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Will 2021 be another struggling year for the hemp industry?

Will 2021 be another struggling year for the hemp industry?

The legal hemp industry has had a turbulent couple of years.
2019 was the first full year that the legal hemp industry operated in the United States, and it was a slow start. 2020 was a difficult year for just about everybody, the hemp industry included.

The question many are now asking is, will 2021 be the year that the hemp industry begins to thrive, or is it already dying?

The boom of Cannabidiol, more popularly known as CBD, in the United States might lead some to believe that with so much publicity and demand for CBD products (which are made from hemp), the industry would be thriving. But it isn’t that simple.

In fact, in 2020 several states produced less than 40% of the acres that were licensed for hemp production by their respective states.

In a collection of hemp industry data collected by Hemp Grower they found that numerous states, some being licensed to produce thousands of acres of hemp, had only produced a fraction of what they were allotted. Arizona for example, planted just 1,130 acres, or 3.3%, of the 34,480 acres that were licensed. The state had the largest disparity out of any other in the country.

Reasons for disparities

A problem that was found in just about every state that vastly underproduced hemp had to do with the licensing processes and fees. In Arizona, no matter how many acres a hemp farmer is planning to use, they pay the same $1,000 fee. If one farmer only has 10 acres, and another has 2,000 they pay the same exact fee.

This led to many traditional row crop farmers with a lot of land to claim all of it for hemp, despite only using a fraction of the land to actually produce hemp. In other words, a large scale farmer that claimed 5,000 acres for hemp production, may only use 50 acres to grow hemp while the rest is kept for traditional crops, leading to large discrepancies in the data collection for the state.

Additionally, Arizona state inspection fees for collecting samples include a $25 per acre fee up to the first 100 acres, and then $5 an acre beyond that. Brian McGrew, the industrial hemp program manager in Arizona says that several other factors also figure into acres planted, including weather trends during growing seasons.

“There were a lot of things that did impact 2020,” McGrew says. “It actually is probably the hottest and driest year we had on record. So that really did affect not only with hemp but a lot of other industries dealing with that.” For other states, licensing was also an inhibitor.

Hemp industry licensing problems

Minnesota hemp growers planted roughly 4,700 acres, or 56% of the projected 8,400 acres that were licensed, according to Anthony Cortilet, the state’s industrial hemp program supervisor. During the licensing process, Minnesota registers farmers by the number of individual grow locations, no matter how big or small, he says. The fee is $400 for the hemp grower license at one location, and $250 for each additional grow location.

The $400 licensing fee includes the delta-9 tetrahydrocannabinol (THC) sampling and testing of one variety of hemp, but the department of agriculture collects $125 for each additional variety a grower cultivates in his or her field, which goes toward paying the laboratory costs, Cortilet says.

In Tennessee, hemp growers planted 4,836 acres in 2020, or 30.8% of the 15,722 acres that were licensed. The state department of agriculture has a staggered licensing fee system, like Minnesota, but the differences in costs are minimized to $50 increments: 5 acres or fewer is $250; between 5 and 20 acres is $300; and 20-plus acres is $350.

Each state’s hemp industry spokespeople have their reasons for the disparities, mainly that farmers and growers have different business plans and business models, while others simply underestimate the cost of hemp production, but don’t realize the costs until they have already paid for the land use.

Is the hemp industry already dying?

The current reality of the legal hemp industry may not seem very promising. In another study conducted by Hemp Benchmarks that utilizes the most current and available data on 2020 and 2019 hemp production, the results were scary.

The reports underscore the contraction that occurred in the hemp industry in 2020. For example, the amount of acreage licensed for hemp in the U.S. reached just over 400,000 in 2020, down by over 30% from roughly 590,000 acres licensed in 2019.

Additionally, Hemp Benchmarks estimated that only 35-40% of acreage licensed for hemp was actually planted in 2020, or between 140,000 to 160,000 acres. With the assumption that 85% of all U.S. acreage was for CBD or other cannabinoid production, that amounts to between 119,000 and 136,000 planted acres devoted just to CBD or other cannabinoid hemp. Their initial estimate for acreage planted with CBD or other cannabinoid hemp in 2020 is roughly half of their estimated planted acreage for 2019.

