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Hemp advocates tout hemp's economic potential

Bruce Schreiner, Associated Press

LOUISVILLE, Ky. (AP) -- For a century, G.F. Vaughan Tobacco Inc. has been in the business of processing tobacco — a once-lucrative operation whose heyday is long past, like the rest of Kentucky's burley sector. So the company is looking for something new.

One possibility is industrial hemp, an outlawed cousin of marijuana that once was a staple of Kentucky agriculture. The long-dormant hemp crop with a multitude of uses could make a comeback if some prominent Kentucky politicians get their way.

Wanting to be ready if production is legalized, Vaughan executives are planning a trip to Canada for an inside look at how the tall, leafy plant is processed north of the border, where hemp has taken root as a cash crop.

The question on their minds is whether Vaughan's equipment could be adapted to process hemp.

"Our tobacco business is not what it used to be and we've got a lot of capacity here that's unused," said Conrad Whitaker, president of the Lexington-based Vaughan. "We'd like to have a product that we could fill in with."

Kentucky Agriculture Commissioner James Comer sees untapped potential for hemp — from farm to factory.

Comer, a farmer himself, says that making industrial hemp legal will be his top priority in the 2013 General Assembly. U.S. Sen. Rand Paul, a fellow Republican, is a leading supporter of federal legislation to remove restrictions on hemp cultivation.

"I sincerely believe that industrial hemp can be a viable option for our farmers for many generations to come," Comer said last week as he reconvened an 18-member state hemp commission that hadn't met in a decade.

"I also believe that we can create badly needed jobs in the manufacturing sector with this crop."

Seed suppliers could gain a new market. So could businesses that clean grain or crush seeds to extract their oils. Horse bedding dealers could offer a new product made from hemp. Farm implement dealers could benefit, as well as other agribusinesses, hemp advocates said.

"Hemp is no different than any other crop," said Tom Murphy, a spokesman for the Hemp Industries Association. "Anybody who profits from agriculture now ... could have a small to large hand in this, depending on what types of products or services they are selling."

Louisville-based Caudill Seed Company is eager to get its foot in the door of the hemp market if it is legalized, said Dan Caudill, chief operating officer.

Caudill said the company would work with farmers to grow the hemp and is even considering pressing seeds to produce hemp seed oil.

"I have read that that hemp market in the United States could exceed several hundred million dollars in sales." Caudill said in an email. "So if hemp is legalized, our company, which currently operates three seed processing plants, would work hard with the farmers to capture as much of this market that is supplied by importers with our new domestic sources."

Whitaker isn't ready to embrace hemp as a sure-fire way to diversify his tobacco-reliant business if given the chance.

"No one yet knows the cost of production," he said. "No one seems to know the market and what the demand is, or what the price is. A lot of information is going to have to be gathered before it can be a viable crop."

The biggest obstacle for now is hemp's outlaw status. The crop hasn't been grown in the U.S. since the 1950s as the federal government moved to classify hemp as a controlled substance because it's related to marijuana.

Hemp and marijuana are the same species, cannabis sativa, but are genetically distinct. Hemp has a negligible content of THC, the psychoactive compound that gives marijuana users a high.

Hemp advocates hope the crop gets a pardon, but Comer said Kentucky will get back into hemp production only if the federal government approves.

"If you don't have that, then we're just fighting a losing battle," Whitaker said.

Supporters say there's a ready-made market for hemp. U.S. retail sales of hemp products exceeded $400 million last year, according to industry estimates. The versatile crop can be turned into paper, clothing, food, biofuels, lotions and many other products.

Brian Furnish, who runs a company that seeks export and import markets for tobacco, said hemp has the potential to stake out a role in Kentucky agriculture. One advantage is it could be grown on marginal land unsuitable for grain production, he said.

Furnish, who raises tobacco, corn, wheat, hay and cattle in Harrison County, said he'd plant hemp if given the chance.

"If there's a profit in it, farmers will do it," said Furnish, a member of the state hemp commission. "If there's not a profit in it, they won't grow it. But if the Canadian farmers are growing it, we have the same ability, technologies and equipment they do."

Comer's efforts to take hemp mainstream include trying to persuade the Kentucky Chamber of Commerce to back his legislation.

Kentucky Chamber President David Adkisson said the organization is studying the issue.

Adkisson said his own family has ties to the crop — his mother's family grew hemp during World War II to aid the war effort. At the time, the U.S. government encouraged farmers to grow hemp because other industrial fibers were in short supply.

"It's not a foreign concept to an older generation of Kentuckians," Adkisson said. "I don't have a feel for its economic potential as an agricultural product. I know that there's a compelling case being made, and we're going to take a look at that."