Thousand Oaks proposes moratorium on hemp industry

Processing plant could be thwarted



An industrial hemp field on Pleasant Valley Road between Oxnard and Camarillo. Hemp is a term used to classify varieties of cannabis that contain 0.3% or less THC content. The industry is booming due to decriminalization efforts and the rising popularity of cannabidiol, or CBD, which has shown promise in treating a variety of ailments.  BECCA WHITNALL/Acorn Newspapers

The Thousand Oaks city attorney’s office is standing in the way of a major hemp producer seeking to open a processing facility in Newbury Park.

In August, Ventura Seed Co. signed a lease for a 35,000-square-foot building at 1415 Lawrence Drive, just down the hill from the new Conejo Spectrum Business Park, home to the likes of Sage Publishing, Atara Biotherapeutics and Amazon.

Ventura Seed is growing industrial hemp—or cannabis with just .03% THC, the psychoactive drug in marijuana—on farms throughout Ventura County and needs a location to turn the raw plant into cannabidiol, or CBD, oil, and a range of other products, company president and co-founder Riki Trowe told the Acorn.

“(Our real estate agent) said he was told by the city (economic development office) that hemp would be no problem as cannabis is already allowed in the city of Thousand Oaks, so we rented the building based on that,” Trowe said. “The building was perfect.”

CBD does not produce the “high” traditionally associated with THC, but is sold to treat a host of ailments in humans and pets. Operating in a legal gray area because hemp was not included in 2016’s Proposition 64, CBD produced from hemp is readily available in retail locations throughout the city and state—and is on the path toward decriminalization.

Assembly Bill 228, which is still working its way through the legislature, would permit CBD in foods, drinks and cosmetics—provided the products are clearly labeled. In addition, manufacturers would need to demonstrate that the hemp used to make their CBD comes from an established “hemp program” that meets all federal requirements; and raw hemp products (such as CBD) would need to undergo lab testing prior to sale to ensure they are free of toxins.

On the federal level, the 2018 Farm Bill removed hemp from a list of controlled substances, making it legal for agricultural uses. The bill did not, however, address hemp’s use in health supplements. As an FDA-approved pharmaceutical ingredient, CBD is illegal in the eyes of the federal government when used in food or cosmetics.

Hitting the pause button

Tuesday night, the council will vote on a proposed 45-day moratorium covering all hemp-related uses. The so-called urgency ordinance would ban the cultivation, processing, drying, storing and manufacturing of industrial hemp anywhere in the city. It would also prohibit any new stores selling CBD products exclusively.

By law, the council can vote to extend the moratorium twice: once for 10 months and 15 days, and then a second time for a year (a total of two years).

According to a written report from Assistant City Attorney Patrick Hehir, the moratorium—which requires approval from four out of five council members—is necessary to allow city staff time to analyze “the degree to which such enterprises could negatively impact other land uses.”

Hehir says because the hemp plant is “similar to cannabis,” it presents the same concerns, including odor and processing safety.

The report does not mention Ventura Seed by name, stating only that the city is starting to see requests from “a number of industrial hemp-related businesses or operations within its jurisdiction.”

Regarding AB 228, Hehir points out the bill has been tabled until the next legislative session starts in January. Until it becomes law, the assistant city attorney says, state laws regarding industrial hemp remain unsettled and unclear.

He does note that the California Department of Food and Agriculture has started to adopt emergency rules related to industrial hemp, so staff expects additional regulations to be “forthcoming.”

“Since the commercial production of hemp is becoming a booming business, staff are concerned that potential negative impacts similar to commercial cannabis activities will be prevalent,” Hehir writes. “Staff members need time to evaluate federal and state laws.”

Fighting back

Legally speaking, Trowe said, Thousand Oaks “doesn’t have a leg to stand on.”

A view of 1415 Lawrence Drive, the space Ventura Seed Co. signed a lease for last month. The company is growing hemp on farms throughout Ventura County and needs a place to process the plant into CBD oil. From Google Maps

“They’re treating it like all of a sudden, somehow they’re going to put all these legislative things for hemp in place like they did for cannabis, but cannabis is still federally scheduled, we’re not,” he said.

Asked about the city’s concerns regarding the safety of the extraction process and odor, Trowe said the company uses noncombustible carbon dioxide (as opposed to ethanol) to extract CBD oil and carbon air filters to reduce smells produced by the hemp plants.

“It’s no different than extracting (sunflower oil), it’s an ag crop,” he said.

Trowe said if the moratorium passes tomorrow, he’ll take his business out of Thousand Oaks and to another Ventura County city “that wants us to be there.” He said his Newbury Park facility would create at least 20 jobs and bring in several million dollars in investment.

“If the (assistant) city attorney has his way, we’re not going to be able to keep that building, we’re going to have to pull out,” Trowe said, adding “this has really put us in a pickle.”

The Maryland native said he’s already looking for a new location: “I don’t have a choice, I have a crop coming out of the ground, I have workers I need to support.”

Regardless of the outcome of the council vote, Ventura Seed Co. will be fine, Trowe said.

“We’re exploding. We’re going to do $100 million in business this year, I’m not really worried about Thousand Oaks, I’m more concerned about the logistical issues that are now created,” he said.

At the Sept. 10 council meeting, advocates for Ventura Seed spoke during public comment, questioning the city’s reasoning for standing in the way of a new, legal, industry.

Paul Castillo of Los Angeles-based Rimon Law, an attorney representing the hemp producer, said industrial hemp is, in the eyes of the law, “an agricultural commodity” and should be treated as such by Thousand Oaks.

“If we were trying to open a strawberry-processing facility I don’t think we’d get the same pushback,” Castillo said.

Because there is nothing in the municipal code outlawing the processing of agricultural commodities in the building Ventura Seed is hoping to occupy, Castillo said there was no reason for the holdup.

“Obviously this type of processing is subject to building code requirements and fire code requirements, things of that nature, but nothing hemp-specific,” he said.

Come Tuesday, that could change. The meeting begins at 6 p.m. inside City Hall, 2100 E. Thousand Oaks Blvd. See the complete agenda item here.