Good Cop, Bad Cop

A.G. Schimel rules then retracts on CBD, hemp industry

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Charles Collier
The Denmark News

MADISON — The Wisconsin Dept. of Justice sent shivers through Wisconsin’s budding hemp industry when a May 4 memo from Attorney General Brad Schimel seemed to endanger the crop’s currently most-profitable form: Cannabidiol oil, or CBD oil.

Less than a week later, DOJ and Schimel backed off their hardline stance to give breathing room to Wisconsin’s first hemp harvest in at least 60 years.

The May 4 directive banned distribution or possession of CBD oil except by pharmacists with special USDA and Drug Enforcement Administration licenses and the patients which they prescribe. CBD oil has shown promise as a medication for seizure conditions, hypertension, inflammation, anxiety, and several other ailments. Under a 2017 Wisconsin law signed by Gov. Walker, prescriptions can be written in very limited circumstances.

Schimel and DOJ drew those lines of legality to the industrial hemp pilot program in part because the legislation authorizing it states, “…a person may plant, grow, cultivate, harvest, sample, test, process, transport, transfer, take possession of, sell, import and export industrial hemp in this state to the greatest extent allowed under federal law.”

CBD is considered a cannabis extract, and therefore is a federally controlled substance.

“Except under very limited circumstances, the production of cannabidiol is illegal under Federal Law…the Wisconsin State Legislature and Congress have not authorized the production and possession of CBD except as outlined above,” the May 4 memo read.

After meeting with representatives of the Wisconsin Farm Bureau Federation and DATCP on Wednesday, May 9, DOJ and Schimel pulled back the CBD restriction, instead directing law enforcement against taking action against CBD oil as well as other hemp-related products.

“We all have always had full confidence in the successful implementation of the industrial hemp program in Wisconsin,” Schimel says in the second DOJ release on the topic.

“With the 2018 Farm Bill now working its way through Congress, it is likely that our current laws will be changed even further to make industrial hemp’s legality clear. Therefore, I am advising law enforcement not to take enforcement action against products made from industrial hemp that is grown under a lawful hemp research pilot program, including CBD, until Congress considers changes to the law, enabling the Wisconsin State Legislature to further clarify the status of these products.”

Senator Mitch McConnell (R-KY) has been angling for his recently introduced hemp decriminalization legislation to be attached to the 2018 Farm Bill. His home state of Kentucky was one of the first to adopt a pilot hemp program under flexibility in the 2014 Farm Bill and in that time the state has become a major CBD oil producer.

Jim Holte, President of the Wisconsin Farm Bureau Federation, said the organization was pleased with Schimel’s change-of-heart.

“In a time of low commodity prices, this new market is an opportunity for farmers to explore new opportunities,” Holte said in a May 10 statement. “Wisconsin Farm Bureau thanks DOJ for recognizing the legitimacy of the 2014 Farm Bill that allows any part of the industrial hemp plant to be used in the research pilot program and allow Wisconsin farmers to take advantage of these market opportunities.”

During the Legislative process last fall, six government agencies contributed reports on how the industrial hemp program would impact their roles and what, if any, institutional objections existed. DOJ was not among them.

• Dept. of Transportation didn’t expect new revenue from specialized freight hauling

• Dept. of Corrections noted that drug and background testing of farmers and processors required by the bill did not suggest an influx or decrease of inmates.

• Public Defender’s Office said that since no new crime was being created there likely would not be a rise in cases as a result of the bill

• The District Attorney’s Office figured that perhaps less DATCP cases would be referred to prosecutors.

• The University of Wisconsin System said long-term studies with the plant could vary in cost depending on their objective and that creating a Wisconsin heritage seed would be a five-year process requiring a PhD student and total estimated cost of $400K. The University estimated between $500K-$700K per year in peer review expenses, but did not request additional funds.

• Dept. of Agriculture, Trade and Consumer Protection had the most commentary, which is expected from the agency most heavily involved with the project. For constructing an adequate testing lab and hiring the necessary expertise, $324K was requested in start-up funds alone. DATCP noted that other states had added an additional full-time employee and additional workers.

DATCP’s report details, “Colorado, Minnesota, Hawaii, Kentucky and Washington require a much higher application fee (typically $400-$500 per registrant), an additional per field fee, an inspection fee that covers the inspector’s time and mileage (typically $35/hr plus mileage), and the full cost of sampling analysis. The application fee is charged regardless of whether or not any fields are eventually registered.”

Hemp farming applications in Wisconsin are triannual, costing either $150 per farmer or $5 per acre up to a $1,000 per registrant maximum. DATCP estimated an average of 100 farmers annually planting 6,000 acres of hemp would fall between $15K and $100K short of covering an estimated $320K of ongoing DATCP costs to uphold the program.

As of May 14, Bill Cosh, a spokesman for DATCP said that 264 grower licenses had been received, and 73% are registered to grow this season. As of Monday, 126 growers had received their licenses, as did 35 of the 105 hemp processors who submitted applications. On the same date, there were 2,004 acres registered for hemp cultivation in Wisconsin.

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