CBD from cannabis has always been considered a Schedule 1 substance under the Controlled Substances Act.

It wasn’t until the 2014 Congressional Farm Bill that industrial hemp (which, under federal law, must contain less than 0.3 percent THC) was legalized. Lawmakers accomplished this not by removing hemp or CBD from the Controlled Substances Act, but by prohibiting the Department of Justice from spending funds on prosecuting state-legal hemp operations, which laid the groundwork for the CBD hemp market. Only Congress — not the DEA — has the power to undo that act.

In a recent interview with Ganjapreneur, I said that, instead of worrying about the DEA, hemp entrepreneurs should be more concerned about actions taken by the Food and Drug Administration (FDA). “I don’t necessarily see the DEA as the villain of the [CBD] industry,” Brand said. “The bigger danger is, when it does become legal, what is the FDA going to do with it?”
The real dangers facing hemp-derived CBD

There are two major issues that the FDA will likely look to as they regulate hemp-derived CBD. These are the irresponsible “bad apples” who are currently participating in the industry, and the eventuality of a corporate takeover by everyone’s least-favorite agricultural monstrosity, Monsanto (or a similar corporate powerhouse).

Though hemp-based CBD is normally beyond the DEA’s scope of influence, rule-breaking individuals have gained the agency’s attention by producing, selling, and purchasing “hemp,” “hemp oils,” or extracts which contain an illegal amount of THC. Oftentimes, these are simply cases of bad luck or poor foresight; other times, however, there are troublemakers who are purposefully trying to circumvent federal drug laws.  Sadly, these instances support the unfortunate perception that CBD entrepreneurs are would-be cannabis pushers. This could ultimately worsen the industry’s image and lead to even harsher restrictions.
“The industry has to regulate itself. If you do things right, stay compliant, if you self-police, you shouldn’t have to look over your shoulder or require government intervention.”

At Ganja Law we are now creating legal policies, compliance protocols, and safeguards for the international cannabis and hemp law practice — however, concerns about a corporate takeover of the CBD marketplace don’t come with a solution as simple as just obeying the rules. We expect regulators to let everybody who has fought so hard for legalization finish the fight, and then Monsanto ,or companies of that ilk, will go ahead create their own strains, which will be quickly ushered through by the FDA.

We argue that both the hemp and cannabis industries should be extra wary of industry developments involving Big Pharma when federal prohibition finally crumbles. If we don’t solidify the rules and players now, be careful what you wish for should cannabis and hemp gain federal approval and we haven’t sidelined those big businesses that have been quietly lurking in the wind. Monsanto is already growing various strains of hemp. You don’t have to be a rocket scientist to figure out their next move and our forthcoming fight to remain on the playing field.
Published Feb 8, 2017

But the news isn’t all bad Brand and his firm see 2017 as the year to usher in new hemp reform and further opportunities within the sector.

A growing selection of U.S. states have now legalized the production, cultivation, and sale of qualifying hemp. On January 4, 2017 a coalition of lawmakers in New Hampshire formally filed a bill prohibiting hemp’s designation as a controlled substance, as has Connecticut in 2014 and Vermont in 2015. And, as of a few days ago, West Virginia lawmakers have clarified language in a bill adding substances to the drug schedule that would allow the sale, distribution, and prescription of hemp-derived CBD oils.

This new bill, if passed, would legalize full-scale commercial hemp farming and treat it just like any other agricultural crop as in Colorado and Kentucky .

Presently all licensed Hemp companies are bound by their State’s Department’s of Agriculture and their pilot programs, rules, regulations, licensing criteria and compliance as well as compliance pursuant to their State’s enforcement policies regarding delta-9 tetrahydrocannabinol (“THC”).

States such as Colorado now have a pending Bill which would allow the Department of Agriculture, not the State’s Marijuana Enforcement Division to regulate the amount of delta-9 tetrahydrocannabinol (“THC”).  SENATE BILL 17-090, requires the commissioner of agriculture to determine the level of delta-9 tetrahydrocannabinol in industrial hemp by measuring the combined concentration ocannabinol and tetrahydrocannabinolic acid. The rules shall also establish a process by which a registrant may apply to the commissioner for a waiver from the delta-9 tetrahydrocannabinol concentration limits under circumstances specified in the rules.  Such innovative and commendable State action, as Colorado’s initiative, can revolutionize the hemp industry and provide invaluable dollars, job growth, and innovation to the agricultural and CBD industry, let alone all other industries associated with hemp.

It also does not appear that the DEA’s December 13, 2016, Amended Rule will materially impair the hemp industry or the way it continues to engage in business.

Brand writes on the firm’s website, “The properly licensed companies are involved in business as it is licensed by and through a state pilot program established by a Congressionally approved Bill and further protected from interference by the Omnibus Appropriations Act of 2016.  The Amended Rule, if taken literally and if the DEA is not misleading the public it serves, is creating a new control number for the hemp extract and CBD. Note, that hemp, itself, already has a control number and has since 1970 been classified as a Schedule I substance.  This new rule does not contain any discussion regarding any new enforcement initiatives, actions, or safeguards that would be adverse to the CBD industry unless it was allegedly used in violation of the FDA. The new Amended Rule as explained by the DEA’s Ms. Barbara Carreno was created for and its purpose being for internal documentation purposes to make their work more efficient and clinical trials with the substances more easily identifiable.  This does not mean that the DEA is misleading the public with a secret agenda or with hidden malicious intent against the hemp or CBD industry, but to do so would mean that the DEA would be inviting further Federal Court rulings, possible congressional action, and possible executive fall out, all of which could significantly backfire against the DEA and other law enforcement agencies.”

To wrap up; the forces at play in the growing U.S. hemp sector are recognizable to any seasoned industry watcher. State legislatures looking for positive solutions but susceptible to the combined influences of persuasive lobbyists and conservative Federal departments looking to defend budgets and territory.

The economics will, of course, steer us toward a relatively sensible regulated market over time but it remains to be seen how much influence the big bio and agricultural corporations have in terms of final state and federal legislation when it comes! IP issues and, less we forget the issue of farming practices themselves.

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