NAICC: Risk Is Most Important Factor In Growing Hemp

The Hemp Farmers Association (HFA) aims to “educate, support and help protect” hemp growers. ( Giles Shell )

The 2018 farm bill, more formally known as the Agriculture Improvement Act, signed by President Trump this past December included a measure that legalizes the production and marketing of industrial or commercial hemp (Cannabis sativa L.). Removing hemp from the controlled substances list takes the pressure off at the state level for the possibility of growers to turn a once-illegal substance into a potentially profitable cash crop.

Industrial hemp is different from marijuana in that it must contain less than 0.3% of delta-9-tetrahydrocannabinol (THC), the psychoactive compound that gives the user a high. Industrial hemp has many uses as fiber for clothing and rope; seed; oil from seed; and full-spectrum oil, which is harvested from the buds or flowers.

In 2018, 78,176 U.S. acres of hemp were grown in 24 states that allowed the cultivation of hemp; that was triple the prior year’s 25,713 acres. According to VoteHemp.com, in 2018, Montana, 22,000 acres; Colorado, 21,578 acres; and Oregon, 7,808 acres, led the way with the most acres of hemp grown. Illinois held the last spot with just one-tenth of an acre of hemp grown in 2018. From the reports I’ve heard, growing hemp has been a mixed bag so far. A crop consultant in North Dakota reported his grower was having trouble finding a market for the seed he produced because of an influx of seed to the market. The value of the seed has dropped between 60% and 70%, as the current market for seed has not grown with the increase in production. 

The most important factor in growing hemp is risk. A crop consultant from North Carolina grew a hemp crop with the intention of selling the buds, which yield oil that can be harvested as full-spectrum oil, but had a challenging start with the hurricanes and excessive rains.

Between 85% and 90% of growers in North Carolina that grew hemp for full-spectrum oil have not been paid for their 2018 crop. This could be partially due to 70% of the North Carolina crop having picked up a contaminant, most likely a pesticide. Because the oil cannot contain any contaminant, the full-spectrum oil must be taken down to isolates and have the contaminant removed. Then, the different isolates can be sold. Unfortunately, the isolates do not have as large of a market as the full-spectrum oil. That makes the oil less valuable and marketable.

The most controversial product derived from hemp is cannabidiol (CBD oil), an isolate from full-spectrum oil, which is regulated by the Food and Drug Administration (FDA).

FDA commissioner Scott Gottlieb, a medical doctor, said: “Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act, and section 351 of the Public Health Service Act. In doing so, Congress recognized the agency’s public health role with respect to all the products it regulates. This allows the FDA to continue enforcing the law to protect patients and the public while also providing potential regulatory pathways for products containing cannabis, and cannabis-derived compounds.”

Because CBD oil does contain trace amounts of THC, marketing it is difficult as manufacturers find ways around the regulations and still preserve the value of the CBD oil.

I am sure there are success stories; however, as with any industry in its infancy, it will take failures for the pioneers to pave the way for the future. So far, the hemp industry has high risks with unknown rewards. With our farm economy, we need markets to open so hemp gives farmers another option for success.

The National Alliance of Independent Crop Consultants (NAICC) is the national society of agriculture professionals who provide research and advisory services to clients for a fee. Matt Eich is the current NAICC president and a consultant with Centrol Crop Consulting in Volga, S.D. For more, go to www.NAICC.org. 

 

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