Advocates in Kentucky see a land-friendly revenue stream within the legal haze
By Frank Goad
Source: lanereport.com
Industrial hemp is a hot but still complex topic these days, especially since Kentucky passed legislation in December 2013 permitting a limited number of groups – including some state universities – to grow crops for research. With an eye on world markets and the increasing amounts Americans spend on hemp products each year, many in our state want to revive this crop and capture some portion of the millions of dollars in play.
Since legalizing hemp production in 1998, Canada’s crop is expected to surpass $1 billion in value this year. Most of it is exported to the United States.
Because of laws enacted 75-plus years ago against its fraternal twin marijuana, which is restricted because is has a psychoactive ingredient, hemp is now the only plant in the United States that may be imported but grown only with government permission.
Industrial hemp advocates have a variety of opinions regarding why it remains illegal. Some believe agribusiness lacked enough financial motivation to seek government reauthorization of hemp when there were harvests for crops such as tobacco. Others say government misinformation unjustly sustains its prohibition. Another view blames unfair competition and interference from other countries, industries or business interests to keep Kentucky and other U.S. producers out of the market.
Industrial hemp’s history is rich, though, and it is getting nearer a government-approved comeback in Kentucky. Agriculture Commissioner James Comer has lead the political efforts to redevelop industrial hemp in the state.
Canada legalized government-monitored hemp production in 1998, and most of its crop comes to the United States. The hemp industry there increased 24 percent in 2013 and is poised to pass $1 billion in annual revenue. According to the Canadian Hemp Trade Alliance, in 2011 farmers planted nearly 39,000 acres of hemp with reported net profits of $200 to $250 per acre, which is about five times what soybeans return.
Hemp seeds for food bring over $20 per pound retail. China, the Russian Federation and South Korea currently have 70 percent of that market; those government subsidize their hemp production.
Kentucky farmers are inquiring
Warren Beeler, director of agriculture policy for the Kentucky Department of Agriculture, travels extensively throughout the state and thinks there is much pent-up demand to get involved in hemp. He suggests the state could manage hemp similarly to the way tobacco crops are apportioned, regulated and monitored.
“We’ve got processors and farmers contacting us every week wanting to get started here,” Beeler said.
Hemp carries less marijuana taint among older farmers, who view it as a crop – because within their memory it was.
“Kentucky hemp strains are based on seeds from 1937 because no (strain-improving) development has been done since the Marijuana Tax Act of that year,” Beeler said. “During the (second World) War, we grew the seeds the government gave us. With our strong native strains, we have a lot of good stock to research, develop and then sell.”
The research necessary to modernize plant strains and develop a market for commonwealth hemp production will take time, he said, due to its still-limited legal status and current lack of money. But there are agribusiness incentives to make it happen.
“It’s an economical crop to grow,” said Beeler. “It’s prized as a rotational crop because its roots go 1 foot or deeper, which loosens the soil and adds oxygen. It does well as a no-till or minimum-till plant, meaning less fuel and time for field work.”
Bill Polyniak, president of Kentucky Cannabis Co., examines one of the test crops grown around the state in 2014 under a program to assess which strains might be best suited for commonwealth agribusiness if federal prohibitions are lifted.
Hemp’s strong disease and insect resistance can save up to $125 per acre in fertilizer, pesticide and herbicide costs compared to some common commercial crops, he said, and that results also in lighter environmental impact, including a small carbon footprint. Farmers like hemp as a soil stabilizer that leaves land better off after a crop is produced. A potential drawback, though, is that hemp would alter the state’s existing agribusiness landscape and infrastructure.
“Farmers only have so much room to grow crops so, if a new crop is introduced, which one drops off their list?” Beeler said. “We at the department have to consider that because there are crops we depend on being locally produced and don’t want to jeopardize.”
U.S. market must import hemp
Humans have grown hemp to be a source of fiber and lubricant oil for at least 10,000 years, but it has been illegal to grow in the United States since 1955. Many nations made marijuana illegal after adoption of the International Opium Convention of 1925, usually tainting its fiber-optimized sibling. Today 29 countries have legalized hemp production, and some subsidize its production. A few never legislated it.
The United States is the only industrialized country today that bans its production, according to the Kentucky Department of Agriculture, thus all industrial hemp products sold in the United States are imported. There are some measures of the potential revenue stream for a market considered in the early stages of development.
The Hemp Industries Association estimated the retail value of North American hemp food, vitamin and body care products at $156 million to $171 million in 2012. Add clothing, auto parts, building materials and other hemp products for non-human consumption, and the retail value was near $500 million. Hemp product consumption has increased more than 10 percent annually since 2000.
Rope has been the premier hemp product for centuries, but there are at least 25,000 others.
Hemp formerly was a major crop in Kentucky, which was a top U.S. producer and saw peaks in the early 1900s and during World War II. In the late 1850s, more than one-third of the 400 bagging, rope and cordage factories in America were located in the state.
