hill country observerThe independent newspaper of eastern New York, southwestern Vermont and the Berkshires

 

News & Issues September 2019

 

A new era for hemp

With federal ban lifted, area farms start growing a long-forbidden crop

 

 

Joan K. Lentini photo

 

Seth Jacobs, left, and Martha Johnson, third from left, stand with their sons Adin and Kalon in a field of hemp at Slack Hollow Farm in Argyle, N.Y. The farm began growing the crop this year for the CBD oil it produces. Joan K. Lentini photo

 

By EVAN LAWRENCE
Contributing writer

ARGYLE, N.Y.


Seth Jacobs and Martha Johnson have been growing vegetables organically for more than 30 years, but this year they’ve made a big shift in their business model.


Although their Slack Hollow Farm in Argyle still raises organic produce, three acres of the small-scale farm are now devoted to growing hemp.


“This is the most of any one crop that we’ve ever grown,” Jacobs said.
About two miles to the east and across a town line, Richard and Kelly Taylor, who own the R.S. Taylor & Sons Brewery in Hebron, also decided to get into the hemp business this year. The Taylors planted their first crop on four acres through a new business, Land Craft Wellness, that’s separate from their brewery.


The two Washington County couples are in the vanguard of a new agricultural movement that’s taken off since Congress acted last year to end decades-old restrictions on the large-scale cultivation of hemp, the non-intoxicating variant of marijuana.


Just as kale, cauliflower and kohlrabi are all strains of the same species bred for different purposes, hemp is botanically the same as marijuana. Hemp naturally contains small quantities of THC, the chemical that gives marijuana users a high.


But plant breeders have selected marijuana over the last 50 years for high levels of THC, achieving up to 25 percent in some popular strains. Under federal law, hemp can have no more than 0.3 percent THC by dry weight -- too little to give anyone a high.


Boosters of hemp have pushed for years to legalize its production as a cash crop, and Congress finally granted their wish in last year’s farm bill by removing hemp from the government’s list of “Schedule 1” controlled substances – a list that still includes marijuana as well as drugs such as heroin and LSD.


Now farmers and processors are rushing to meet the booming demand for hemp products, most notably cannabidiol or CBD oil.


At the same time, state agriculture departments are scrambling to put together regulatory structures, conduct research and development, certify processing facilities and develop markets for a crop that almost no one in the United States has grown legally in more than 80 years.
“It’s the Wild West as the industry tries to get its footing,” said Steve Ammerman, a spokesman for the Farm Bureau of New York. “There’s still a lot of research to be done on production and safety.”

 

Feeding demand for CBD
One of the first crops to be domesticated, hemp was grown for thousands of years before it was banned. Historically grown for its fiber and edible seeds, it also can be processed for oil, paper, building materials, bioplastics, fuel and synthetics. It has an estimated 25,000 uses.


Advocates say hemp can replace anything made of cotton, cellulose, petroleum or soybeans, as well as sequestering carbon dioxide and helping to rebuild soil.


But it’s the strong demand for CBD oil that’s prompting farmers like Jacobs and Johnson and the Taylors to get into the hemp business.


Clinical research on CBD is lacking, in part because it’s derived from a plant that’s been banned for decades. But enthusiasts claim it can help a huge array of medical issues, from chronic pain to depression and anxiety, osteoporosis, and glaucoma. More and more consumers are buying CBD products for help with these and other conditions.


“There’s an incredible, mushrooming demand being driven by the people using it,” Jacobs said of CBD. “The body welcomes this molecule wherever you put it.”


Hemp’s growing requirements are similar to those of corn. It was widely cultivated in the United States -- Kentucky was a leading producer -- until hysteria over marijuana erupted in the 1930s.
Because it was almost impossible for law enforcement to differentiate between hemp and marijuana, U.S. regulators took the drastic step of banning hemp completely in 1937. The ban was supported by the cotton and lumber industries, which wanted to eliminate a competitor. (Production of hemp was revived briefly during World War II to provide materials for the war effort, but then was shut down again.)


Hemp cultivation has continued elsewhere, including in Canada. Although growing hemp was illegal in the United States until the past year, hemp products were not. The United States ranks as the world’s largest importer of hemp products, consuming about $700 million annually in fabrics, seed and oil.

