By: Cassandra Valdez
It’s difficult to be a farmer in 2020, and those who work in agriculture are no strangers to the challenges. Natural disasters, changes in climate, and a volatile commodities market are all part of doing business in “Big Ag.” These ever-increasing challenges have captured the attention of legislators on the Federal level. The passing of the 2018 Farm Bill, which legalized hemp cultivation federally, is evidence that the Federal government recognizes the need for provisional legislation to give America’s farm industry new life.
Senate Majority Leader, Mitch McConnell, has been a champion for this cause.
“At a time when farm income is down and growers are struggling, industrial hemp is a bright spot of agriculture’s future. My provision in the farm bill will not only legalize domestic hemp, but it will also allow state departments of agriculture to be responsible for its oversight.” – Mitch McConnell
In Mr. McConnell’s home state of Kentucky, there are only 76,000 working farms. That number reflects a severe decrease in industries such as tobacco, which Tobacco farm numbers in Kentucky have fallen 90% in the last hundred years.
States across the Midwest and South have had a similar decline in soybean, wheat, and corn production. Soybean prices have dropped dramatically in recent history amongst ongoing international trade disputes, causing farmers to explore other, more lucrative crop options.
On average, an acre of food-grade hemp can bring in five times the price of an acre of soybeans. Those numbers could mean salvation for many Americans who rely on Agriculture as an industry as well as a way of life.
According to Vote Hemp, an organization that has tracked hemp production since 2016, over half a million acres of hemp were cultivated in 2019. That is a 455% increase from 2018.
A major driving force behind the hemp movement is CBD. CBD is the second most prevalent cannabinoid in cannabis after THC and is growing more popular daily in terms of usage.
With the increasing awareness of the healing properties CBD can provide, as well as the seemingly endless applications, CBD products seem to be popping up all over the market. Products containing CBD can be found at the grocery store, in cosmetics, and even at the pet store. This growth is mainly in part to a dramatic increase in research being performed in the cannabis field.
The Global CBD Market was estimated to be worth around $570 million in 2018 and is rapidly growing. Recent studies performed by BDS Analytics and Arcview Market research, both authorities in the industry, estimated that CBD sales in the U.S. will reach $20 billion by 2024.
All of this growth has not come without growing pains, however. The 2019 growing season was an eye-opening one. Farmers were met with challenges such as seed fraud, financing, and banking issues, on top of the learning curve of growing a new crop for the first time in generations.
Traditional agriculture farms are having to create new infrastructure for processing, which for hemp requires a significant amount of care and attention. In the first major growing season for commercial hemp in the U.S., a major setback came in the form of mold. For hemp to be viable for the market, it must be harvested and cured quickly. A lack of drying space caused many farms to leave crops in the field, which left them exposed to the elements. A crop that has developed mold contains inextricable toxins that render the crop unviable for CBD production.
Creating machinery to automate the harvesting process as well as finding a reliable outlet for their crop is just a few of the additional hurdles needed to be overcome in this emerging market.
Compounding these challenges is the lack of available funding from traditional financing and banking outlets that would allow farms to make the necessary alterations to their infrastructure in order to accommodate the new crop. The lack of clear language separating hemp from marijuana in federal legislation is also causing financial institutions to hesitate to get involved in the hemp industry. The federal government defines hemp as any cannabis plant containing less than .3% THC. THC is the psychoactive component in cannabis responsible for cannabis’ “high” effect. With the distinction between the two only made via laboratory testing, banks are reluctant to risk federal backing.
Senator McConnell, as well as other legislators, have encouraged financial regulatory institutions, including the Federal Reserve as well as the Federal Deposit Insurance Corporation (the FDIC), to recognize the new legislation legitimizing hemp and open up financial resources and set regulatory guidelines for banks pertaining to the hemp industry.
The future of hemp is bright, however. Forbes magazine has reported that today, one in five Americans have used hemp-derived CBD for medicinal purposes, such as treating anxiety and pain, and that number is expected to grow. Research is also providing new insight into additional non-psychoactive components present in hemp, such as CBG and CBN, that are proving to have a myriad of medical applications. CBG and CBN could potentially help stabilize an oversaturated CBD market. As the research advances in the lesser-known cannabinoids, demand is growing. As it does, farmers will be able to diversify their crops to include CBG and CBN with little to no change in infrastructure.
These newly-studied cannabinoids may be just the tip of the iceberg as well, considering that there are over 100 different cannabinoids present in cannabis with little knowledge of what medical applications they could have.
Americans are continually increasing their knowledge of hemp and CBD and becoming more familiar with the distinction between hemp and marijuana. As they do, the social stigma of cannabis consumption is becoming a thing of the past, allowing more and more individuals to experience the healing properties of cannabis and potentially saving the farming industry in America by doing so.