Industrial hemp conjures images of rope, seeds for your morning smoothie and the quirky Dr. Bronner's soap, but farmers have discovered an unexpected and potentially lucrative use for the crop: Oil billed as treatment for everything from cancer to autism.

The oil offers a much higher return on investment than converting hemp into more conventional products, growers say.

But while advocates see unlimited potential in industrial hemp, serious challenges remain for the sometimes maligned and often misunderstood plant whose fate is complicated by the national politics of marijuana, its intoxicating cousin.

"The confusion around it has been frustrating," said Eric Steenstra, executive director of the Hemp Industries Association, a national group that advocates for the legalization of the crop. "Hemp and other varieties of cannabis have been tied together since day one in terms of policy."

Still, in Oregon -- one of about a dozen states with active industrial hemp programs -- the industry is taking hold, with 77 people licensed to grow hemp this year compared to 11 last year.

The crop covers an estimated 1,200 acres of farmland -- relatively small when compared to Oregon's overall agriculture industry but notable given the crop's novelty.

Most producers plan to send at least some of their harvest to processors to extract a non-psychoactive component called cannabidiol, or CBD - a sought-after byproduct for baby boomers looking for relief from aches and pains and parents desperate to treat their children's epilepsy.

"The only way that we can compete in the hemp industry right now is high-CBD hemp because that can be monetized at the end of the day," said Jerry Norton, a longtime hemp advocate who is growing the crop on about 100 acres in the Willamette Valley. "There is a big demand for it."

Yet while the state's booming - and regulated - market for marijuana takes shape, the long battle for industrial hemp's legitimacy continues to play out.

Federal legislation two years ago, for instance, cleared the way for limited research and pilot programs run by universities and state agriculture agencies, but the new law is vague on permission for general commercial production. Federal restrictions also have made it difficult for producers to get seeds legally.

And legal experts say shipping oil made from hemp falls in a legal gray area. That's because the U.S. Drug Enforcement Administration generally views industrial hemp the same way it does marijuana: as a controlled substance.

Hemp and marijuana are different types of the same species, Cannabis sativa. Hemp has one key distinction: It lacks marijuana's most coveted component: THC, or tetrahydrocannabinol.

In hemp's case, the gene that fires up marijuana's high THC production is essentially turned off. So while hemp's stalks provide fiber for textiles and its nutty seeds can be added to yogurt, the plant is a lousy choice for people seeking marijuana's high.

By law, hemp may contain no more than 0.3 percent THC. "You could smoke the whole field," said Norton, surveying his leafy crop in Marion County. "You're not going to get high."

The U.S. Department of Agriculture, in consultation with the U.S. Drug Enforcement Administration and the Food and Drug Administration, issued a statement this summer saying commercial hemp growers in states with pilot research programs would be protected from prosecution.

But the federal government also spelled out limits -- including prohibiting sending hemp to states that don't allow its production and marketing -- that could pose a challenge to hemp businesses planning to export products like CBD oil.

Amy Margolis, a Portland lawyer who represents marijuana business owners, said she would urge anyone selling hemp out of state to proceed "very cautiously."

"Until there is clarity," she said, "I would not be comfortable sanctioning a commercial business that sells interstate hemp products."

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Nationally, industrial hemp production is on the rise.

Last year, the crop was legal in nine states; today, 13 allow it. About 9,000 acres are in production across the country, about twice as much as last year, according to the Hemp Industries Association.

The renewed interest in hemp comes as CBD extracts gain popularity even in places where medical marijuana isn't legal. Sixteen states allow people to use CBD oil to treat conditions such as cancer and epilepsy, according to ProCon.org, a nonpartisan group that researches controversial topics.

Earlier this year, G.W. Pharma announced that an experimental drug made with pure CBD was effective in reducing seizures related to a debilitating form of epilepsy. The Doernbecher Childhood Epilepsy Program at OHSU is involved in several clinical trials on pharmaceutical-grade CBD produced by drugmaker Insys.

