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NEWS FROM THE BULLETIN BOARD


.. from Pennsylvania

New hemp rules no good for farmers - commonwealth more interested in production?

Hemp is being pushed as one of Pennsylvania’s major cash crops under new regulations published last week by the state Department of Agriculture. At the same time, those new regulations could inadvertently crush small farmers who still are sitting on their 2019 hemp harvest. Pioneering hemp farmers, who grew the crop under the state’s experimental pilot program, may find that their cannabis plants — now stored in barns and warehouses — may be too laden with the intoxicating substance THC to be approved for sale, legal experts said. Several thousands of acres of hemp were planted in Pennsylvania last year. Under the state’s new standards and requirements, testing will be increased significantly for marijuana’s non-intoxicating cousin. The act, which is effective immediately, “represents a fundamental change in how the hemp industry is regulated in Pennsylvania,” said Bill Roark, an attorney who is cochair of the Pennsylvania Bar Association’s Medical Marijuana and Hemp Law Committee.

According to the Department of Agriculture, hemp can be processed into thousands of products — including food, textiles, construction materials, oils, and the fashionable dietary supplement CBD. Analysts project that by 2025, hemp could become a $25 billion industry.

Farmers are looking at hemp as a lucrative crop. Where an acre of corn might generate $300 to $500 in profit, and tobacco $1,000 to $3,000, they expect some hemp varieties — those grown for CBD extraction — to fetch $10,000 or more. Applications to grow hemp and instructions were posted last week on the state Department of Agriculture’s website. By definition industrial hemp may contain only 0.3 percent THC, the intoxicating compound in marijuana. Smokable medical marijuana flower — when it’s available — typically contains between 7% and 35% THC.

... from Oregon.

Supply up, hemp prices down.

It was only a matter of time before the surging hemp industry hit a roadblock. It appears that time is now. Due to an oversaturated market, the price of hemp has dropped dramatically. PanXChange, a benchmark pricing service, is reporting the price of hemp biomass has dropped 75% from $40/lb last July to $10/lb most recently. Yon Olsen, project manager at Cascadia Crest, a hemp company in Bend, said Tuesday the big drop in prices is not a surprise to him. “Anyone who thought this was a golden road, I think, is realizing hemp has always been a struggle," Olsen said and believes the market eventually will return back to where it was. “The business models of the larger players will come into play, and it will help alleviate some of that supply," Olsen said. "Right now, it’s not happening at a rapid enough pace, unfortunately, to save a lot of people this year."

The hemp industry saw a boom in suppliers when the 2018 Farm Bill removed hemp from the governments-controlled drug category. In 2017, there were about 25,000 acres of hemp grown in the United States. In 2018, that number tripled, to about 80,000 acres of hemp.

... from Delaware.

The U.S. Department of Agriculture this week announced it had approved Delaware’s plans to grow hemp.

But is that a good thing?

One analyst is warning of overproduction, onerous testing, and saturated markets. Delaware last year launched a pilot program that attracted about two dozen registered growers, according to Stacey Hofmann, spokesperson for the state Department of Agriculture. “They were limited to 10 acres,” she said. “We had 26 registered growers, but only 18 actually grew.” On Feb. 7, the state will release registration forms and regulations governing the program. Details will be posted at https://de.gov/

“Cultivators will be able to grow as much as they want,” Hofmann said. She did not know what permit fees the state planned to charge. On Monday, the USDA approved hemp production for the states of Delaware, Nebraska, and Texas and for several Indian tribes. Earlier this month, the agency approved plans for New Jersey, Ohio, and Louisiana.

... from Kentucky

State all in!

Some of the nation’s largest industrial hemp-producing states have opted out of seeking federal approval, which is required for moving hemp across state lines. One of those opt-outs was Kentucky, where farmers planted 42,000 acres in 2019. Under the federal regulations, industrial hemp must contain less than 0.3% THC. Plants that contain more than 0.3% of intoxicating compound are regarded as marijuana. The federal government still considers marijuana to be an illegal drug on par with LSD or heroin. Previous restrictions only named the delta-9 variant of THC. But many of the industrial hemp strains also contain large amounts of THC-A. When heated, THC-A is transformed into the delta-9 variant. When the flowers of those strains are smoked, they can pack an intoxicating wallop. That has left the status of much of 2019′s crop in doubt. Much of it may be unsalable under federal law.

Under the federal program, all strains must be tested in DEA-approved labs 15 days before harvest to ensure they don’t break federal law. “And there are only 40 laboratories across the entire country,” Laird said. “Most of those already are booked up doing state-sponsored testing, not even producer testing.” That means potential bottlenecks. If farmers are forced to hold their crops for testing, desirable CBD compounds can break down before harvest.

Farmers also may be scared off from planting hemp because of a lack of demand and opaque state laws that can make it difficult to discover how much of the crop is being cultivated across the nation. The abundance of hemp in the last year has led to unsold harvests in some states. “Some farmers were slaughtered because they didn’t know how much supply was there,” Laird said. Previously, farmers expected to receive $30 to $40 a pound for CBD flower. But those that grew without contracts ended up getting as little as $10 per pound. “If yields are about 1,000 pounds per acre, you only get to break even,” Laird said. “The green rush in hemp appears to be over, at least for the meanwhile. Now many farmers are experiencing the hangover.”


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