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This extract is driving a hemp gold rush. But is it legal?

Sophie Quinton, Stateline.org on

Published in Business News

LONGMONT, Colo. -- In a few months, Dani Fontaine Billings will plant 80 acres of hemp at her farm here, out behind a clapboard farmhouse with views of the Rocky Mountains.

Some of the plants will grow tall, like bamboo, and yield grain and fiber for textiles and other industrial products. Others will look and smell like marijuana and yield a cannabis compound. The profitability of that compound, Billings said, is drawing many farmers and would-be farmers to the hemp industry.

Few people had heard of cannabidiol, known as CBD, before a 2013 CNN documentary, "Weed," that featured its healing powers. Now entrepreneurs put CBD into pills, tinctures, candies, body lotions and dog treats, and customers use it to ease health problems from anxiety and sore muscles to seizures.

Billings and her mother, Tracee Box, own and operate Nature's Root, a hemp spa tucked beside the American Legion in this suburb north of Denver. As many things in the spa as possible are made of hemp, from the bathrobes to the massage oil. But cannabidiol-infused products are among the best sellers, said the 31-year-old Billings. "We have a very large clientele that just wants to use the CBD on their bodies."

CBD can be derived from marijuana or hemp -- both are varieties of the cannabis plant -- but the marijuana version is only available in states that have legalized the drug. The hemp version, however, is easy to find online and in stores all over the country, including in spas and grocery stores. And because the hemp version isn't psychoactive, it could attract a bigger market: people who want to feel better without getting high.

But for growers and sellers there's a problem: The federal government is divided on whether the hemp CBD extract is legal. The 2014 federal farm bill says cannabis becomes hemp -- and legal to grow and market -- when its psychoactive potential drops below a certain level. But the 1970 Controlled Substances Act says only certain parts of the cannabis plant can be legally sold as hemp. That definition excludes the cannabis flowers, which are usually harvested for CBD.

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This month, a federal court in San Francisco will hear arguments in a lawsuit -- brought by Hemp Industries Association, a trade group, and two hemp companies -- that seeks to overturn the Drug Enforcement Agency (DEA) classification.

The current hemp CBD industry also faces long-term threats beyond questions about legality. As more states legalize marijuana, the industry may face more competition from marijuana-derived cannabidiol. And pharmaceutical companies are getting in on the action. Two cannabidiol drugs are moving through the Food and Drug Administration's approval process, and one of them -- an anti-seizure medication -- could hit the market this year.

Hemp was historically grown to make rope, sailcloth and textiles. But it fell out of favor as a cash crop in the 20th century, as states and the federal government banned marijuana, and cotton and synthetic materials became cheaper to produce.

Hemp's resurgence began four years ago when Congress passed the farm legislation, defining "industrial hemp" as cannabis with a concentration of the psychoactive compound tetrahydrocannabinol, or THC, of no more than 0.3 percent by weight. The law says states can allow universities and agriculture departments to grow hemp in order to study the plant's growth, cultivation and marketing.

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