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MADISON - Wisconsin hemp farmers can't legally extract and sell CBD oil from their plants, the state Justice Department is warning in a new memo that has would-be growers questioning whether they have a future in the state.

Farmers had until this past Monday to apply for a hemp license from the state Department of Agriculture, Trade and Consumer Protection. The agency has received hundreds of applications. Wisconsin Farm Bureau Federation lobbyist Rob Richard said most of the farmers want to grow hemp so they can extract and sell the oil, which can be used to treat seizures and other health problems.

Possessing and distributing the cannabidiol (CBD) oil is illegal in Wisconsin, but farmers were under the impression the licenses would allow them to produce and sell the oil.

The state Department of Justice shattered that perception on April 27 with a memo re-affirming that possession and distribution is illegal.

Related: Schimel issues guidance on CBD oil, industrial hemp production

Richard said Friday the memo has left farmers stunned. He criticized the timing of the memo.

"The amount of money, planning and timing put into this, and they shut it off (just) before the application deadline," he said. "CBD oil is where the profitability is right now."

In a statement Friday, the DOJ repeated that the oil is illegal in Wisconsin, but said farmers could ship their hemp out-of-state and have the oil extracted at that destination.

The farmers still couldn't sell the oil here.

"We have an obligation to protect public health and safety, and need to provide frontline law enforcement with the knowledge to enforce the law as it is written," Republican Attorney General Brad Schimel said in the statement.

Gov. Scott Walker signed legislation in November that allows farmers to grow hemp as part of a state pilot program. The bill's supporters argued that hemp can be used in a wide variety of products and Wisconsin farmers need another cash crop. The state had received nearly 360 applications and had issued 72 licenses as of Friday.

Related: Wisconsin sees wave of applications for industrial hemp

The legislation did not expressly legalize CBD but Richard said he believes that for all practical purposes it did. He pointed to an email he received in February from the Legislature's attorneys that concluded sale and consumption of the oil would be legal.

The email noted that the bill defines industrial hemp as any part of a hemp plant with a THC content of 0.3 percent or less. THC is the ingredient in marijuana that produces a high. If the oil contains 0.3 percent THC or less, it would therefore be legal, the email said.

The DOJ memo, however, concluded that only doctors, pharmacies and people with a doctor's certification can possess and distribute the oil, and only if it contains no THC. Otherwise possession and distribution remains illegal.

The memo has left farmers holding useless licenses and considering whether they want to grow hemp at all, Richard said.

Abigail Testaberg returned to her hometown of River Falls from the state of Oregon after the bill passed so she could start a hemp-growing operation. She planned to sell CBD because she knows there's a demand for it, but isn't sure she'll proceed.

"For DOJ to wait for weeks, for them to wait until the end of the application process, is a real injustice to just the average Wisconsin citizen looking to enter the hemp market," she said.

The bill's chief Senate author, Republican Patrick Testin, said Friday saying he and his colleagues introduced the bill to give farmers the chance to grow and process hemp into different products, including CBD. He said the state should embrace alternatives to treating pain given the opioid crisis, "not shutting them down with bureaucracy."

"These actions have the potential to damage farmers, curb investment in our state, and hurt people who are using a non-psychoactive product to treat pain and illness," Testin said.

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