Unforeseens Aside, US Hemp Production to Double This Year
BY DR. LLOYD COVENS
According to several industry experts, a major expansion for US hemp farming has arrived for Spring planting season—but concerns remain among the AG community over final rules under the 2018 Farm Bill—as well as a myriad of crop outcome issues. For both returning farmers—and new hemp farmers in Wisconsin, So. Carolina, Pennsylvania, New Mexico, Kansas, Michigan and maybe, California—unresolved issues on crop insurance, banking/loan challenges and seed reliability all have brought great uncertainty for the hemp sector.
Seeds of an Empire
The genetics powerhouse led by the Crawford brothers’ have spent four years perfecting some high-CBD strains which have constantly sold out from their CBD Seeds greenhouses in southern Oregon. “We expected the market to grow by 3x this year, and increased our production by 6x,” said Dr. Seth Crawford, who now estimates nationwide growth over 2018 is a factor of 10-11 times.
“This has been true in many other states with relatively new hemp programs as well. The biggest impediment to farmers is acquiring reliable, quality feminized seed,” said Crawford. His hemp strains like Lifter, Elektra and Sour Space Candy are always selling out, despite their cost of $1 per seed.
Growing Like a Weed
At this time, more than 95% of the hemp growing attention is aimed at CBD growing, according to hemp expert and farmer Veronica Carpio, of Grow Hemp Colorado. Carpio was hopeful that the post Farm Bill environment would also hasten the rollout of US-based industrial hemp for fiber (ie., hempcrete, plastics, textiles) and fully-FDA approved hemp seed (hemp cake) for nutritional non-CBD hemp grain and seed.
Carpio, who produced her own certified VC Star hemp seed, is afraid that many farmers may be feeling pressured by “genetics and clone” companies who see 2019 as a watershed for growth. “These farmers are trying to survive and feed their families,” Carpio adds.
“This hemp industry has grown organically,” says Portland hemp veteran Jon Thomas of JMT Enterprises, but now “the government is trying to step in and set rules for a crop they don’t fully understand.” As overgrowth of cannabis in Oregon explodes (reports say the state has more than 6.5million pounds of un-sold MJ), Thomas sees hundreds of former marijuana growers moving into the hemp sector.
Confusion over CBD status at the Food and Drug Administration has left many hemp hopefuls confused on not allowing CBD in foods, beverages and cosmetics. “We have a bad situation where the Farm Bill has called hemp-CBD totally legal,” notes Thomas, but the FDA has thrown cold-water on full implementation for a myriad of consumer products for human and animal consumption, and pain and skincare topicals.
With such crossed messages, business planners and investors cannot reliably get a handle on the expected per-pound price for high-quality CBD biomass this fall. Pricing estimates from the Fall, 2018 harvest generally reported sales of $27 to $33 per pound, and certain higher sales reports of $45-$50 pound for early 2019. Compared to break-even for growing cotton, corn or soybeans—farmers can look at the potential for CBD-hemp at 1000 to 2000 plants (yielding 1 pound each) at easily generating gross revenues of $35,000 to $85,000 per acre.
But the impact of unknown demand conditions—plus the inability to predict the growth of new hemp processing centers—may shake up eventual sales outcomes this fall. One estimate sees the buyers moving to buying farmer product based on the percentage of CBD, with pricing running $2 to $4 for each percent. Banking and credit union support for hemp depositors remain steady, but there is still no official loan help from the U.S. Farm Credit Administration.
Digipath Labs of Las Vegas is now introducing a new portable cannabis testing module which can tell growers the level of THC in their plants at all stages. Digipath chief scientist Dr. Cindy Orser says bluntly, all that law enforcement wants to know, is “can they reliably test this plant, and find out who has exceeded the strict .03 THC limit.” But issues around testing (most state’s require growers to test their grow in late summer) have confounded the hemp experts. Some states want to test the upper or flower parts of the plant, while others have agreed to combine all parts of a CBD/hemp plant to “average” out the overall THC.
Carpio notes that the USDA must still resolve if the THC limit is based upon just “delta-9” percentages, or the total amount of THC, THCa, THCv and other trace THC elements found in the plant. A new statewide California requirement to submit a recent(30-day) certificate-of-analysis for seed sellers, may again delay widespread hemp farming to get started there.
The Coming CBD Craze
American farmers find themselves in a vicious downturn thanks to the combination of impacts from the Trade War with China (greatly reducing their demand for soybeans), low prices for crops like cotton and corn, and flooding and bad weather delaying planting this Spring. So much better hemp pricing per acre, newly-legal status under the 2018 Farm Bill, and relentless media reporting on the “CBD health craze” has painted a positive big picture for hemp.
But the details in losing some, or all, of a new major commitment to hemp still has led to caution in farmers, despite the appeal. Thomas and Carpio both agree that many farm plans to plant 80 or 100 acres, now, in many cases, have been reduced to a small 2-3-acre plan to get comfortable with the plant. Washington industry advocates think 2019 will net out at total U.S. hemp plantings at 150,000 to 165,000 acres— about twice 2018’s acreage.
–Based in Denver, Dr. Lloyd Covens, DBA is a seasoned cannabis industry journalist and the publisher of West420 NewsWeekly. Writing his doctorate on diffusion of innovations, Covens has been an expert journalist/researcher for 20 years chronicling new technology, global television and renewable energy advancements. He has reported on developments in the cannabis and hemp industry with weekly reports since 2014 covering the western U.S. for legal medical cannabis, recreational sales and hemp production. Covens is also the creator of the annual CO Hemp CBD conference held in Pueblo, Colorado.
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