Remember the headline on the cover of The Californian's June 2 edition? Placed beside a picture of what was thought to be harmless industrial hemp, it read, "Relax. This is not actually weed growing near Arvin."

Well, some of it might really be weed after all.

A recent lawsuit claims private testing found samples from hemp planted in the Arvin area "significantly exceeded" the federal limit for THC, the high-inducing chemical in marijuana.

Not that there's anything wrong with that legally, thanks to a federal hemp exemption many consider a loophole.

Under the 2014 Farm Bill, businesses registered as research institutions — in this case, a Colorado company operating locally under the name Apothio LLC — are permitted to grow and possess hemp that's "hot," defined as having a THC concentration greater than 0.3 percent.

WHAT THEN?

Registered researchers like Apothio, unlike commercial hemp producers, aren't required to test their crop, let alone destroy it, as long as the intent is to eventually develop a crop whose THC levels is within legal limits.

For Apothio, the question then becomes, what if the hemp really does test hot?

Lawyers who specialize in hemp law say there's no clear answer.

"It is a gray area," said San Francisco hemp attorney Patrick Goggin, co-founder of the California Hemp Council.

He sympathizes with farmers who say it's wasteful to destroy hot crops, as commercial, nonresearch hemp growers would be obligated to do. Maybe it could be mixed in with concrete to make cinder blocks stronger, they say, or used for animal bedding — even animal feed.

BILLION-DOLLAR QUESTION

What may not be done with hot hemp, they emphasize, is allow it to enter the medical or recreational marijuana market. But the lawsuit by Apothio's former business partners alleges that's the company's secret plan.

That's absurd, says Apothio's founder, Trent Jones, a retired chiropractor from Indiana living in Bakersfield. He has contracted local farmers to grow 512 acres of hemp in the Arvin area.

When it's harvested within perhaps two weeks, the crop's total biomass — as much as 8 million pounds of hemp — could be worth a little more than $1 billion, according to earlier estimates shared with Apothio's former business partners. Jones acknowledged it might be worth that much, depending on the hemp's chemical makeup.

If necessary, Jones said, he'll destroy it all.

"If there's any materials that are hot, we'll destroy it. That's exactly what we'll do," he said.

REGULATORY DILEMMA

The situation highlights a quandary for government officials in Kern, where hemp is registered to be grown on nearly 7,000 acres, more than any other county in California.

County officials see the crop as a valuable option for local farmers. They also like that hemp cultivation can ward off pot growers because of the way it cross-pollinates and generally reduces the THC levels of any illegal cannabis growing nearby.

But Agricultural Commissioner Glenn Fankhauser said next year he will not register any hemp growers under the research exemption.

A big reason for his decision is that he has very limited authority to regulate such organizations. He must take their word that they're actually researchers, he said. All he can force them to do is report their groves' geographical coordinates and make them post signs telling people the fields contain industrial hemp.

Fankhauser said he can't even make them test their crop's THC level.

"I don't know about the actual hemp that's in the field now," he said.

MESSY BREAKUP

The lawsuit filed Sept. 9 in Kern County Superior Court alleges the parties' business relationship soured after unauthorized testing was performed on Apothio's hemp near Arvin.

The defendants in the lawsuit are Jones, Apothio, Apothio Bakersfield LLC and Lehr Bros. Inc., which is a local farming company growing 40 acres of hemp and leasing the company a former potato shed on South Derby Street in Arvin, where the hemp was supposed to be processed but which Lehr says was never fully set up.

Even before the results came in, the very idea that tests were done set off Apothio, said Everett Farr, president of the hemp division at Newbridge Global Ventures Inc., a San Francisco-based company with its own technology for extracting hemp oil, which is usually sold as cannabidiol, the popular cure-all known as CBD. Newbridge and its partner, Pennsylvania-based chemical processor AFAB Industrial Services Inc., are the lawsuit's plaintiffs.

The unauthorized removal of hemp got Newbridge locked out of the shed, Farr said.

"Just the fact that I sent the test out," he said. "They locked us out before I even knew what the test (results) were."

Newbridge consultant Lance Dalton said Apothio also tried to get officials with the San Francisco company to promise not to say anything to anyone about the test results. Newbridge declined to make any such agreement, he added.

Jones denies trying to silence his former business partners about the testing but said the parties did have a nondisclosure agreement in place.

The lawsuit says that moment marked the end of the companies' joint-venture partnership. Among other things, the suit seeks the immediate return of equipment Newbridge had leased from others.

