State officials approved three businesses Friday morning to grow, process and distribute industrial hemp in Washington state, according to a spokesman for the Washington Department of Agriculture. Hemp, the variety of cannabis that won’t get you high, but will do just about anything else, has not been legally grown in Washington state for nearly a century.
The three licensed entities include: Palmer Farmers, Inc., which received a permit to grow hemp; The Colville Confederated Tribes, which received a license to grow and process hemp; and HempLogic USA, which was licensed to distribute hemp seed.
Washington is far from the first state to legalize hemp—more than 30 states have passed laws attempting to relax the federal prohibition on the plant—but Washington’s program is one of just a dozen programs in the country that received approval from the Drug Enforcement Agency (DEA) to import international hemp seeds.
High-quality hemp seeds on a commercial scale are nearly impossible to find within the state, so access to international hemp seed may prove beneficial to Washington’s nascent industry.
On top of seed shortages, a lawsuit alleging that one farmer got preferential treatment in the application process could present another barrier to getting the fledging program off the ground.
One prospective hemp farmer alleges that the state improperly fast-tracked seed acquisition for a select group of farmers. In a lawsuit filed in Thurston County District Court, John Worthington claims the state set up the import of hemp seeds from a Canadian company for these farmers before seed acquisition forms were made available to the public and more than a month before the program’s rules were even effective. Worthington is asking the court to temporarily block the program, claiming it effectively organized “an unlicensed monopoly outside the rulemaking process” for eight farmers.
But Hector Castro, a spokesperson for the Washington State Department of Agriculture (WSDA), said the department did not expect the lawsuit to create a holdup.
A judge declined to block the WSDA program with a summary judgement at the lawsuit’s first hearing on May 19, but Worthington’s lawsuit is still working through the court system.
Farmers looking to get into the hemp market have been following the WSDA’s year-long rulemaking process closely. They are eager to acquire hemp seeds because the window is closing to plant seeds for this summer’s crop. The WSDA publicly told applicants in an info packet still posted to its website to wait until “WSDA has finalized IHRP rules and begun approving licenses” before they contract for any hemp seed.
But while Worthington waited for further guidance, Emily Febles, the rules coordinator for the WSDA program, was allegedly setting up seed imports for a select group of farmers, according to the lawsuit. An e-mail filed as evidence with the lawsuit, and acquired by Worthington through a public record’s request, shows Shane Palmer, an employee of Hemp Logic USA, filing a WSDA Seed Acquisition Form with Febles on April 5—more than a month before that form was publicized in a WSDA newsletter and 40 days before the rules of the hemp program became legally effective. Palmer writes in the e-mail that “our goal is to still get the seed in the first week of May…”
The earliest WSDA could issue permits was on May 14, when the program’s rules became effective, meaning Palmer expected to receive hemp seed before HempLogic USA had a license.
Febles responded to Palmer’s e-mail eight minutes later on April 5, writing, “I will begin working to get the permit today,” according to evidence filed with the lawsuit.
Another for included in the lawsuit shows that HempLogic requested 85 bags of hemp seed from Hemp Genetics International, a Canadian company on April 5, and then 40 bags of seed from the same company on April 25. A third form shows that a separate Washington company requested 20 bags of seeds from an unlisted seed exporter on April 27.
Febles and Castro were unable to specify when the state first made seed acquisition forms available to the public, but the hemp program’s newsletters did not mention the form until May 15, 40 days after HempLogic USA turned in their seed acquisition form.
Febles maintains that WSDA’s recommendation to avoid contracting for hemp seed prior to rules being finalized was not intended to be a rule. If a farmer contracted for seed and then failed to get a permit to farm hemp, that farmer would still have to pay for seeds they could never use. The WSDA was attempting to prevent that, according to Febles.
“Right now, anyone would be able to bring in seed into the state and they can store it at our DEA-approved storage in Spokane, but if you never receive a license, for whatever reason, you would never have access to your seed,” Febles said.
Castro said the first shipment of hemp seeds facilitated by the WSDA program would be delivered to a DEA-approved facility by the end of last week, but declined to specify which farmers they will go to.
Worthington claims that DEA import permits entered as evidence in this case that the seeds are bound for HempLogic USA because the permits show the same number of seeds (85) as they requested in April and from the same Canadian supplier.
E-mails between the supplier and a business partner of Worthington’s, filed as evidence in the lawsuit, show that the Canadian company was aware of HempLogic USA’s request for seeds. In the e-mails, Jeff Kostuik, a sales employee for Hemp Genetics International, told Worthington’s business partner that it was too late in the growing season for Hemp International to facilitate sending hemp seeds, but the employee directed the prospective farmer to HempLogic USA: “I currently have 2 shipments leaving for the State of Washington this week. Due to being this late in the season, I would suggest you contact Cory Sharp and or Shane Palmer to see if they could spare any seed for your client.”
It appears Febles directed prospective hemp farmers to HempLogic USA as well. A newsletter published by the WSDA on April 13 directed readers to HempLogic USA’s website under the title: “Looking for Industrial Hemp seed?”
Worthington isn’t the only farmer upset by the way Febles handled this hemp seed acquisition process. Kathleen Greenbaum, whose family owns a small farm in Whatcom County, said she followed the rulemaking process closely and was never told she could acquire hemp seeds before the program’s rules became effective.
“Effectively everybody was shut out of this grow season except for Hemp Logic and anybody affiliated with their group,” said Greenbaum, who filed a statement in support of Worthington’s lawsuit. “I know how state government works and that’s not how it is supposed to work.”
Doris Hamilton, the manager of the Kentucky Department of Agriculture’s industrial hemp program, said their program would “absolutely not” give a farmer a permit to import hemp seeds before they are approved to participate in the program.
Russell Baer, a special agent with the DEA, said his department does not look into state licensing of hemp businesses.
It appears that Febles and HempLogic USA didn’t think Worthington’s lawsuit would delay the program – the company had originally planned a hemp planting event on May 24 in Moses Lake. Tickets for the private event, which was cancelled a day before the planned date, cost $200.
It's now been rescheduled for June 6.