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Governor will let Kentucky hemp bill become law

Ben Finley, Associated Press

FRANKFORT, Ky. (AP) -- Kentucky law will now allow industrial hemp farming — but only if the federal government ever lifts restrictions on the plant.

Gov. Steve Beshear on Friday said he will let the bill become law without his signature. The governor said he won't actually sign the legislation out of concerns, shared by some in law enforcement, that marijuana growers could camouflage their illegal crops with hemp plants.

Hemp is similar to marijuana but has a negligible amount of THC, the psychoactive compound that gives marijuana users a high. Hemp can be used to make products including the cosmetics and nutritional supplements sold at stores such as Whole Foods Market. Proponents of hemp farming say it could be a cash crop for U.S. farmers.

Beshear said state officials should have time to work out their concerns if the federal government allows farmers to grow the plant.

"I strongly support efforts to create additional legal cash crops for our farm communities," Beshear told reporters. "At the same time, we have a tremendous drug problem in Kentucky, and I want to make sure that we don't do anything that will increase that drug problem."

Kentucky is now the ninth state to open the door to hemp farming, according to a December report from the Congressional Research Service. A federal bill to legalize industrial hemp is pending in Congress. U.S. Sen. Rand Paul said in March that he will ask the federal Drug Enforcement Agency to give Kentucky and other states a waiver to cultivate the plant.

In a statement to The Associated Press on Friday, the DEA said it continues to make no distinction between marijuana and hemp as a controlled substance, regardless of the difference in THC content.

"Any person who seeks to grow marijuana for any purpose, including industrial purposes, must be registered with the DEA," spokesman Rusty Payne said in a statement.

Payne said the DEA does not release specific information regarding the farmers it has registered to grow marijuana, citing privacy concerns. But so far the agency has granted only one permit to grow hemp, to Hawaii in 1999, for a university to conduct research on a quarter-acre plot, according to a September report from the University of Kentucky's College of Agriculture.

North Dakota in 1999 passed its law to allow hemp farming. But in 2007, North Dakota State University failed to get a DEA permit to cultivate it for research purposes, according to the Congressional Research Service report. A federal judge also dismissed a lawsuit filed by two North Dakota farmers in 2007 who claimed industrial hemp does not fall under the Controlled Substances Act.

Most hemp-based products are imported to the U.S. from China. Industry estimates for North American retail sales of hemp-based products are as high as $400 million a year, although those numbers are hard to verify, the Congressional Research Service report said. The statistics for U.S. imports of products labeled as hemp, such as seeds and fibers, were much smaller at $11.5 million.

"I think there's a lot of opportunity out there," Kentucky state Sen. Paul Hornback, the sponsor the commonwealth's hemp bill, told the AP. "It's hard to gauge what the opportunity is as far as economic development, be it on the farm in production or be in manufacturing and the sale of products. But I know we've had a lot of interest from a lot of different companies that are interested in using hemp byproducts, be it the oil, be it the fibers, be it all parts of the plant."