Laura Murphy, of Bozeman, was the first to apply for the two-year license since the state Legislature approved hemp's commercial cultivation in 2001.
Federal law prohibits such activity, but the license issued by the Montana Agriculture Department on Oct. 14 could challenge whether the U.S. Drug Enforcement Administration is willing to override the state.
Hemp is similar to illegal marijuana but without the mind-altering ingredient of the drug. It is grown in parts of Canada and Europe and has a range of uses, from fibers for clothing to a source of biofuels.
Murphy called the application process "pretty easy."
"I went in and had a criminal history check and fingerprints and said I had land to grow it on," she said. "They didn't have an official license for me; it's just a letter."
She said she intends to lease 160 acres of unused ranch land near Ennis and is trying to arrange contracts with buyers.
Murphy, 42, said she is a former dog groomer who works as the office manager for a Bozeman medical marijuana business. She said there would be a separation between that business, which is run by her fiance, and the planned hemp growing operation.
The Obama administration last week loosened guidelines on federal prosecution of medical marijuana operations, which grow potent forms of the plant used to treat Parkinson's disease, chronic pain, glaucoma and other ailments.
The Justice Department told federal prosecutors that targeting people who use or provide medical marijuana in compliance with state laws was not a good use of their time.
Montana applied to the DEA in 2002 for recognition of the state's hemp growing law. The request was denied, but Montana Agriculture Department attorney Cort Jensen said it could be reconsidered now that a license has gone out.
"Obviously hemp is a little different than ordinary marijuana, but they have declined in the past," he said. In the meantime, he added: "We will administer the state law."
In her license, Murphy was warned by Jensen that "growing hemp is still illegal."
"You still need to get permission from the Drug Enforcement Agency in order to grow it without facing the possibility of federal charges or property confiscation," he wrote.
DEA spokesman Mike Turner said federal drug agents will be watching to see if Murphy moves ahead without the federal permit something she said she has no intention to seek.
"We try to concentrate our investigations on major criminal organizations that traffic drugs. That's our priority," Turner said. "We can't speculate about what's going to happen until somebody actually does something."
He said some hemp operations had received clearance to grow after installing fencing and security to prevent public access, but he could not say how many permits have been issued.
Jensen also said that if she wished to use pesticides, Murphy would have to make arrangements through the Agriculture Department since none is currently approved for hemp.
The advocacy group Vote Hemp lists Montana as one of nine states that have removed barriers to hemp production or research.
Angela Goodhope with the Montana Hemp Council said the license given to Murphy marks "a big deal as far as state's rights go."
"The wheels are turning to allow our farmers to have another good alternative rotational crop," Goodhope said.