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An industrial hemp grow in Nevada. Photo contributed by John Miller.

published on March 11, 2019 - 1:50 PM
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For farmers and would-be farmers looking to cash in on the national legalization of hemp, April 1 is shaping to be an important day.

No fooling.

The reason is that even though hemp was removed from the federal list of Schedule 1 substances — illegal drugs that include cocaine, ecstasy, heroine and hemp’s not-too-distant cousin, marijuana — as part of the passage of the 2018 Federal Farm Bill in December, before industrial growing can occur in California, the state first has to develop and approve its permitting rules.

Those rules largely have been finalized, and California Department of Food and Agriculture officials have indicated that permitting hemp farming likely will begin the first of next month, Brian Webster told a room full of nearly 60 people interested in the new hemp industry gathered Feb. 25 at the DoubleTree by Hilton Hotel Fresno Convention Center.

On that day, “You’ll be able to go to your county agricultural commissioner … you’ll be able to fill out a one-page form, pay a $900 [annual] fee, and you’ll be able to grow hemp under the new California rules and regulations,” said Webster, individual owner and operator of CA-Hemp, advising people getting into the hemp industry.

He puts on workshops across the state for getting involved in and investing in hemp businesses, including the one in Fresno.

Those who paid $50 to $200 to attend last month’s seminar included Valley farmers and others in the ag industry looking to see if hemp should be in their futures, tax and business advisors and people involved in ag industry supplies.

Among them was Aldo Juarez, a Fresno pest control advisor and an independent, certified crop advisor who is considering working with hemp farmers.

 

John Miller operates a business extracting cannabis oils in San Luis Obispo County and is getting into the hemp oil business. He spoke at a recent conference on hemp in Fresno. Photo by David Castellon

 

“I just came in here to learn a little bit more about hemp and what the market entails and what the market will be — also to network and find potential clients,” he said.

Hemp has a long history in the U.S. that included being grown on farms owned by George Washington and Thomas Jefferson, mostly to be used to make textiles — sails and clothing early on — and reportedly the first Levis pants were made from old hemp sails.

Hemp is similar in appearance to marijuana and contains THC, the substance that makes people high, though at such substantially lower levels that a person couldn’t get high smoking or ingesting hemp.

Despite this, the federal Marihuana Tax Act of 1937 that made marijuana illegal throughout the U.S. included hemp, ending its industrial uses here.

That changed when the 2014 Farm Bill allowed for commercial hemp growing, but only by farms associated with valid research organizations.

The new Farm Bill fully legalizes hemp, so farmers are as free to grow it as they are oranges, potatoes or wheat. This also resuscitates an old industry for a crop that by some estimates has 25,000-plus uses, from making concrete and plastic alternatives to being converted to medicinal products to being made into food items for both humans and livestock.

“It’s an industry that’s going to be developed, but it’s already a commodity now. And there’s definitely a lot of interest from big growers — people from the tomato market or alfalfa market or these guys who have a thousand acres or more and don’t know what to do with them. They want to grow hemp, and they’re looking at it as the next big crop to save them or save their companies,” Juarez said.

Experts largely agree that the Valley, with its prime soil for ag, could become a focal point in the state and the country for hemp growing, with manufacturing businesses likely to follow.

During Monday’s meeting, an attendee who declined to be interviewed said he represented a company looking at rural Fresno County as a potential site to start a hemp processing plant.

The interest isn’t just local, as several states are looking to develop their hemp industries — Kentucky, Colorado and Nevada among them. Mondays event drew people mostly from Central and Northern California, but the audience also included Brian Shade, who flew to Fresno for the day from Tennessee, where he’s a product manager for Netafim USA, a national maker, developer and distributor of irrigation equipment with its U.S. operations based in Fresno.

“I’m leading our hemp efforts for the company,” he said, adding that nationally a lot of growers are interested or have started planting hemp.

As to why, Shade said, “It’s a new crop. There’s pressures on all the conventional crops — price pressures. Corn has been very low for a very long time.

“You’ve got some environmental benefits to growing hemp, you’ve got [multiple] avenues for using that hemp,” including the making of cannabidiols (CBD) oil, which is in growing demand, as it’s used in creams, soaps, its pure form and other products, providing various medicinal benefits.

CBD also can be made with cannabis, but it can be legally grown only in some states and cannabis plants grown commercially in one of those states can’t be transported to another, as cannabis still is a Schedule 1 drug. But, a manufacturer in one state can buy raw hemp from other states, and they can ship hemp oils between states without undertaking additional work to remove THC from the oil, as they have to do with oils from cannabis.

But there is a lot to know going in, said Webster, noting that by law hemp can’t be sold unless it has .03 percent or lower levels of THC, which requires testing of the crops.

In addition, Webster and his speakers strongly suggested going into hemp farming with a game plan, knowing who is going to buy your crops and what type of products they want to make with it.

That’s because there are different varieties of hemp, and the varieties used to make oils, for example, vary from the much taller ones used for fibers used to make clothing or plastic-like materials.

For his part, Juarez warned against having expectations too high.

He said that based on his own research, some companies that manufacture or are looking to manufacture hemp are over-hyping its profitability to grow the market of hemp farmers who could supply them.

From what he has found, Juarez said, “It’s going to be more profitable than alfalfa. Its going to be more profitable than corn and tomatoes, definitely. It’s not going to be astronomical, but a tomato grower can make twofold, threefold of what they’re making now.”

While many have hitched their futures on growing cannabis since it became legal in California and some other states, hemp growers will not be burdened with the numerous regulations and over taxation hoisted upon cannabis operations by states and local governments, said John Miller, who operates a business extracting cannabis oils in San Luis Obispo County and is getting into the hemp oil business.

For one thing, counties and cities can’t outright ban hemp farms, as they can cannabis farms, but they can impose some rules and restrictions, as they can with other crops.

But the tests will be counties and cities justifying those restrictions and which farmers may challenge.

For example, rules requiring hemp plants to be tagged to identify them, so law enforcement can tell the difference between them and marijuana, which looks similar, may be reasonable, said Miller, added that requiring a 10-foot fence around hemp farms may be too much.

In addition, hemp farms may be restricted just to land zoned for ag and may be limited in size or to certain areas of a city or county. Reasons for the latter may be to prevent over production of hemp flooding the new market and plunging its value or because if pollen from hemp drifts to marijuana farms, it could adversely affect those crops.

In fact, some counties are resistant to hemp because they already have cannabis farms and want to protect them.’

So in areas with both, it’s important for farmers or local governments to impose buffer zones to keep both kinds of farms miles apart, Miller said.


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