Potential Rude Awakening for Hemp Growers
On December 20, 2018, President Donald Trump signed the 2018 Farm Bill that changed federal policy regarding hemp. This change removed hemp from the Controlled Substance Act and moved regulation and enforcement of the crop from the Drug Enforcement Agency to the U.S. Department of Agriculture. This change in federal policy created a green rush throughout the country where many people thought they would simply get a license to grow the crop and make a lot of money. Everyone from professional farmers to anyone who had land or knew someone with land jumped into the market without first doing the necessary due diligence on the amount of effort and time a hemp crop requires. As a result, many first-time growers, and even some seasoned farmers, have found that growing this crop is not as simple as buying some seeds or clones and putting them in the ground. This crop is very labor intensive and requires a great deal of attention with daily walks through the fields to look for male plants and insects, and to pull weeds.
Harvest season is just around the corner in October, and many farmers are trying to figure out where they will find the laborers to harvest their crop, and where they will dry the plants. The drying component is one of the main areas most growers didn’t think through before they chose to get in the industry. A barn on a farm in most instances will not meet the capacity needs or requirements to dry the crop before it can be sold or sent out for processing. The upside is that this has created a market for individuals with very large warehouses to provide drying services, but at a cost. If the hemp farmers get to the point that they have a dried product ready for market, they may find that the dollar per CBD point offered by processors is not what they were expecting. The reason is that with the large number of new licenses given out around the country to grow hemp, there is a real potential the market will get flooded with product. According to Vote Hemp, which produced the annual Hemp Crop Report in 2019, there were 511,442 acres licensed, compared to just 78,176 acres in 2018. Because of this huge increase, some farmers may decide to hold onto their dried hemp until spring when there should be more demand by processors. Only time will tell what the future holds for the hemp market, but one thing is certain, hemp is here to stay.