Tribal Council Considering Hemp Production
By Joe Morey, News Editor
On Dec. 12, Congress passed the Farm Bill which legalized the production of industrial hemp and hemp products and President Trump signed into law on Dec. 20.
The bill passed the House in a 369 to 47 vote; it passed the Senate the previous day in an 87 to 13 vote.
The following week on Friday, Dec. 28, a presentation on a hemp production plan was made to members of the Lac Courte Oreilles Tribal Governing Board by Jeffrey A. Cormell attorney with McAllister Garfield P.C., Tribal Cannabis Law Firm with offices in Colorado, California and Florida.
On Jan. 3 and Jan. 5, TGB member Tweed Shuman brought Cormell to speak with elder groups, both the LCO Elders Association and the Elder Advisory Council. Both groups had many questions and Cormell answered them. Shuman said he believed the elders came away with a positive outlook on hemp production.
Cormell stated in his presentation, “The 2018 Farm Bill provides an opportunity for tribes to create their own hemp laws and self-regulate. The federal government placed tribal law-making authority for hemp in parity with state. This is a watershed moment for the federal to tribal relationship, in recognizing tribe’s status in relation to states. LCO has the opportunity to write its own laws on hemp cultivation, hemp processing and hemp distribution, including but not limited to cannabidiol (CBD).”
Cormell further stated, “this [the Farm bill] authorizes transportation and shipment of tribally produced hemp products across state lines and allows for federal crop insurance and opens the door for USDA loans to assist in the cultivation of hemp.”
“We hope to pursue this and have an ordinance drafted to present to the United States Dept of Agriculture (USDA),” Shuman said. “This ordinance would be very important to LCO because it would be a tribal license, so we could plant, grow and harvest hemp, all under our own regulations, and not have the state tell us what to do. We plan to govern ourselves and be treated like the state is.”
Shuman said production of the hemp will be within reservation boundaries.
“I’m going to be pushing that we plant hemp this spring. We have the tillable land to do this, we just need to allocate the capital to get started and we’ll have another profitable revenue stream for the tribe,” Shuman said. He added there are grants the tribe can pursue through the USDA to help get it started.
Shuman said he will push to get the first crop in by May or June of this year.
“We know our land is tillable and ready to go,” Shuman added in reference to land by the casino and by the college farm.
Shuman said the plan would be to start out with hemp for textiles. Hemp for CBD oil would come later.
“Eventually, we hope to do it all from seed to product,” Shuman added. “The real lucrative part is the CBD oil.”
Shuman said hemp is a booming $1 billion industry, a quarter of which can be attributed to CBD Oil, which recent studies show may have a variety of health and wellness benefits. CBD is popping up in more and more products, from coffee and tea to supplements and beer.
Shuman said the tribal council would like to delegate the planning of the hemp production to appointment of a commission and/or director to see it through.
“We are looking into other tribes that have a processing facility. In the beginning, we hope to partner with other tribes, we plant and harvest a crop and then have it processed at another tribal processing facility. In the future, as this grows, we’ll look at our own processing,” Shuman mentioned.
Cormell explained the definition of hemp under the 2018 Farm Bill as, “The term ‘hemp’ refers to a plant under the genus Cannabis sativa L, and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Furthermore, Cormell explained, “The distinction between hemp and marijuana is the amount of THC in the plant on a dried weight basis. According to the USDA any Cannabis Sativa L plant with a THC content of more than .3% THC on a dry weight basis is marijuana. The .3% threshold of THC is critical.”
Section 297A. “Definitions” of the Farm Bill states, “the Term ‘Indian tribe’ has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance 18 Act.”
Section 297B. “State and Tribal Plans” of the Farm Bill states, “In General – A State or Indian tribe desiring to have primary regulatory authority over the production of hemp in the State or territory of the Indian tribe shall submit to the Secretary [USDA], through the State department of agriculture (in consultation with the Governor and chief law enforcement officer of the State) or the Tribal government, as applicable, a plan under which the State or Indian tribe monitors and regulates the production as described in paragraph 2.”
While marijuana remains illegal, hemp is legal as long as it doesn’t contain more than 0.3 percent of THC (the compound in the plant most commonly associated with getting a person high). Basically, hemp can’t get you high. Cormell elaborated on this point, “Congressional studies revealed that the psychoactive effect (the “high”) of THC begins at around 7% THC, in other words, .3% THC is nowhere near a level that would produce any psychoactive effect. In states like Colorado, that allow for adult use marijuana, where the intent is to get high, the THC content of that marijuana is usually 24% and higher.”
Section 297B of the Farm Bill, explicitly allows the transfer of hemp and hemp-derived products across state lines for commercial or other purposes. It also puts no restrictions on the sale, transport, or possession of hemp and hemp-derived products, so long as those items are produced in a manner consistent with the law.
Cormell presented estimates from the Hemp Business Journal that show the hemp industry is expected to grow to $1.9 billion in sales by 2022.
According to Cormell, there was $573 million in hemp sales in 2015, $699 million in hemp sales in 2016 and it jumped to $820 million in hemp sales in 2017.
A breakdown of the 2017 hemp market is as follows; 23% CBD oil ($190m), 22% for personal care ($181m), 18% Industrial Applications ($144m), 17% food ($137m), 13% Consumer textiles ($105m), 5% supplements ($45m), and 2% other consumer products ($16m).
“We are diversifying our revenue for the tribe,” Shuman said. “The casino doesn’t pull in what it used to. There is huge revenue potential in hemp. We’re getting close and we’re ready to roll.”