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. That being said, most farmers grow hemp for CBD in what is becoming a lucrative industry.
The assumption was that industrial hemp automatically became legal due to the Farm Bill. In reality, each state was responsible for submitting pilot programs to the USDA or adhering to the terms of the Farm Bill. However, a few states held out for a long time, thus preventing farmers from getting involved in the industry.
In this article, we look into industrial hemp legality to see if every state now allows it. We also focus on the hemp programs of a select group of states. But first, let’s find out more about the plant itself.
What Is Industrial Hemp?
It isn’t always easy to distinguish between hemp and marijuana! In theory, this is a significant problem for industrial hemp farms as they could get raided by law enforcement. 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. The legislation 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. However, the 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. Therefore, growing hemp is an expensive, if potentially lucrative, process.
Are Industrial Hemp Farms Legit?
The 1937 Marihuana Tax Act ban included hemp and hemp products. 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.
The industrial hemp farming act removed the plant from the list of controlled substances. 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.
Some estimates suggest one can earn $100,000 per acre of hemp. Of course, you must subtract a myriad of expenses.
Until recently, there were some holdout states, but things have changed in the hemp industry. 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! While we won’t list thousands of uses for industrial hemp, we have included several of the most common.
The flowers of the hemp plant are rich in cannabinoids, particularly CBD. CBD has become extremely popular as a nutritional supplement in recent years, with an extensive range of purported health benefits. Manufacturers get it from hemp rather than harvesting it from marijuana, which is often low in CBD, barring a few strains.
The fibrous stalks of hemp are ideal for making cloth and textiles. Some people believe that hemp is a better alternative to cotton because it is more durable and better at retaining color. Furthermore, it gets softer with wear, rather than more uncomfortable like cotton.
You can mulch some parts of hemp and use it in the construction of bioplastics. These are the plastics of the future, biodegradable alternatives that give us the convenience of plastic without damage to our planet. One of the first-ever Ford cars contained hemp materials in the dashboard.
Similarly, some inventors have figured out how to make concrete alternatives, called hempcrete, using hemp.
Yet another thing we can replace with hemp is fuel. It is commonly used in biofuels as a sustainable alternative to fossil fuels and gas.
The seeds of hemp are incredibly nutritious. They are a source of complete protein, containing all nine amino acids. They’re also packed with omega 3 and omega 6 fatty acids.
Cold pressing hemp seeds result in a delicious oil with a nutty flavor, perfect for drizzling. You also get plenty of nutrition by eating the seeds raw.
You can build your house using hemp concrete, and you can also insulate it using hemp fibers!
Animal Feed and Bedding
Hemp makes good fodder for farm animals. It’s also soft enough to make the perfect animal bedding, which is why hemp dog beds are now quite common on the market. Comfortable enough for your pet but durable enough to survive his claws!
What States Allow Industrial Hemp Cultivation?
It took some time, but finally, all 50 states now allow licensed farmers to grow industrial hemp. Mississippi was the second last state to permit hemp in June 2020. At this stage, only Idaho remained, and it was close to legalizing hemp in February 2020.
In April 2021, Idaho’s Governor, Brad Little, signed House Bill 126, legalizing hemp cultivation. However, Idaho is targeting 2022 as its first growing season. While some states have sent a specific hemp growing plan to the United States Department of Agriculture (USDA), others, like Mississippi, force farmers to apply directly to the USDA.
For the record, on January 19, 2021, the USDA published a final rule. It provided the regulations for hemp production in the United States and was effective from March 22, 2021. Here are some crucial provisions included in the final rule:
Negligent Violation: The USDA has raised the ‘negligence threshold’ from 0.5% THC to 1%. Therefore, if a farmer’s crop tests at above 0.3% THC but below 1%, they are not deemed to have committed a negligent violation. Each grower is only allowed one negligent violation per growing season.
Testing: Non-DEA labs can continue testing hemp until January 1, 2023.
Disposal of Non-Compliant Plants: Farmers don’t necessarily have to use a DEA reverse distributor or law enforcement to dispose of plants that don’t meet USDA rules. The Agricultural Marketing Service (AMS) will provide acceptable methods of disposal in due course.
Sampling: Farmers can now collect samples up to 30 days before harvest. They can take samples from the entire plant or a greater part of it.
Indian Tribal Territory: Indian tribes can exercise regulatory authority over hemp grown in their territory.
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 pollutants. 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 seven selected states.
