Use caution when considering industrial hemp
The next couple of years will be very challenging for area farmers and ranchers as commodity prices continue to be weak. Cash market prices that just a few years ago might have offered a small profit will not cover the cost of production today. Many agricultural producers are looking for more profitable alternatives to traditional crop and livestock enterprises.
One such alternative that many farmers are considering is industrial hemp. Industrial hemp shares the same botanical name as marijuana (Cannabis sativa). The major difference between industrial hemp and marijuana is the Tetrahydrocannabinol content. THC is the psychoactive ingredient in marijuana the produces the “high.” According to 2014 Farm Bill, industrial hemp must contain less than 0.3 percent THC on a dry weight basis.
The first step a potential industrial hemp grower must take is to register with the Colorado Department of Agriculture. Registration costs include an application fee of $500 plus $5 per acre for outdoor production or $0.33 per square foot for indoor production. Producers must file a pre-planting, planting and harvest report with the CDA. Industrial hemp fields and grow sites are subject to random inspection and THC content testing by the CDA at the growers expense. Fields or grow sites that have industrial hemp samples that test higher than 0.3 percent THC content are subject to reporting to law enforcement agencies by the CDA.
The second issue to consider is a producer’s compliance with USDA farm programs if you grow industrial hemp. The 2014 Farm Bill provided language making the production of industrial hemp possible as part of research projects conducted by state universities and state departments of agriculture however, industrial hemp is considered to be a schedule 1 controlled substance under the Controlled Substances Act.
The CDA has reached out to the various agencies within the USDA for written guidance regarding their stance on the production of industrial hemp and USDA farm program compliance. To date none of the UDSA agencies have responded in writing. The best course of action for prospective growers is to partner with a university or college in a research study to maintain your farm program compliance.
One final consideration, should you be approached by someone offering you a contract to grow industrial hemp or buy your hemp related raw products. The prospective buyer must be hold a Farm Products and Commodity Handlers license issued by the CDA. A full list of licensed buyers can be found on the CDA website at https://www.colorado.gov/agmain.
Low commodity prices have forced many producers to search for alternatives to traditional crop and livestock enterprises. Many of these alternatives provide their own set of challenges and farmers and ranchers must do their homework as they consider producing industrial hemp.
If you have questions about this topic or any other agricultural business management issue, please feel free to contact me at 970-522-7207 or email [email protected].
