Large retailers have already jumped on the industrial hemp bandwagon due to its versatile uses. Rumor has it, Levi’s is going to switch to 70% cotton and 30% hemp in producing jeans. In addition, Phillip Morris cigarette machines are moving from North Carolina to the San Joaquin Valley in the next few months as CBD cigarettes replace tobacco cigarettes. “We need to be ready with a full understanding of how to farm this crop to ensure we are the number one resource for up and coming hemp growers in the Valley. Despite last year’s problems that farmers experienced in harvesting, processing, and selling, acres are on the rise throughout the state,” said Tyler.
So, what is industrial hemp? Industrial hemp is an annual cross-pollination plant with rapid growth and development that results in mass accumulation. There is often confusion between industrial hemp and marijuana due to visual similarities of widely differentiated varieties of plants. Some industrial hemp varieties are high in CBD and low in THC, the psychoactive compound in marijuana. To be farmed for CBD smokable flower or cigarettes, industrial hemp must legally contain less than 0.3% THC—too little to produce intoxicating effects. This same requirement exists for CBD in food and beverages, cosmetics and personal care products, and nutritional supplements.
Other strains of industrial hemp are high in fiber and are cultivated for use in the production of a wide range of products, including, fabrics and textiles, yarns and spun fibers, paper, construction and insulation materials, and other manufactured goods. Hemp can be grown as a fiber, seed, or other dual-purpose crop.
The history of hemp in the U.S. dates to the mid-18th century—it was grown as a commodity fiber crop until the mid-1930’s. In 2014, the Farm Bill allowed the cultivation of industrial hemp within authorized pilot programs. Later in the 2018 Farm Bill, the cultivation of hemp was decriminalized, and the USDA Agricultural Marketing Services was designated to develop regulations regarding hemp production. The FDA also regulates hemp under applicable federal laws. In recent years, industrial hemp has been rediscovered as a high-value crop due to its versatility. It may be an excellent rotation crop as it suppresses weeds and decreases insect populations and disease problems. Industrial hemp may also rebuild soil conditions by replacing organic matter and providing aeration through its extensive root system.
It is important to understand that industrial hemp falls under strict regulations when it comes to THC limits. Thirty days prior to harvest, the local sheriff will come out to a farmer’s fields to test the different varieties of hemp and ensure the THC levels meet the legal standards (THC < 0.3%). If a hemp farmer exceeds the legal limit on THC content due to unregistered seed selection and/or bad farming practices, the sheriff will require the farmer to disc up the crop. Last year, many farmers had to destroy the crop due to planting the incorrect registered seed or not getting approval from the Ag Commissioner to plant. If the farmer refuses to disc up the crop, they will be arrested and detained. There was an example of this in Merced last year that circulated in local papers. As crop advisors, we need to make sure that potential GAR Bennett customers are following all legal processes.
In the past two decades, researchers at the USDA and various land grant universities and state agencies have conducted several marketing studies. More recent available market reports indicate that the estimated gross value of hemp production per acre is about $21,000 from seeds and $12,500 from stalks (R. Hansen, “Industrial Hemp,” Agricultural Marketing Resource Center, July 2015). The commercial hemp industry in the U.S. could provide opportunities as an economically viable alternative crop for some growers.
“I am very excited about the opportunities for industrial hemp for a variety of reasons since I believe it is ethical/legal to farm (approved by Congress), can be farmed correctly with proper registration, and can be a good financial investment (with the right team, such as GAR Bennett),” states Tyler.
If you have any questions about this project or future forecasts related to the industrial hemp market, please contact Tyler directly.