To summarize their reporting, CBD hemp production was nearly halved in 2020, while overall hemp production dropped by 30%. But it isn’t just because farmers are growing less hemp.

The issue of hot hemp

A consistent problem that has plagued the legal hemp industry is hemp produced with a THC content over .3%, commonly known throughout the community as “hot” hemp. Farmers and growers across the country have long been asking the federal government to adjust the THC requirement for hemp to be at least 1%. As such a low THC content could not realistically produce a psychoactive high, the argument is that by raising the limit slightly, more farmers would be able to produce passable hemp.

And until the majority of farmers secure trustworthy hemp genetics or the laws change, these problems will continue.

A hemp farmer in Colorado had to completely destroy 80 acres of hemp that had THC levels that were slightly above the requirement. His plants tested at .47%. That is just .17% above the legal limit, but all of his plants had to be destroyed or he risked thousands of dollars in fines. In the eyes of the government he had 80 acres of psychoactive, illegal cannabis despite being just a fraction of a percent over the limit.

For that one farmer, hot hemp means thousands of dollars flushed down the drain after months of hard labor producing flowering hemp plants or biomass. The same problem plagues farmers across the country, leading many to either cut back their production to save in the case of hot hemp issues, or stop production all together.

These factors combined have caused the shrinkage of the legal hemp industry that we saw in 2020, and what we will likely continue to see through 2021. However there is a silver lining to the trimming down of the hemp industry.

Less hemp, but higher quality

While millions of pounds of hemp were lost to the trash heap because of high THC levels in 2020, and thousands of farmers cut back their production or left the industry all together, the cream has begun to rise to the top. Hemp farmers and producers with high quality genetics, that test consistently at .3% or lower, while also enhancing the natural cannabinoids in the plant like CBD, CBG and CBN have become the go-to suppliers for serious farmers across the country.

One cannabinoid in particular exploded in 2020, and it wasn’t CBD. Delta-8 THC, the close relative to Delta-9 THC which is the main psychoactive cannabinoid bred in cannabis, was unwittingly legalized along with hemp through the 2018 Farm Bill.

Those who have tried Delta-8 THC claim that is has comparative effects to Delta-9 THC, although subdued. Advocates for D8 THC claim it is the best, legal alternative to D9 THC. This is sparking another revolution in the hemp industry as growers race to produce varietals with the highest Delta-8 THC content possible.

At the same time, the consumer’s palate is evolving to desire more complex terpene and cannabinoid profiles in their cannabis and hemp products. The increase in demand for new hemp products has the chance to give the industry a big boost in 2021.

Overall, the trend of the hemp of the industry shows a dip in 2020 that has many questioning if 2021 will be a rebound year or just a continuation. To insert a little opinion; the cannabis industry faced similar issues as it matured, as consumers demanded higher quality product and cheap producers were weeded out…pun intended.

Despite the hit that the legal hemp industry took in 2020, the demand for CBD products doesn’t appear to be slowing, and the addition of new cannabinoid-rich hemp varietals and products will bring more attention to the plant and its benefits. More research will be done this year than last year, and more people will become educated about hemp products than ever before.

Suffice to say the legal hemp industry isn’t going anywhere in 2021, if not slowly upward.

Virginia Becomes 16th State to Legalize Cannabis

Virginia Becomes 16th State to Legalize Cannabis

Virginia legalized cannabis marijuana joining 15 other states in the United States

The Virginia Legislature approved adult-use marijuana legalization Saturday in a historic vote marking the first state in the Old South to embrace full legalization.

The House passed the measure in a 48-43 vote, and the Senate approved it in a 20-19 vote. Not a single Republican voted for the bill in either chamber.

 

“This, to me, is a justice bill,” Del. Charniele Herring, a sponsor of the legalization bill and the Democratic majority leader said on the floor. “While it has its flaws and it’s not the perfect bill…I think this moves us a step in the right direction.

The vote came after a conference committee struck a deal on Saturday to reconcile different versions of the bill that passed in both chambers earlier this month.

The impact: Virginia is the 16th U.S. state to pass an adult-use marijuana legalization law, though sales would not start until 2024. Only two other states — Illinois and Vermont — have passed legislation to legalize, tax and regulate recreational marijuana through the legislature.

The move puts pressure on neighboring states such as Maryland, where an adult-use legalization bill got its first hearing this month. New Jersey also recently enacted legalization, after voters overwhelmingly backed a referendum in November.

