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Commercial comeback in hemp

Emily Lytle * Delaware
elytle@doverpost.com
Dover Post

Delaware farmers are closer than ever to growing commercial hemp. The U.S. Department of Agriculture approved the state’s production plan Jan. 27, giving the state authority to regulate hemp grown as a commodity.

Before, hemp could only be grown for research purposes under the 2019 hemp research pilot program. Now, commercial growers can register for a permit with the Delaware Department of Agriculture starting Friday, Feb. 7. Delaware joins New Jersey as the two East Coast states with an approved production plan.

Gov. John Carney said the plan could boost the state economy. “I want to commend the staff at the Department of Agriculture for putting together a successful plan for smart domestic hemp production in Delaware,” he said. “Not only does this help offer another crop for our farmers to produce, but it provides value-added products that will continue to grow small business in our state.”

Some farmers are more hesitant after struggling to find a market for hemp during last year’s pilot program. “I don’t see a lot of people knocking the Department of Agriculture’s door over to get permits to grow hemp,” said Ernie Vogl, a farmer west of Harrington who grew hemp last year.

What is hemp?

Have you ever passed a field of crops that looked strikingly like marijuana? Or, maybe you were driving with the windows down and got a whiff of something peculiar? Chances are you just passed a hemp field.

Hemp and marijuana may look and smell alike because they are botanically related, but they are entirely different crops. Hemp has less than 0.3% THC, an intoxicant that causes the marijuana high. THC content in marijuana can range from 10 to 30%.

The crop has an outdoor growing season similar to corn and can be harvested for its oil, fiber and seed, used in products from clothing to building materials to lotions. The U.S. Food and Drug Administration regulates all hemp products for human and animal consumption.

Hemp grew throughout the United States from colonial times until the end of World War II, best known for centuries as a material for rope.

Despite industrial uses, stigma around the crop’s relation to marijuana led the U.S. to ban hemp when the Controlled Substances Act classified it as an illicit drug in 1970.

Research program

Last year, hemp made its comeback to the First State in a research program. Growers could apply to grow hemp indoors or outdoors, partnering with Delaware State University.

Production was limited to 10 acres, and permit holders could sell their crop if they met all research requirements, according to the department’s website. In 2019, 26 growers registered and 18 harvested a crop. The state had 82 acres of outdoor plantings and 419,620 square feet grown indoors.

Vogl grew 10 acres of hemp to harvest for CBD oil last year. While interest in CBD has been growing, he and other farmers in the state have not been able to sell their 2019 crop.

“With all the hype and everything that was going around last year at this time, and all the work that we put into that crop, my crop is still sitting in storage, and it’s hard right now to find a market for it,” he said.

State research programs like this one were included in the 2014 Farm Bill. Congress made way for commercial production when they passed the 2018 Farm Bill, which identified hemp as an agricultural commodity.

The plan

After the 2018 Farm Bill passed, the Delaware Department of Agriculture did not immediately submit a plan to grow commercial hemp. Instead, the department waited until the USDA released federal regulations Oct. 31.

“Legislation like that is no good without regulations to go with it,” said DDA Deputy Secretary Kenny Bounds. In a September interview, he said there is still a lot to learn about hemp’s risks and profitability.

“We’re excited about the opportunity for farmers to diversify income. It’s a big opportunity. But, any time there’s a new opportunity and a new crop, there’s also risk inherent in that,” he said.

Secretary of Agriculture Michael T. Scuse agreed. In a statement after the state plan approval came through, he said, “The final approval creates opportunities for growers within the state. We know that many growers are looking to produce hemp for oil, but as with any farming operation, it is important to diversify to help spread the risk.”

A 2019 New York study from Cornell University estimated total costs of production at $546 per acre when harvesting for fiber only, $486 for seed only, and $491 for both fiber and seed.

These include variable costs like labor, seed and fertilizer, and fixed costs like equipment, tractors and family management.

Estimated returns above total costs for 2019 were $248 per acre for fiber, $624 for seed, and $867 for both fiber and seed.

While the report did not include estimates for harvesting CBD oil, cost of labor is a big factor, said Jessica Inhof, DDA plant industries administrator. “It’s very labor intensive to harvest if you’re harvesting for CBD [oil],” she said.

Vogl agreed, saying it was more difficult to manage and more labor intensive than industrial hemp.

“Every time we turned around there was another roadblock,” he said. “It was hard to get information about the crop.” For example, farmers needed to find the best ways to grow hemp without using herbicides, fungicides and pesticides.

While the new plan allows farmers to grow hemp without a research component, universities across the country will continue to study the crop, said Stacey Hofmann, DDA chief of community relations.

Neighboring hemp crops

Unlike Delaware, other states like Pennsylvania did not wait for USDA approval to begin a commercial hemp program.

The Pennsylvania Department of Agriculture had already granted commercial hemp permits with 324 permit holders growing 4,000 acres in 2019.

Pennsylvania was the second state to submit their commercial hemp plan to the USDA. While it is still under review, the Pennsylvania Department of Agriculture has moved forward, knowing that the USDA regulations would be delayed, said Shannon Powers, the department press secretary.

“We didn’t want Pennsylvania farmers to miss out on opportunity,” she said.

Powers explained that the department submitted comments to the Environmental Protection Agency and the USDA, staying in communication as they carried out the plan. With two years of research programs under their belt, they felt ready to start producing commercial hemp, she said.

Plans from Pennsylvania, Virginia and 10 other states are under USDA review, while Maryland will continue to operate under their 2014 research program, according to the USDA website.