March 15, 2002 -- The U.S. Court of Appeals for the Ninth Circuit March 7, 2002, granted the hemp industry's motion to stay the U.S. Drug Enforcement
Administration's (DEA) "interpretive" rule, which would have banned the sale of hemp-based foods containing trace amounts of
naturally occurring THC (the active ingredient in marijuana) under the Controlled Substances Act (CSA) of 1970.

Shelled hemp seed and
oil are increasingly used in natural food products, such as corn chips, nutrition bars, hummus, nondairy milks, breads and cereals. In the
last few years, the hemp foods industry has grown from less than $1 million a year to over $5 million in retail sales. Montana and North
Dakota have authorized the production of hemp for food and fiber, while 10 other states have passed legislation authorizing research into
hemp as an alternative crop.

"The Court's order effectively prevents DEA from enforcing its 'interpretive rule' until a final ruling by the Court on the validity of DEA's action,"
says Joe Sandler, counsel for the Hemp Industries Association (HIA). "With this stay in effect, all those who sell, import, manufacture,
distribute and retail edible hemp oil and seed, and oil and seed products, can continue those activities secure in the knowledge that such
products remain perfectly lawful."

The DEA published its interpretive rule in the Federal Register on October 9, 2001. The DEA also issued an interim rule exempting hemp
bodycare and fiber products from DEA control.

But hemp-based foods have stayed on the store shelves. On February 7, 2002, one day after the deadline for disposing of hemp foods
expired, the DEA told the Ninth Circuit Court that they would extend the "grace period" for disposing hemp food products 40 days until
March 18, reassuring retailers stocking and selling hemp food products that DEA would not commence enforcement action until the Court
rules on the hemp industry's emergency motion.

The motion was brought jointly by the HIA and several major hemp food companies in the U.S. and Canada. The court is currently hearing
a substantive challenge to the interpretive rule.

In January 2002, Kenex, Ltd., a Canadian agro-firm that has been growing and processing hemp oil, seed and fiber products in Canada
for distribution throughout the United States for the past five years, filed a notice of intent to sue the U.S. government under the North
American Free TradeAgreement (NAFTA). Kenex claims the DEA rule effectively denies the company access to American markets for its
hemp food products.
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"Since the DEA's new rule was announced, our U.S. hemp seed and oil sales have virtually ceased. If the DEA is not stopped, we are
finished. Tallying our current and future losses, we expect to be compensated at least $20 million under NAFTA." says Jean Laprise,
president of Kenex.