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article imageU.S. hemp production could rise once government shutdown ends

By Ken Hanly     Jan 22, 2019 in Business
The recently passed 2018 farm bill included the legalization of the production of industrial hemp. Farmers and business owners have started planning for a big crop this year, but the government shutdown means they must wait for now.
A Digital Journal article in mid-December reports on the legalization of hemp growing in the U.S. The bill was signed by Trump in the days before the historic government shutdown.
Government shutdown delaying approval of hemp plans
With the shutdown, the US Department of Agriculture has been unable to approve any new hemp cultivation plans, and has stopped backing mortgages and some other loans to farmers. Growers and businesses need their approval before they can legally grow and process hemp. However, last Wednesday, the deadline for farmer applications for direct aid was extended.
Because of the shutdown those who wanted to jump into the business to take advantage of its projected growth will have to wait to invest or add hemp to their crops. Those already approved for hemp or businesses who already are approved to buy hemp from European sources will not be affected by the shutdown.
Hemp industry expected to see rapid growth
A recent Hemp Report notes: "Hemp was once prized for making rope. Two hundred years later, the plant still has us tied in knots. From a patchwork of state hemp rules about who can grow the crop and how it can be used to ongoing legal and medical confusion about hemp extracts, uncertainty reigns in the hemp industry. But the private sector isn’t waiting for regulators and medical researchers to untangle hemp’s potential. The hemp industry is exploding, with a dizzying variety of CBD-infused products and hemp derivatives showing up everywhere from roadside farmer’s markets to expensive boutiques to veterinarian offices. Cannabis research firm Brightfield Group estimates that the U.S. market for hemp-derived CBD hit $291 million in 2017 and will balloon to $1.65 billion by 2021 – growth of more than 500% in just four years." CBD is a cannabis product extracted from hemp and is described here.
Not surprisingly, many are disappointed that the growth of the industry is being hurt by the government shutdown. Stuart Titus the CEO of Medical Marijuana inc. said: “The wonderful new legislation passed just in time for this shutdown.”
Even if the shutdown ends, many growers hoped to meet federal guidelines by late February in order to allow enough time to plan crop rotations and source seeds. Planting is generally in April. Titus says the shutdown has thrown off this timeline and he said that some farmers as a result could possibly miss planting a crop for this spring. The longer the shutdown lasts, the more this possibility could become a reality.
Agricultural benefits of hemp growing
Hemp is quite valuable as a rotational crop in that it cleans polluted soil leaving the ground virtually weed-free and thus healthier for other crops grown the next year after it is harvested.
The crop could also help farmers on the revenue side. State prices for hemp are higher than for most traditional crops.
However, supply chains need to be developed and other infrastructure before the industry can grow fast. Randy Fortenberry, an economic professor at Washington State University, said that the growth of the industry will be a function of how states respond to the new legislation. Fortenberry warns that producers should not consider hemp some magic bullet. He notes that in Canada where hemp has been legalized since 1998, the crop is still planted on only about one percent of available farmland. He thinks the same will be the case in the U.S. Fortenberry said he was still optimistic but was cautious in considering how fast the benefits will be realized.
Now that recreational marijuana is legalized in Canada, more hemp may be planted because it can be used to produce CBD, a cannabis product that can be used both for recreation and medical purposes without inducing the hallucinatory high that THC-rich marijuana products do. If recreational marijuana and medical marijuana are legalized federally in the U.S., it may encourage more hemp growing there.
More about Hemp production in US, us government shutdown, Cannabis
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