Growing Industrial Hemp in NY
New York launched its Industrial Hemp Agricultural Research Pilot Program in 2015. It limited the number of research facilities and educational institutions that could grow hemp. The cap was removed two years later, and there are now over 100 processors and 500 hemp farmers involved in the program today.
There were 25,000 acres registered for the production of industrial hemp in New York State in 2020. In October 2020, the state’s Department of Agriculture and Markets extended the program to September 30, 2021. While retailers and distributors continue to operate in a gray area, industrial hemp farming in New York should continue to flourish.
Growing Industrial Hemp in Alabama
The state legislature approved the Alabama Industrial Hemp Research Program Act in 2016. However, the program didn’t launch until 2019 after the Farm Bill classified hemp as an agricultural commodity. With a couple of years’ worth of experience under their collective belts, hemp farmers in Alabama are learning exactly what it takes to grow a high-quality crop.
The program showed initial promise. In 2019, there were 182 licensees, a figure that rose to over 420 in 2020. In 2019, around 10,000 acres were approved, though only half were farmed. At present, it isn’t easy to gauge how successful the hemp program will become in the state.
While there is increased interest each year, a significant number of Alabama farmers pull out after earning their licenses. For example, of the 422 licensed growers in 2020, only 300 completed a harvest.
Growing Industrial Hemp in Colorado
Industrial hemp farms in Colorado face competition from recreational marijuana. Overall cannabis sales in the state exceeded $2.2 billion in 2020. Nonetheless, prospective farmers were excited at the thought of getting involved in hemp. You can 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. While licensed outdoor acreage fell by almost 25% in 2020, licensed indoor square footage almost doubled. Estimates vary, but Colorado grew at least 120,000 acres of the crop in 2020.
Growing 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. There were approximately 1,500 licensed farmers in 2021.
The news on the ban of smokable hemp hasn’t dulled the appetite of investors. Several industrial hemp processors have invested 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. Overall, licensed hemp acreage in NC increased by almost 50% outdoors and 55% indoors from 2019 to 2020.
Growing Industrial Hemp in North Dakota
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! However, while the number of farmers licensed to grow hemp increased slightly in 2020 compared to 2019, the acreage used for the crop fell by more than 10%.
The Oklahoma Industrial Hemp Agricultural Pilot Program
In June 2018, Governor Mary Fallin approved a rule designed to provide faster licensing approval to grow hemp according to the state’s pilot program. This happened before the Farm Bill removed industrial hemp from its Schedule 1 classification as per the Controlled Substances Act.
Then, in April 2019, Governor Kevin Stitt signed Senate Bill 868. This modified the pilot program to become a permanent program overseen by the Oklahoma Department of Agriculture.
By all accounts, the demand for hemp licenses exceeded expectations in the state. However, the hemp industry is competing with the red-hot MMJ market. At the end of 2020, Oklahoma was the biggest medical marijuana market in the United States per capita. It will be interesting to see if MMJ keeps hemp growth low or if the two markets can grow in tandem.
Growing 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 was seemingly worth a fortune a few years ago. 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. Yet, there was a significant reduction in licensed acres in 2020 compared to 2019, indoors and outdoors.
Farmers who sold hemp for $40 per pound in 2019 found that they couldn’t sell for breakeven price the following year. This is one of the main reasons for the reduction in hemp cultivation in Oregon.
Growing Industrial Hemp in TN
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. However, hemp growers in Tennessee planted fewer than 5,000 acres in 2020. This figure was over 15,700 acres in 2019.
Where Can I Buy Industrial Hemp Seeds?
Please note that you need a license from the relevant state department to grow industrial hemp seeds commercially. If you live in a state where cannabis cultivation is legal, any hemp plants you grow count towards your total marijuana plant limit.
Before you proceed, please ensure you only buy products from a reputable seed company. The best seed banks include Certificates of Analysis (COAs) with each batch to ensure a maximum of 0.3% THC in the seeds.
Also, you should know that it is legal to import hemp seeds from abroad. However, these seeds must come with a certificate from the exporting country that verifies the origin of the seeds. The documentation must also confirm that there are no plant pests in the seeds. Several highly-rated hemp seed banks sell their products online, including:
- Fortuna Hemp
- Grow Barato
- High Grade Hemp Seed
- Cheyenne Mountain Seed Company
- Ventura Seed Company
Bottom Line on Industrial Hemp
With Idaho finally legalizing industrial hemp, it seems as if every American state will have a hemp farm for the 2022 growing season.
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 hemp 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 think you can overcome these obstacles, the time is potentially ripe for growing industrial hemp.