In Kentucky, hemp was reintroduced as one way to try to replace the state's once-thriving tobacco crop. State agriculture officials originally envisioned an industry that would churn out fiber for textiles and car parts and grain for livestock, but CBD oil is the most valuable product to emerge from the nascent industry, officials said.

An estimated 60 percent of the acreage dedicated to hemp in Kentucky is headed to the CBD oil market, said Brent Burchett, an official with the Kentucky Department of Agriculture.

The oil can be found in bottles and vaporizer pens at gas stations and health food stores across the state, he said.

Though enthusiasm for the crop is strong, agriculture officials remind producers that federal restrictions make it a risky enterprise.

"Don't bet the farm on hemp," Burchett said. "It's not there yet. If there are folks who want to take risks, they are encouraged to do that. But there should be no expectations on making money. This is an early industry."

Oregon tried to start its hemp program last year, but producers balked at the 2009 state law's requirements. The crop had to be grown on no less than 2 1/2 acres. Producers had to plant seeds directly in the ground instead of using greenhouses, a common growing technique.

"It wasn't very workable," said Lindsay Eng, director of market access and certification for the Oregon Department of Agriculture.

The Legislature last year passed a law that removed those requirements and cleared the way for this year's crop. But extensive rule-making and other policy work to address problems raised by hemp producers left an unexpected $170,000 hole in the program's budget, state officials said.

The program is supposed to be paid for with licensing fees from hemp producers and processors and initially received $65,000 from the state's general fund, but it wasn't enough, Eng said.

"With all of the confusion last year it's pretty far in the red," she said.

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For Norton, Oregon's hemp program is a cheaper way of entering the state's recreational marijuana market than growing cannabis.

Recreational cannabis growers face annual state licensing fees up to $5,750 a year, detailed security rules and close oversight by the Oregon Liquor Control Commission, which monitors marijuana from seed to sale. Meanwhile, Norton pays $500 a year for a license to grow hemp. He has no security requirements. Regulators don't check up on his operation to see how much he's growing. Just before harvest he'll have to have his crop tested to make sure it falls below the required THC limit for hemp.

"I can grow as much as I want," said Norton, who spent $300,000 on four pounds of hemp seeds from suppliers he declined to identify due to concerns over federal law enforcement.

The liquor commission will allow products made from industrial hemp to be sold alongside cannabis in recreational stores as long as it's undergone the same tests for pesticides and potency required for recreational pot and it meets the state's label requirements.

But not all Oregon marijuana retailers welcome the products.

Don Morse, owner of the Human Collective in Southwest Portland, said oils made from "a true marijuana plant" are superior to hemp. Marijuana products high in CBD typically contain THC as well.

Morse said hemp products should be labeled so consumers know what they're getting.

"Dispensaries look at it pretty much as snake oil," Morse said. "These guys are coming in with a product that is not accurate and they are not labeling it."

But Mowgli Holmes, a biologist whose Portland company researches cannabis genetics, said setting apart oil made from industrial hemp isn't necessary.

"Industrial hemp is just cannabis under 0.3 percent THC," he said. "There is no reason why it should be labeled (as hemp). What matters is how much THC and CBD are in there."

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This year, Oregon State University set aside land to study the crop, hoping scientists could begin to answer questions like the best time to plant and which weeds and pests might pose a problem.

Months later, those five acres in Benton County sit empty.

University scientists are still trying to find a seed supplier, said Jay Noller, head of the crop and soil science department in the university's College of Agricultural Sciences.

The federal government, he said, allows seeds to come only from international sources. And it's been hard to find a willing supplier.

"We aren't able to bring in plant material from other states with industrial hemp programs," he said. "We have been told that is unlawful."

For now, Noller said, the university's hemp program is stalled.

"We are not able to do anything other than keep the field clean and clear of weeds and plowing it until we get seed and then we will proceed," he said.

-- Noelle Crombie

503-276-7184; @noellecrombie