After over 80 years of prohibition, it is now legal to grow industrial hemp in the United States. The passing of the Farm Bill into law in December 2018 took the plant off the list of controlled substances. You can grow industrial hemp for seed or fiber, and there are varieties for both purposes. However, most farmers grow hemp for CBD in what is becoming a lucrative industry.
What Is Industrial Hemp?
It isn’t always easy to distinguish between hemp and marijuana! This is a significant problem for industrial hemp farms that could get raided by law enforcement, in theory. After all, the term ‘hemp’ relates to plants of the Cannabis sativa species.
The regulations created by the 2018 Farm Bill have a specific definition. It states that industrial hemp includes Cannabis plants and plant parts of any variety that contain a maximum of 0.3% THC in the flowering heads and leaves.
The definition also includes derivatives of industrial hemp plants and plant parts. Examples of derivatives include hemp flour and hemp seed oil.
For the record, industrial hemp doesn’t include:
- Mature cannabis stalks. This is when the stalks are stripped of their seeds, branches, flowers, or leaves.
- Any fiber taken from these stalks.
- Non-viable cannabis seeds are not included. However, derivatives of non-viable seeds are hemp!
Farmers who specialize in the crop require a detailed understanding of it. Any plant with excessive THC is destroyed. Growing hemp is an expensive, if potentially lucrative, process.
Industrial Hemp Farming – Where Is It Legal?
The industrial hemp farming act removed the plant from the list of controlled substances. The 1937 Marihuana Tax Act ban included hemp. However, farmers grew it in locations like Kentucky during the 1950s! It was also widely grown during World War II due to its many uses, which we discuss later on.
The Bill didn’t legalize CBD, nor did it guarantee the legal operation of an industrial hemp farm in every state. It made it clear that states had to develop a plan and submit it to the United States Department of Agriculture (USDA). Therefore, states are allowed to prohibit the growth of the plant.
The Farm Bill didn’t legalize CBD, nor did it guarantee the legal operation of an industrial hemp farm in every state.
At present, Idaho stands alone as the only American state to prohibit industrial hemp cultivation. Both Mississippi and South Dakota passed legislation in hemp’s favor in 2020. Incidentally, both states also legalized medical marijuana in November 2020. South Dakota went a step further. Recreational cannabis could be on sale in SD from 2022.
Many states have submitted their plans for approval. Others have yet to do so and are happy to fall back on the Farm Bill regulations.
If you intend to grow hemp, there are plenty of considerations. Too many farmers are seduced by the potential riches that await them. Some estimates suggest one can earn $100,000 per acre. Of course, you must subtract a myriad of expenses. Nonetheless, this is less of an issue if you grow over 100 acres of high-quality hemp! In most states, up to 90% of all hemp is developed for the CBD industry. This is a shame because it is a crop with phenomenal potential.
What Are Industrial Hemp’s Uses?
The number #1 use of the crop is for the billion-dollar CBD market. It is understandable but limits the potential of this fantastic plant. If you think long and hard, you could develop a long list of useful industrial hemp products. Remember, this is a crop that once dominated the American landscape. Estimates vary, but it is believed that you can make approximately 25,000+ products from the plant!
The settlers at Jamestown in Virginia grew the crop in the 17th century; it was mandatory! Copies of the Bible were made with hemp paper, as was a draft of the Declaration of Independence. Humans used the crop for centuries with industrial hemp fiber, a particular favorite. In the early 1900s, hemp-derived cellulose was championed as a renewable and affordable raw material for plastics.
As legend has it, Henry Ford created a prototype car with biocomposite materials, including hemp. The likes of William Randolph Hearst and the DuPont family saw hemp as a threat, however. Their influence culminated in the ban of the plant, along with marijuana, in 1937.
During World War II, the U.S. Government briefly got behind a ‘Hemp for Victory’ drive. Alas, Wisconsin grew the last plant in 1958. Hemp ended up on the 1970 Controlled Substances Act as a schedule I substance.
The legalization of the crop opens an exciting future. Aside from CBD, there is also industrial hemp oil. It contains minimal CBD but has a slew of potential benefits. Proponents claim it can improve skin conditions such as dermatitis, psoriasis, and eczema. Its fatty acid content is also potentially useful for the brain. With so many plus points, it seems odd that a few states refuse to allow its cultivation.
In What States Is It Legal to Grow Industrial Hemp?
At the time of writing, there are 49 industrial hemp legal states, with Idaho the exception.
Even in Idaho, the Senate voted overwhelmingly in favor of legalizing hemp in February 2020. Senate Bill 1345 will allow farmers in the state to grow and sell hemp products. As per the 2018 Farm Bill, these items must contain less than 0.3% THC. Idaho will need to submit a plan to the USDA or operate under the federal policy by default. Unfortunately, the House panel killed the legalization bill in an agonizing 8-7 vote in March 2020.
