Hemp could be NC’s next big cash crop
Industrial hemp is a smokin’ hot industry that is taking North Carolina by storm. There are currently 1,300 licensed hemp farmers in the state, which has 14,000 permitted hemp growth acres and 5.6 million-square-feet of indoor permitted hemp greenhouse space, according to the North Carolina Industrial Hemp Association, a trade association representing more than 400 industry stakeholders. The organization introduced and advocated for the original industrial hemp pilot program legislation that was passed in North Carolina in 2015, made possible by the 2014 Federal Farm Bill, which authorized states to start pilot programs. N.C. Industrial Hemp Association President Marty Clemons, a former corporate and securities lawyer, talked about the state’s hemp industry with Business North Carolina.
What is hemp, and what is it typically used for?
Hemp is now a commodity crop thanks to the 2018 Federal Farm Bill that removed hemp from the Controlled Substances Act, as long as the THC level is at or below .3%.
Hemp has many uses. There are different cultivars for food, fiber and wellness products. The United States is one of the few industrial nations to not have a hemp industry prior to 2014 because all cannabis has been subject to prohibition. China has a well-developed hemp textile industry, Canada has a well-developed hemp seed/grain industry. The United States market is developing around the most high value part of the plant which is currently the floral material that is used to make hemp extracts, commonly referred to as CBD, for health and wellness products.
What are some of the hottest topics or issues in the hemp industry right now?
The hottest topic is currently around factions of the N.C. legislature trying to ban what they call “smokable hemp.” The industry calls this the raw commodity crop floral parts of the plant or high-value specialty crop. Law enforcement is concerned that they can’t distinguish the smell of legal hemp versus high THC cannabis that is not currently legal in North Carolina. They claim this interferes with their probable cause to search the vehicle, but we have offered an open container law that would make it a misdemeanor crime to smoke hemp in your car, and thereby giving law enforcement probable cause to search the vehicle. They have not accepted this as a solution or the many possible field test kits that are in development. This is becoming a national issue. People that do not want to get high, but who do want the pain relief and other benefits of consuming hemp often smoke it as you would tobacco or a higher THC cannabis.
Another hot topic is that we are currently waiting for regulation from the [U.S. Department of Agriculture] and the [Food and Drug Administration]. So we have an industry that is exploding with little to no regulation.
What is the outlook for the hemp industry in North Carolina? How has it changed over the last five years, and where do you see it going in the next five years?
The outlook for the hemp industry is bright in North Carolina if we can get the full support of the N.C. legislature and the governor. We have had great support from the N.C. Department of Agriculture, N.C. State [University], [N.C.] A&T [State University], and the North Carolina Industrial Hemp Commission.
There are many states vying to be the epicenter for the hemp industry. The winners will have all oars rowing in the same direction. Where our NC farmers can compete in this global industry is by producing high-value craft hemp, just as they have done in tobacco. Five years ago, there was no hemp pilot program in North Carolina. Our pilot program required the public to raise $200,000 of their own money to get this new industry started in North Carolina. The money was raised mostly from farmers desperate to find a new cash crop in 2016. The North Carolina Industrial Hemp Commission started issuing licenses to grow in North Carolina in 2017. Our state licenses only bona fide farmers with Schedule F income to grow. This industry was funded by farmers to help farmers.
In 2017 the [Drug Enforcement Administration] held up our importation permit for hemp seed as they did for other states that started hemp pilot programs. We got the seeds too late, and it was really just a research year. Some farmers were growing for fiber in 2017, but they soon learned we did not have the processing infrastructure or markets to sell fiber into. So, farmers pivoted in 2018 to growing for the floral material because a market was developing for CBD products. We had two back-to-back hurricanes that wiped out approximately 40% of a crop that had no crop insurance. 2019 will be an important year.
The next five years, I think we will see a robust market for high-value specialty hemp and large fiber grows for industrial applications from textiles to building materials and packaging.
Why is the hemp industry important? And more specifically, why is it important in North Carolina?
The hemp industry is important for economic development and environmental reasons. There has not been a new commodity crop in modern history. Hemp has a deep root structure and can be used to sequester carbon and remove toxins from the soil.
The hemp industry is especially important for North Carolina because the DNA of our state is tobacco and textiles. Due to tariffs, most of the export market for tobacco to China has gone away. Hemp provides the opportunity for farmers to transition to a new cash crop that allows them to use their current expertise, equipment and infrastructure. Hemp could also be the basis for a resurgence in the N.C. textile industry. There is great interest and demand for sustainable fibers.