There is some expectation that this industry history in the state will provide advantages in marketing hemp if it is grown here again. In 2013, Kentucky passed legislation to join 18 other states in hemp pilot studies and production authorized in the U.S. 2014 Farm Bill. Eight states, not including Kentucky, backed resolutions to promote the growth and marketing of U.S. industrial hemp.
Depending on its use, hemp strains are bred, cultivated, harvested and processed differently. Industrial hemp falls into two categories:
The Lotus ECO Elise prototype vehicle incorporated components formed from lightweight hemp-based fiberglass to assess its suitability as a vehicle raw material.
Human consumption: Products are used for health or nutritional needs. Ground hemp and oil becomes cosmetics, foods and supplements.
Manufacturing: Uses are very broad-based and include rope; durable cloth; a fiberglass lighter and stronger than steel or aluminum; insulation; incorporation into concrete for increased strength and energy efficiency R-values; biofuel base; and bedding in Thoroughbred stalls.
The hemp plant’s deep roots make it a “mop crop” that absorbs soil pollutants; it continues to be planted heavily around the site of the Chernobyl nuclear reactor in Russia to lessen ground contamination resulting from a catastrophic failure in 1986.
Medical marijuana a distraction
Industrial hemp’s potential legalization is being somewhat muddled and complicated by the growing attention being given medical marijuana. Industrial hemp has remained roadblocked because all cannabis plants produce the psychoactive compound tetrahydrocannabinol, or THC. Figures vary, but studies have put the THC level needed to induce psychoactivity at 3 percent or better.
In general, cannabis – whose leaves and especially its flower buds have more than 3 percent THC – is marijuana; varieties developed in recent years to emphasize their “high”-inducing quality are 10 to 30 percent THC. Strains that yield economically viable levels of fiber or oil seed have less than 1 percent THC; legislation to legalize industrial hemp calls for it to contain THC level of 0.3 percent or less.
Medical marijuana is legal in 23 states and the District of Columbia by prescription to treat anxiety, control pain and improve appetite. Marijuana is legal for recreational use as a euphoric in Colorado and Washington.
Meanwhile, another non-psychoactive cannabis medical compound has been identified. Cannabidiol, known as CBD, is showing promise in quelling the seizures of epileptic children. U.S. studies indicate a majority of test subjects using CBD-rich hemp oil refined from certain strains reduced seizures from nearly 80 percent to more than 95 percent, depending on the study. The Federal Drug Administration has authorized investigation of CBD as a treatment for severe, drug-resistant epilepsy.
Additionally, the National Cancer Institute says studies are finding CBD has anti-tumor, analgesic and appetite stimulation properties. Ironically, many current anti-seizure prescription medications are psychoactive; they also can have extremely dire side effects and at $500 to $1,000 per month are many times the cost of medicinal hemp oil.
Those calling for hemp’s legalization say lumping it in with marijuana is akin to “throwing the baby out with the bathwater,” given hemp’s many medical and health benefits. However, opponents suspect that legalizing hemp is actually a Trojan horse tactic to gain approval ultimately of marijuana.
The notoriety of the fiber crop plant grew seriously in 1970 when, as part of President Richard Nixon’s war on drug abuse, the Controlled Substances Act reclassified all varieties of cannabis as Schedule 1 drugs. That put hemp into the same class as heroin, cocaine and other powerful narcotics.
Drug enforcement authorities believed that due to its nearly identical appearance, marijuana could be hidden in hemp fields. Marijuana and industrial hemp plants are similar enough to cross-pollinate but doing so degrades the qualities of both plants.
Industrial hemp proponents say plant biology and strong financial disincentives present a case against rather than for using the fiber crop as a shield for marijuana.
“Think about it – why would any legitimate hemp producer risk his crop and farm for a little bit of marijuana?” said Bill Polyniak, president of Kentucky Cannabis Co., one of the firms involved in the state’s trial growers program. “A hemp farmer will make far more on hemp crops than what little they’d get for a few marijuana plants, so why risk that? I know I don’t want it growing within 100 miles of my crops because cross pollination would ruin everything I’m trying to build.”
Knowing what it can do
Hemp fiber’s established reputation as an advantageous manufacturing material is still being explored.
In addition to being a component of efficient insulation and strong concrete as well as a land-friendly biofuel base, vehicles such as the Lotus ECO Elise have included hemp-based fiberglass.
“Hemp has exceptional material properties that make for a very strong fiber. The hemp fibers have also been used in the manufacture of the lightweight Lotus designed seats,” the company’s literature states, going on to extol renewable hemp’s “green” advantages.
The University of Louisville is planting hemp next year in contaminated “brown fields” around Jefferson County to assess their impact on absorbing the ground’s pollution.
Frank Goad is a correspondent for The Lane Report. He can be reached at editorial@lanereport.com.
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