The hemp industry, it seems, is on a wild roller coaster that won’t seem to stop. For starters, the crop has for decades had a taboo aspect to it because of its relation to the infamous marijuana. Still, it has numerous other non-intoxicating uses, and in 2018, Congress passed the Farm Bill, effectively legalizing the cultivation of industrial hemp. The sector quickly grew carried by demand for the increasingly popular hemp extract cannabidiol (CBD), and in just one short year, the industry was flooded with thousands of unregulated CBD products.
After continued calls for the United States Department of Agriculture (USDA) to provide a regulatory structure for the sector, the agency finally released its interim final rule on hemp. Under the new rule, any State or Indian Tribe that wishes to have a hemp program will have to submit a state plan to the USDA for evaluation. As states write up their hemp regulations, small hemp farmers in Ohio are feeling like they got the short end of the stick after learning about the new costs and planting requirements.
Under the Ohio Department of Agriculture’s proposed rules, hemp farmers in the state must use at least a quarter acre and grow at least 1000 plants. Application and license fees will total hundreds of dollars. David Miran, Executive Director of the department’s hemp program, says the rules were devised after a review of hemp programs in other states and assessing what worked and didn’t work for them.
However, small farmers interested in hemp fear the new stringent requirements might lock them out of a very lucrative cash crop. Andy Huop grows organic vegetables on two acres in Groveport, and he is always on the lookout for high value crops to grow on small plots. According to him, the acreage and planting requirements are a high barrier to entry. “We would love to get our foot in the door and start learning about how to produce the crop successfully,” he says.
Miran, on the other hand, says the state wants to only grow hemp for commercial purposes. “If too many people grow hemp on small patches in their backyards, police would have difficulty differentiating it from illegal marijuana as the plants look similar,” he says. “Restricting the crop to larger operations eases that burden.”
He says that the proposed rules provide wiggle room for farmers with slightly less than a quarter of an acre to grow hemp on, or those who plant slightly fewer than 1000 plants. “The variance is dictated by logic and reason,” he says. Farmers will have to pay a $500 dollar application fee, and those who want to grow hemp in more than one location will have to pay the fee for each site.
Jen Lunch, President of the Ohio Hemp Association, says that the new rules may be restrictive, but they won’t break the industry. “But overall,” she says, “the state wrote a solid set of rules.” The rules are expected to be finalized in January.
It is a widely held belief that hemp industry players like Canopy Rivers Inc. (TSX: RIV) (OTC: CNPOF) and Organigram Holdings Inc. (TSX: OGI) (NASDAQ: OGI) prefer an arrangement that favors everybody, including small farmers.
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