A closeup of a hemp plant at Slack Hollow Farm in Argyle, N.Y. photo by Joan K. Lentini

A closeup of a hemp plant at Slack Hollow Farm in Argyle, N.Y. photo by Joan K. Lentini

 

Two farms get started
At Slack Hollow Farm, greenhouse-started CBD plants go into the ground in spring, “like tomatoes,” Jacobs said. “It’s a warm-weather crop.”


CBD occurs throughout the plant but is concentrated in the flowers, which mature in September and October. Jacobs will start harvesting this month and will ship the dried crop to a certified organic processor on Long Island.


He said he plans to market the farm’s own line of high-quality CBD products.
“I’m not going into the commodity business,” Jacobs said. “We all know what will happen with that. We can’t compete with cheap imports from China.”


Jacobs said hemp cultivation needs no equipment beyond what he already has for his vegetables. Although the plants are hardy and vigorous, they aren’t foolproof to grow. People who have no farming experience shouldn’t expect to make a profit in their first year, he warned.
In Hebron, the Taylors planted four of their 50 acres with 6,500 CBD hemp plants, spaced five feet apart. (Hemp for fiber and seed is planted more closely, like corn or wheat.) The dark green, conical plants look like Christmas trees, Kelly Taylor said.


“It was a great way to get some of our land back into production,” she said.
The Taylors plan to sell full-spectrum CBD oil and hope to put the oil and possibly THC in their beer, if and when that becomes legal.


“We have hemp and farm brewery licenses,” Taylor said. “That’s a unique combination.”
The plants seem unattractive to most pests. Deer and Japanese beetles leave the plants alone, but “there’s a lot of hand field work” weeding and mowing between the plants, Kelly Taylor said.
The Taylors are working with a consultant to manage the crop and will probably have it processed at a facility in Hoosick run by HempChain Farms of Berlin.


Kelly Taylor is charging $100 for a 1,200-milligram bottle of CBD oil, a price she called “middle of the road.”


“People who are used to buying CBD oil don’t object to the price,” she said.
The Taylors’ processor will take the plants’ leaves and flowers, Rich Taylor said. The remaining stalks could be become fiber or animal bedding, but Taylor said no one has expressed interest in them.


“It could be useful, but right now no one knows what to do with it,” he said, adding that he’ll probably plow the stalks back into the soil.


New York doesn’t allow CBD to be added to food or beverages made in the state, although such products from other states can be sold in New York. A bill recently passed by both houses of the Legislature would change that, permitting the in-state manufacture of food products containing CBD, but Gov. Andrew Cuomo had not signed the measure as of late August.

 

States set own rules
The move toward legalization of hemp has unfolded over the past five years, slowly at first, as attitudes toward marijuana eased and farmers and regulators began to reconsider what hemp could contribute to U.S. agriculture.


The federal farm bill of 2014 allowed very limited growing of hemp crops as part of state research products. Massachusetts and Vermont lifted their state bans on hemp cultivation in 2016 and 2018 respectively, when they legalized recreational marijuana.


New York, where recreational marijuana remains prohibited, started an agricultural research program for industrial hemp in 2015.


By removing hemp from the federal government’s list of controlled substances, last year’s farm bill allowed states to set their own rules, under U.S. Department of Agriculture guidance, for growing hemp -- as long as THC levels in the plants remain below 0.3 percent.


The change in federal law made it possible for hemp growers to get crop insurance -- and for banks to extend credit for the crop.


Hemp still has many challenges. There’s a lack of basic research into plant characteristics and growing requirements. Growers are barred from applying pesticides, because no pesticides have been tested and approved. Seed comes from Canada, because there are no domestic sources.
Processing facilities are scarce, and markets are in the early stages of development. Growers have to monitor THC levels to make sure they stay within legal limits, or their crops could be destroyed.

 

New York’s licensing process
Hemp growers in New York have to apply to the state’s industrial hemp agricultural research pilot program, which is run by Cornell University and the State University of New York at Morrisville. There’s a $500 application fee for the three-year authorization. The state also authorizes CBD processors and processors of other hemp products.


