The U.S. Department of Agriculture this week announced it had approved Delaware’s plans to grow hemp in the First State.
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 de.gov/hemp.
“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.
Pennsylvania posted its growing guidelines and applications two weeks ago.
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 were permitted to plant 42,000 acres in 2019, said Ian Laird of New Leaf Data Services, which publishes Hemp Benchmarks.
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.
“Most states previously only tested for delta-9 tetrahydrocannabinol, or THC, the psychoactive molecule in cannabis. Under the USDA’s Interim Final Rules, however, the test now also includes decarboxylated THC-A, which converts to THC when heated,” Laird said. "Under this test, known as ‘Total THC,’ many of the newer high-CBD hemp strains will test ‘hot’ and exceed the .0.3% limit, which means the plants will be considered marijuana and will need to be destroyed. "
That, to the surprise of many farmers, has left the legal 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 DEA approved laboratories across the entire country,” Laird said. “Many of those already are booked up doing state-sponsored testing, and will not have capacity for 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.