What’s next: Democratic Gov. Ralph Northam has championed legalization as a racial justice issue.

Under the compromise legislation, marijuana possession would not become legal until January 2024, when regulated sales are scheduled to start. The state would start setting up a marijuana regulatory agency this July.

The

North Dakota House passes joint bills to legalize and tax marijuana

North Dakota House passes joint bills to legalize and tax marijuana

North Dakota house has passed a bill to legalize and tax cannabis
​North Dakota’s House of Representatives has given the green light to recreational marijuana.

The Republican-controlled House on Tuesday passed House Bill 1420 to legalize and restrict recreational marijuana on a 56-38 vote.

Representatives also passed House Bill 1501 to implement a related tax policy on a 73-21 vote. The joint bills now go to the Senate.

Reps. Jason Dockter, R-Bismarck, and Craig Headland, R-Montpelier, who said they are personally opposed to recreational marijuana, respectively brought the bills to head off citizen-initiated efforts to legalize marijuana through the constitution, after South Dakota voters did just that last year.

North Dakota voters defeated a measure to legalize marijuana in 2018. Two measure efforts in 2020 fell short of signatures for ballot placement. But backers already are gearing up for a 2022 measure to plant marijuana legalization in the state constitution.

Dockter’s bill to legalize and restrict recreational marijuana mirrors much of the state’s medical marijuana program, which the 2017 Legislature implemented after voters approved it in 2016.The bill would restrict recreational marijuana to people 21 and older, limit possession to 1 ounce, limit and track purchase amounts, limit use to private property and ban home growing.

“You can’t be walking down the street smoking a joint,” said Rep. Robin Weisz, R-Hurdsfield, who chairs the House Human Services Committee, which handled the bill.The bill also would limit the number of growers to seven and dispensaries to 18, all registered with the state.Opponents said marijuana isn’t safe, would set a poor example for children and would result in negative, long-term effects on behavior.

“To me, to surrender is not to win. It’s to give in to the wishes of the other party or the other people that you’re disagreeing with,” said Rep. Chuck Damschen, R-Hampden.Rep. Bill Tveit, R-Hazen, said “Our youth only mirror what they see in the adults around them,” citing North Dakota binge-drinking statistics for adults and teenagers.Supporters said the bill is a proactive approach to legalizing marijuana before a measure group might succeed.

Bipartisan Pennsylvania cannabis legalization bill emerges from Senate

Bipartisan Pennsylvania cannabis legalization bill emerges from Senate

Bipartisan Pennsylvania cannabis legalization bill has been introduced

A bipartisan duo of senators introduced a measure Wednesday to legalize adult use cannabis in Pennsylvania.

It’s the first time a Republican member of the chamber has cosponsored the proposal – typically endorsed solely by Democrats, including Gov. Tom Wolf and Lt. Gov. John Fetterman.

“That’s kind of the elephant in the room, if you will,” said Sen. Dan Laughlin, R-Erie. “I believe in solving problems, and adult use cannabis is no more harmful than liquor. I’m not afraid to run a bill that doesn’t fit our party’s stereotype.”

In addition to regulating and taxing the drug for public consumption, Laughlin and co-sponsor Sen. Sharif Street, D-Philadelphia, said their proposal includes a provision that would erase nonviolent cannabis convictions and decriminalizes the drug “up to a certain point” – an important step forward for social justice.

“Ordinary folks of color know they are more likely to get prosecuted for doing this,” Street said. “And yeah, it is making history if people won’t [be prosecuted] anymore.”

An analysis from the American Civil Liberties Union concluded that cannabis arrests account for more than half of all drug-related arrests in the county. Eight in 10 of the 8.2 million arrests studied between 2001 and 2010 were for possession of small amounts. Black users are also nearly four times more likely than white users to be arrested for cannabis, the ACLU said.

“This has been a 180 change in opinion for me,” Laughlin said. “I’m not a fan of the product. I don’t use it. I don’t think it’s great if people use marijuana. I know that seems a little odd … [but] I’ve realized some of the social damage we’ve done to communities of color over these minor offenses, and that really got my attention.”

Laughlin also said testimony from the Independent Fiscal Office last week that estimated tax revenues from cannabis sales could approach $1 billion further piqued his interest. 

