Hemp lobbying surges on the heels of legalization

By Liz Crampton

Hemp advocacy was once limited to a handful of grassroots organizations and people — including one dressed entirely in hemp clothing and sporting a hemp briefcase. The small lobbying force aimed to teach congressional offices the basics about the crop and its untold potential for farmers, manufacturers, retailers and consumers.

But with last year's legalization of hemp through the farm bill, lobbying has surged: Businesses, universities and trade groups are angling for influence as they break into the rapidly expanding, and still largely unregulated, industry.

The group of influencers has expanded to include major Washington power players, including Walmart, Conagra, Patagonia and GW Pharmaceuticals. Agriculture mainstays such as the American Farm Bureau Federation, along with some state farm bureaus including Oregon and North Carolina, have lobbied on hemp.

And while hemp was listed just twice on federal lobbying disclosures in 2010, some 87 disclosures mentioned it in 2018, according to a POLITICO analysis. So far this year, hemp has been appeared in 72 disclosure filings.

“The lobbying is a sign of the economics behind this,” said Eric Steenstra, president of Vote Hemp, an early grassroots hemp trade association that has worked since 2005 to legalize the crop. “The fact that there’s so many people interested in it tells you that there’s business happening there — and that’s a good thing.”

Some estimates predict the U.S. hemp industry could be valued at more than $26 billion by 2025, propelled in large part by the rapid growth of CBD, which is derived from hemp and now infuses everything from lotion to lemonade. And hemp can be used in seemingly countless ways, from textiles to medicinal products to building materials.

Universities also have gotten into the game. Institutions such as Cornell, Oregon State University and the University of Kentucky have cited work addressing hemp research. That work has paid off for Cornell, which was awarded $500,000 by Congress in August to establish a hemp seed bank.

Pyxus International, a global tobacco company formerly known as Alliance One International, recently signed a research agreement with Cornell that focuses on hemp production and CBD. That's now the focus of some of its lobbying.

"One of the most acute issues, especially given projections for the industry’s growth potential, is a lack of clear policies and regulatory frameworks on a federal level," Pyxus CEO Pieter Sikkel said. "Farmers need certainty that there will be a market for their crops, not just today, but in the future, to effectively meet the consumer demand for hemp-derived products."

The formation of industry trade associations also marks a turning point in the Washington lobbying scene. The U.S. Hemp Roundtable is the leading spender among them: $352,500 since 2017. It was formerly the Kentucky Hemp Industry Council, representing the state where the organization has its roots.

Now that hemp is legal, two of the Roundtable's top priorities are helping states pass legislation permitting hemp programs and pressuring the FDA to issue guidance on CBD, said Jonathan Miller, the group's lobbyist.

The industry is also concerned about ensuring access to banking services for cannabis companies and wants to see the Safe Banking Act, passed by the House last month, signed into law.

Miller, a Kentucky Democrat, created the Kentucky Hemp Industry Council in 2014. He said it "started off as four hemp firms in my basement" and it had a $20,000 budget. Today, the Roundtable represents more than 85 companies across all parts of the hemp supply chain.

And before Walmart and Patagonia had their hands in hemp, there was Ben Droz. Starting a decade ago, he ran a one-man, one-issue lobby shop for Vote Hemp and roamed the halls of Capitol Hill decked out head-to-toe in clothing made of hemp — including a hemp composite briefcase he used to store hemp paraphernalia like seeds to give away.

His opening message was simple: Hemp is not the same as marijuana. They may come from the same plant species, but unlike marijuana, hemp contains minuscule levels of THC, the compound that gives users a psychoactive high when smoked or ingested.

Once Droz's audience wrapped their heads around that key distinction, he then told anyone who would listen about the plant’s potential to give American farmers a huge leg up as a new source of revenue, as well as its ability to be used in clothing, building materials, food and countless other ways.

“I was just trying to normalize hemp so that people could see hemp was another bio-based resource, completely different from the stigma and cultural associations with marijuana,” Droz said. “We were trying to break those stereotypes that were pretty well ingrained back in 2009.”

Vote Hemp was trying to rally support for the Industrial Hemp Farming Act, which would have legalized hemp production. Gradually, members started joining as co-sponsors. Former Rep. Ron Paul (R-Texas) and Sen. Ron Wyden (D-Ore.) were the first sponsors in their respective chambers. Another early champion was Rep. James Comer (R-Ky.).

Eventually, seeing a major economic opportunity for farmers in his home state and elsewhere, Majority Leader Mitch McConnell got on board with hemp. His support led to an amendment being tacked on to the 2014 farm bill that permitted states to run hemp pilot programs. After that, the hemp floodgates opened and pressure grew for the crop to be legalized for industrial production nationwide, which happened with McConnell's continued support last year.

Droz said he's not surprised to see hemp become legalized but he was caught off guard by how quickly things evolved. And he's aware of how industry participants have changed.

“Hemp is a microcosm of how things get done," he said. "As its been growing, it's been changing. It's losing part of its 'let's do it for the American people’ and now it’s more ‘how can big companies get bigger.’ It is a model of that.”

Janie Boschma contributed to this report.