DEA Versus Farmers and the States Regarding Legal Hemp Production
"Federal law prohibits cultivation without a permit. DEA determines whether any industrial hemp production authorized under a state statute is permitted, and it enforces standards governing the security conditions under which the crop must be grown. In other words, a grower needs to get permission from DEA to grow hemp or faces the possibility of federal charges or property confiscation, regardless of whether the grower has a state-issued permit.61
"Although many states have established programs under which a farmer may be able to grow industrial hemp under certain circumstances, a grower would still need to obtain a DEA permit and abide by DEA’s strict production controls. This relationship has resulted in some high-profile cases, wherein growers have applied for a permit but DEA has not approved (or denied) a permit to grow hemp, even in states that authorize cultivation under state laws.
"In the past there has been ongoing tension between federal and state authorities over state hemp policies. After North Dakota passed its own state law authorizing industrial hemp production in 1999,62 researchers repeatedly applied for, but did not receive, a DEA permit to cultivate hemp for research purposes in the state.63 Also in 2007, two North Dakota farmers were granted state hemp farming licenses and, in June 2007, filed a lawsuit in U.S. District Court (North Dakota) seeking 'a declaratory judgment' that the CSA 'does not prohibit their cultivation of industrial hemp pursuant to their state licenses.'64 The case was dismissed in November 2007.65 The case was appealed to the U.S. Court of Appeals (Eighth Circuit) but was again dismissed in December 2009.66 The farmers filed an appeal in May 2010.67
"Even if DEA approves a permit, production might be discouraged because of the perceived difficulties of working through DEA licensing requirements and installing the types of structures necessary to obtain a permit. Obtaining a DEA permit to produce hemp requires that the applicant demonstrate that an effective security protocol will be in place at the production site, such as security fencing around the planting area, a 24-hour monitoring system, controlled access, and possibly armed guards to prevent public access.68 DEA application requirements also include a nonrefundable fee, FBI background checks, and extensive documentation. It could also be argued that the necessary time-consuming steps involved in obtaining and operating under a DEA permit, the additional management and production costs from installing structures, and other business and regulatory requirements could ultimately limit the operation’s profitability.
"There is little information about DEA’s permit process and on facilities that are licensed to grow hemp, even for research purposes. Previously reports indicated that DEA had issued a permit for an experimental quarter-acre plot at the Hawaii Industrial Hemp Research Program during the period from 1999 to 2003 (now expired).69 Most reports indicate that DEA continues to be reluctant to grant licenses to grow hemp, even for research purposes.70 Recent indications are that some land grant university researchers may have been granted licenses to conduct hemp research under certain conditions.71
"In recent years, U.S. producers have begun to grow hemp under state law (Table 2). Some are foregoing the requirement to obtain a federal permit. For example, in 2009, Montana’s Agriculture Department issued its first state license for an industrial hemp-growing operation in the state, and media reports indicated that the grower did not intend to request a federal permit.72 Such cases continue to pose a challenge to DEA of whether it is willing to override the state’s authority to allow for hemp production in the state. It is also a test of states’ rights."
Johnson, Renée, "Hemp As An Agricultural Commodity," Congressional Research Service (Washington, DC: Library of Congress, March 10, 2017), pp. 17-18.