Other states, such as Mississippi, force farmers to apply directly to the USDA.
Growing Industrial Hemp – What You Should Know
It is a plant that grows quickly. Hemp doesn’t require chemical treatments due to its high resistance to most weeds and pests. Some plants grow up to 16 feet tall, and the seeds germinate rapidly. Typically, the fiber hemp is ready for harvest 70-90 days after seeding. In general, the plant likes well-drained pastures and lots of organic matter.
It also naturally helps clean up soils. However, this becomes an issue if grown in contaminated soil as the plant soaks up the nastiness. We have a guide on tips for growing industrial hemp if you are interested in learning more. No matter what, your crop must contain a maximum of 0.3% THC.
There is arguably an investment opportunity outside cultivation as well. Given the growth of the CBD industry, perhaps it is worth looking at industrial hemp stocks? If you go down that route, please show caution and don’t invest more than you can afford to lose.
Now, let’s briefly look at the industrial hemp programs of five selected states.
Industrial Hemp in Oregon
One might imagine that Oregon industrial hemp growers are struggling. After all, the state allows recreational cannabis. However, the state said it aimed to become a global leader in the hemp industry. Indeed, researchers believe we’re only growing enough of the crop to satisfy 2% of global demand!
Gaining an Oregon industrial hemp license is potentially worth a fortune. By mid-2019, the state had planted 50,000 acres of hemp. The goal was to grow 500,000 acres by 2021, a yield potentially worth $1 billion.
However, there was a major downturn in cultivation in the first quarter of 2020. Farmers planted just one-quarter of the Q1 2019 figure.
Industrial Hemp in Colorado
Like Oregon, industrial hemp farms in Colorado face competition from recreational marijuana. Nonetheless, prospective farmers are excited at the thought of getting involved in hemp. You can now apply to grow Colorado industrial hemp on an online portal.
By the end of 2019, the state processed more than 2,600 applications across Colorado. Figures from near the end of the year showed that farmers grew an incredible 80 square miles of the crop in 2019! Colorado hopes to grow over 120,000 acres of hemp in 2020.
Industrial Hemp in North Carolina
The North Carolina industrial hemp industry suffered a blow in 2020. The state banned smokable hemp. However, you can still grow industrial hemp in North Carolina for the CBD market.
The news also hasn’t dulled the appetite of investors. Several industrial hemp processors invest millions in the industry, a process likely to create hundreds of new jobs. In October 2020, North Carolina voted to extend its industrial hemp pilot program.
Tennessee’s Industrial Hemp Program
You could technically grow industrial hemp in Tennessee back in 2014. The state enacted House Bill 2445 (SB 2495). This legislation authorized the growth of the crop as part of a pilot program.
The cost of a Tennessee industrial hemp license (certified seed license) is $350, a fee you must pay annually. The state’s Department of Agriculture licensed over 3,300 hemp growers by mid-2020. This figure was an enormous increase on the 226 licenses provided in 2018.
North Dakota’s Industrial Hemp Program
It finally became possible to grow industrial hemp in North Dakota in 2019. More pertinently, farmers could cultivate CBD hemp after years of growing the cheaper grain plant. One local newspaper outlined how farmers paid $1 per seed and were extremely careful when planting each one! Every worker gets down on their hands and knees, digs a hole, and puts the plant in the ground by hand.
Of course, there are farmers with more sophisticated equipment. However, it is still necessary for many to go ‘old-school.’ When you’re talking about a crop worth up to 40 times the value of corn, it is worth the effort!
Bottom Line on Industrial Hemp
At present, there are legal industrial hemp farms in 49 American states. Idaho is the only state digging in its heels. It is a devastating situation for the thousands of prospective farmers in Idaho. The potential profit attributed to hemp varies depending on where you live.
The suggestion that you can generate revenue of up to $100,000 per acre seems outlandish. However, it is not crazy to believe one can make a profit of up to $3,000 per acre. A 2019 study from Cornell University claimed that profits ranged from $130 to $780 per acre.
A 2019 study from Cornell University claimed that profits ranged from $130 to $780 per acre.
Whether the growth of the CBD market helps or hinders profit margins remains to be seen.
In the meantime, those aiming to grow industrial hemp should follow their state’s rules. It is essential to keep the THC content below 0.3%. We have sadly heard of many farmers losing entire harvests by going over the threshold marginally. It is heartbreaking and financially catastrophic to lose months of hard work.
It is a more labor-intensive pursuit than growing traditional crops. Also, poor first-year yields, on average, make it hard to become profitable. You also need to invest in security because thieves steal hemp in the belief it is marijuana! If you believe you can overcome these obstacles, the time is potentially ripe for growing industrial hemp. Unless, of course, you live in Idaho.