TESTING HIGH

Farr said test results came back showing Apothio's harvested hemp was between 4 percent and 5 percent THC, which would make it low-grade pot. He said subsequent tests on samples taken directly from Apothio's contracted hemp fields in August showed a range of THC levels, some below 0.3 percent but most of them about 2 percent.

"I know it's hot," Farr said. "I know that."

Jones broadly denies the lawsuit's claims and said he intends to countersue as soon as this week. Newbridge officials were locked out because they stole intellectual property, he said.

Jones said the hemp was not as high as 4 percent THC, though he said that, as a researcher, "of course" some crop he has worked with has tested above the 0.3 percent legal limit.

He did not disclose the crop's THC content but said it is decreasing. Although THC levels in hemp and cannabis plants in general typically increase over time, Jones said the plants he uses decrease in THC potency as they mature.

Grower Andy C. Stenderup, co-owner of Stenderup Ag Partners, the Bakersfield farming company growing most of Apothio's hemp, said the company has assured him the crop measures lower than 0.3 percent THC. But he doesn't have a testing machine and said he doesn't really know.

"It's his (Jones') crop. I just grew it," Stenderup said.

YEARS OF WORK

Jones said he has researched and developed hemp for the last 5½ years, during which times he says he has sold no product.

In 2015, he was arrested by Los Angeles County sheriff's deputies and accused of illegal cultivation of cannabis. The case was dropped after he was able to show he had a research contract with Rand Corp., the Santa Monica-based think tank, which qualified him as an established agricultural research institution, known as an EARI, as broadly defined by the 2014 Farm Bill.

Apothio's research-institution credentials were bolstered early this year when it entered into an agreement with Cerro Coso Community College in Ridgecrest. The school is part of the Kern Community College District.

Under the contract approved by the KCCD board Feb. 14, Cerro Coso licensed Apothio to farm hemp for educational and research purposes on 21.6 acres of land the college owns in California City. The stated goal of the 25-year agreement is to enable the college's students to learn and practice agricultural industry skills.

Attorneys specializing in hemp law say California's rules for production of the crop are in flux, with bills pending in Sacramento and state ag officials drafting rules for review by the federal government.

In the meantime, some growers appear to be exploiting the federal exemption for EARIs "beyond the intentions for which it was intended," said Goggin, the San Francisco attorney with the Hoban Law Group.

LEGISLATIVE PROPOSAL

One of the most significant aspects of that exemption, said David Kramer, a hemp lawyer working in the Los Angeles law office of Vicente Sederberg LLP, is the ability to bypass the more extensive registration requirements placed on commercial hemp growers.

"That's the key," he said.

A bill pending in the state Legislature proposes to address that exception.

Senate Bill 153, which on Friday was awaiting Gov. Gavin Newsom's signature, would bring the state into line with many of the hemp requirements laid out in the 2018 Farm Bill.

The legislation would require county ag commissioners to report various details about EARIs to the California Department of Food and Agriculture. Among the required information would be contact information for research-related hemp growers and breeders and their registration status.

The bill defines hemp as being no more than 0.3 percent THC and appears to require testing of hemp growers and breeders alike.

NEW PENALTIES

It would also set penalties for EARIs that violate the terms of the legislation.

There would be a kind of probation for first offenders. Anyone found to be in violation three times or more within a span of five years would be ineligible to participate in research work for five years. Anyone found to have violated the bill's provisions for reasons other than negligence would have to be reported to the U.S. or California attorney general's office. The bill is supported by the California Farm Bureau Federation.

Kramer and Goggin agreed it would be a shame if, as part of the Legislature's attempts to clarify the law, hemp that tests above 0.3 percent THC has to be destroyed when it could still be used for purposes other than getting someone high.

Goggin put the situation in the historical context of an industry trying to make a comeback after being outlawed under the Marihuana Tax Act of 1937. Prized breeds refined over many years were lost.

"We're needing to overcome, like, a lot of history and suppression of this crop," he said. "And if in the process of kind of reestablishing this industry there are folks out there that are conducting research and are trying to get some commercial use from it, then I say, my hat's off to you. Just be careful with your THC content."

John Cox can be reached at 661-395-7404. Follow him on Twitter: @TheThirdGraf. Sign up at Bakersfield.com for free newsletters about local business.

(2) comments

Cookcook

I told you how arvin will put themselves on the map!! Besides Mike Tyson needs a new house anyway!!

Ledzepplin4800

Picture of the man standing there with fully flowered cannabis plant is not hemp

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