Kirstan Conley, a spokeswoman for the state Department of Agriculture and Markets, said the number of hemp growers and processors in New York more than doubled this year, for a total of 490 farmers and 118 processors. The number of acres of authorized hemp production in the state shot up from 3,500 in 2018 to 19,932 this year, and “the numbers are continually rising” as new applications come in, she said.


Ammerman, of the state Farm Bureau, said farmers across the state are showing new interest in growing hemp, particularly in the Southern Tier and central New York regions around Morrisville, Binghamton and Cornell University.


“There seems to be a growing interest in what the crop can offer in terms of diversification,” Ammerman said. “Hemp can be used in many ways, with many marketing opportunities.”
SUNY Morrisville and Cornell are researching varieties suited to New York growing conditions, educating farmers about the crop, and helping farmers determine whether hemp fits into their business plan, Ammerman said. Dairy farmers, organic vegetable farmers, and other crop farmers are assessing the potential of hemp as a way to “spread the risk around,” he said.
State regulations have not yet caught up with hemp, and the industry “needs a regulatory framework to provide some certainty,” Ammerman said.


“It’s really a fledgling industry in the U.S.,” he added. “The prediction is for great growth.”

 

Mass. tax exemptions at issue
Under hemp-growing regulations Massachusetts set up last year, growers and processors pay $100 to apply for a license that costs $300 per year. The annual fee for a combined grower-processor license is $500.


As of August, the Massachusetts Department of Agricultural Resources had issued 104 grower’s licenses and 74 processor’s licenses. The numbers include dual licenses. Hampshire County, in the Connecticut River Valley, has the most licensed growers. The greatest area under cultivation is in Franklin County, just to the north.


One challenge for growers is that the state allows a lower tax rate for land that’s in agriculture, and also has a farmland preservation program that offers financial benefits for keeping land in agriculture, but hemp isn’t on the list of crops that qualify for these benefits. So farmers who have land in either program risk losing their agricultural status if they switch from other crops to growing and processing hemp.


State legislators including Sen. Adam Hinds, D-Pittsfield, Rep. William “Smitty” Pignatelli, D-Lenox, and Rep. Tricia Farley-Bouvier, D-Pittsfield, have called for adding add hemp to the list of qualifying crops. The Senate approved a measure this year making the change and included it in a supplemental budget bill, but the House version left it out.

 

State grading for CBD products?
The registration fee for Vermont hemp farmers is $25, with no limit on acreage. To date the state has registered 900 growers with access to about 7,800 acres, as well as 190 processors. Last year, the state reported having 3,290 acres in hemp production.


“We continue to register people,” said Stephanie Smith, the chief policy enforcement officer with the Vermont Agency of Agriculture, Food and Markets. “They’re all over the state.”
About 90 percent of grower applicants said they were interested in CBD oil production, Smith said. About 14 percent listed fiber and 13 percent planned to grow hemp for seeds. (The figures add up to more than 100 percent because some growers listed more than one interest.)
Apart from a requirement to register with the state, Vermont’s hemp industry is mostly unregulated. Earlier this year, the agriculture agency proposed rules that would, among other things, establish a grading system for CBD products, similar to the system for maple syrup.
During a public comment period on the proposal, “we heard from growers and producers that they weren’t interested,” Smith said.


But she said the agency is still pursuing “a grading or classification system” that would allow qualifying hemp products to display a “made in Vermont” emblem.


Researchers at the University of Vermont are looking into hemp varieties and growing methods that will succeed in the state, as well as uses for hemp beyond CBD.


“More farmers are integrating the rest of the plant into their plans,” Smith said. That could include using hemp for animal bedding, fiber, building materials or fuel, she said.


Rather than replacing conventional crops, Smith predicted hemp “will be an addition to what farmers grow now.”


“It’s an opportunity to diversify,” she said.
Ammerman, of the New York Farm Bureau, cautioned that it’s too soon to say how much, or even whether, hemp production might offset other pressures on the region’s agricultural economy.
“Farmers are always interested to see what’s new and how to improve what they’re doing,” he said. “Hemp could be it. Time will tell if it pans out.”