Steamboat hemp mistaken for illegal marijuana: confusion over new industry disrupts farmers, business owners

Officials at a local shipping company halted a shipment of hemp, mistaking it for illegal marijuana. The incident reveals larger confusion over the hemp industry, which recently became legal after Congress passed the 2018 Farm Bill in December.
Derek Maiolo

STEAMBOAT SPRINGS — On Tuesday, the local owner of a budding hemp business got a call no startup wants to receive: A shipment of products destined for Kentucky had been stopped in Steamboat under suspicion it contained illegal marijuana.

Nathan Brough, who started the Mountain Strong Hemp Co. in January with an official license to grow and distribute hemp through the U.S. Department of Agriculture, could not believe what he was hearing.

“We’ve done everything according to the books,” he said. “For our shipping to get shut down — that hurts.”

According to Brough, the problem started when a pilot for a private shipping company noticed a package of the company’s hemp on her plane.

“She saw what it was and did not feel comfortable taking the package with her,” he said.

The Steamboat Springs Police Department was called to investigate what employees at the shipping company described as an illegal attempt to ship marijuana across state lines. According to law enforcement, officers quickly determined the hemp was legal and gave the go-ahead for shipment. 

Jerry Stabile, a commander with the Steamboat Police Department, said this is the first case in town he can remember that involved hemp being mistaken for marijuana.

But Brough’s hemp business is not the first to encounter such a problem.

In February, an Aurora-based hemp company sued the Idaho State Police after one of its truck drivers was arrested, charged with a felony, and released on a $100,000 bond on suspicion of attempting to smuggle marijuana into the state. Tests concluded the driver was transporting legal hemp.

As Brough explained, much of the confusion stems from the newness of the U.S. hemp industry, which became federally legal after Congress passed the 2018 Farm Bill in December.

Supporters see the industry as a way to boost job growth and spark revenue amid a growing popularity for CBD, a nonpsychoactive product from hemp — not to be confused with THC, the cannabinoid found in marijuana that gets people high. By law, legal hemp must contain less than 0.3% THC. 

In a recent report, cannabis researchers BDS Analytics and Arcview Market Research project that the nationwide sales of CBD could surpass $20 billion by 2024. 

Despite the recent hiccups, Brough said business has been good. His company predominantly raises clones to distribute to hemp farmers throughout the country. Mountain Strong currently sells to farmers in about 15 states, according to Brough. Because hemp is a relatively new product for growers, his company focuses on experimenting with different strains to determine which are better for human consumption, and which serve a more industrial purpose, such as use in fabric.  

As of May, the company also offers a small line of CBD-infused products, ranging from lotions to dog treats. 

“We’re kind of like a small-batch bourbon,” he said of the company’s various goods. 

As demand grows, Brough finds it frustrating to encounter such a fundamental problem as not being able to transport his products. Even when Tuesday’s shipment arrived in Kentucky, after significant delays, he said drug-sniffing dogs flagged the package and sparked another criminal investigation. He still is in the process of getting a refund for hundreds of dollars he lost in the kerfuffle. 

Thus far, field tests for hemp have proved unsuccessful in distinguishing between hemp and marijuana, as the incidents in Idaho and Kentucky show. The two plants smell and look similar, which has created confusion in other areas.

Matson Tew, who handles sales and marketing for Mountain Strong, has noticed an issue running ads on social media. When he tried to publish several posts about the company and its products through Facebook, the social media company flagged them for inappropriate content — presumably for trying to sell marijuana online — and took the ads down. 

It took several days and persistent messaging to get the posts back online, according to Tew. 

“Why do we feel like we’re bootleggers when it’s totally legal?” he said.

In an effort to reduce confusion over shipments, officials from the U.S. Postal Service disseminated an advisory educating employees on the acceptable criteria for legal hemp and CBD products. According to the advisory, such materials must contain less than 0.3% THC, and industrial hemp producers must have a license through the U.S. Department of Agriculture.

Brough hopes time and education will bring more clarity to the hemp industry. He enjoys running the business and feels like a pioneer treading into uncharted territory.

“It is exciting, but it does cause me some migraines here and there,” he said.

To reach Derek Maiolo, call 970-871-4247, email or follow him on Twitter @derek_maiolo.


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