“The final straw was a conversation I had with one of my kids … he told me he could have a bag of weed delivered to the house in under an hour and that’s better service than Amazon,” he said. “I realize anyone in Pennsylvania that wants to smoke marijuana is probably already doing it, so regulating it is the responsible thing to do.”

Florida Marijuana Sales Ranks Third In Country for 2020

Florida Marijuana Sales Ranks Third In Country for 2020

Florida marijuana sales rank third in the country for 2020
Florida’s medical cannabis marketplace generated an estimated $1.3 billion in sales last year, ranking third in the country for 2020 cannabis sales.

Although Florida has just a medical cannabis system, the state emerged as one of the nation’s most active cannabis markets in 2020, according to the recent cannabis jobs report by Leafly and Whitney Economics.

Florida ranked third in the country for cannabis sales in 2020 with an estimated total reaching $1.3 billion, only behind Colorado and California, which both have adult-use cannabis markets and have had medical cannabis systems since the 1990s.

Home to 331 dispensaries spread across the state, Florida added 170,000 patients in 2020, bringing the total of registered patients to nearly a half million at 485,693. The state also added roughly 15,000 cannabis jobs in 2020, bringing the total number of Floridians employed by the medical cannabis sector to 31,444. The report suggests Florida’s cannabis receipts could easily double if the state adopted adult-use cannabis, estimating the potential for up to $2.1 billion in sales, $800,000 per month in taxes, and up to 80,000 local jobs by 2025.

“With a state population of nearly 22 million, Florida could reasonably double its current total of cannabis jobs if it chose to legalize for all adults.” — Excerpt from the Leafly and Whitney Economics job report

Despite the high sales numbers, Florida’s medical cannabis structure has led to some issues. Additionally, there are a handful of adult-use and medical cannabis reform bills currently stalled in the Florida legislature.

Currently, a case working its way through the courts seeks to overturn the state’s vertically integrated regulatory structure on grounds that it is unconstitutional, The Center Square reports. Already having won its challenge in Tallahassee District Court, the case will be considered next by the Florida Supreme Court on March 1.

At least one bill seeking to limit THC levels in medical cannabis products will reach committee consideration, however, setting up a potential contest between the growing cannabis prevention movement, a tax-hungry state budget, and medical cannabis patients.

Murphy signs N.J. legal weed bills, ending 3-year saga

Murphy signs N.J. legal weed bills, ending 3-year saga

New Jersey finally legalizes cannabis officially.

More than three years after he took office with hopes of legalizing marijuana in 100 days, Gov. Phil Murphy signed three bills that together launch a marijuana industry in New Jersey and put an end to thousands of arrests.

 

But it took more than a marijuana-friendly governor to make reform a reality. There were years of failed legislative attempts, a ballot question that garnered more than 2.7 million votes in favor and three months of negotiations on tax revenue, licensing rules and the ultimate hangup that nearly killed the effort: penalties for those under 21 caught with marijuana.

Murphy signed the bills Monday morning without the usual fanfare, putting his pen to paper just before the deadline to take action struck. If he had done nothing, two measures seeking to launch a legal marijuana industry and to end arrests would have become law without his signature.

“As of this moment, New Jersey’s broken and indefensible marijuana laws which permanently stained the records of many residents and short-circuited their futures, and which disproportionately hurt communities of color and failed the meaning of justice at every level, social or otherwise — are no more,” he said Monday afternoon during his briefing on the coronavirus in Trenton.

The governor signed the bills after both the Senate and Assembly held last-minute voting sessions Monday morning to pass a third bill establishing civil penalties for those under 21 caught with marijuana. Protracted debate drew the voting sessions out, and the bill passed both chambers with only 20 minutes left for Murphy to act on the first two measures.

The legalization and decriminalization bills languished on Murphy’s desk for more than two months awaiting the proposal. The governor said he would not sign them until lawmakers made penalties clear, but refused to issue a conditional veto calling for the change.

As the bills awaited action in 2021, police issued more than 2,000 charges for minor marijuana possession.

And a few plans developed and collapsed In that time. Lawmakers extended the deadline for Murphy to sign the bills by more than two weeks and the lengthy, sometimes tense, negotiations continued.

They finally proved fruitful Monday morning.

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