Today, we will take a look at the state of hemp farming and cultivation across the United States (hint: it is on fire). We will also talk about the doors that are finally starting to open that treats hemp farmers like other crop farmers, which is something that has been strongly desired since the passing of the 2018 Farm Bill.
Hemp Farming More Than Quadruples!
An updated annual report released by Vote Hemp shows that hemp farming licenses are up 477% year-over-year! In 2019, a total of 16,877 state-issued hemp cultivation licenses have been granted. A total of 13 new states enabled some type of hemp legislation bringing the total number of states now with hemp legislation to 46. The only four states left to enable legislation are Idaho, Mississippi, South Dakota and New Hampshire. These states are going to get left behind in the hemp revolution if they don’t act soon. Here is an excellent depiction map of the current state of, well, each state. If a state is orange or blue it has current active hemp legislation in place. The green check marks represent states that issued hemp legislation in 2019. The orange check marks represent states that grew hemp in 2018.
Obviously, this is leading to much more hemp farming across America. It is estimated that the planted acreage of hemp in 2019 is 230,000 acres. That is up from just over 78,000 acres last year!
So why are states and farmers rushing to expedite hemp growing and cultivation? First, there are a ton of industrial and recreational uses for hemp. Second, hemp is a relatively easy crop to grow; it doesn’t require near as much water as other crops and it actually helps replenish the soil it is planted in. Next, nearly all parts of the hemp plant can be utilized. Everything from the stalk, to the leaves, to the seeds can be purposed for multiple uses. It also has the competitive advantage of being able to be grown in almost any climate. It truly is the perfect crop.
Hemp Farmers Get Access to Federal Crop Insurance
Further moving hemp farming forward, a couple of weeks ago it was announced that farmers could now quality for federal crop insurance. The insurance will come in two waves: 1) Farmers that are operating under a pilot program tied to the 2014 Farm Bill are eligible for the 2020 planting season. 2) Those that are now farming under the broader 2018 Farm Bill will have access after the USDA and FDA regulations have been fully solidified, which could be 2020, but more likely 2021.
Each farmer is eligible to be insured up to $8.5 million in annual revenue. It is important to note that the insurance only covers those that are farming hemp fiber, flower or seeds. This is an important development as hemp farmers have been wanting to hedge the risks of natural disasters and climate change just like other farmers do for their various crops. The insurance is not available for cannabis cultivators that contain more than 0.3% THC.
The real underlying excitement of this is we are finally starting to get some movement from federal agencies. Since the passing of the 2018 Farm Bill, there has been some uncertainty about how to move forward with regulating the industry. Obviously, there have been a lot of payment processing issues which we have touched on ad nauseum. Also, access to banking for loans and corporate accounts has been a national issue. There was a break on that banking front last week as the National Credit Union Administration (NCUA) laid out detailed guidelines reinforcing a key intention of the 2018 Farm Bill, which was to allow financing options to cannabis cultivators (<0.3% THC).
At Hemp Crate Co, we have been transparent that we are operating in sort of a Wild, Wild West with this burgeoning industry. It is so wonderful to finally start seeing movement on the legislative side of things. We hope it is like a dripping faucet effect and eventually the flood gates should open.
A key piece still being the pending FDA approval process. This is expected to likely continue into next year as there are a lot of opinions and voices being shared in public forums. We expect a lot of change to come out of the FDA’s ruling, primarily affecting how CBD can be added to edibles and beverages. It is highly likely that each CBD manufacturer will have to certify all of their products under this new legislation. There will be dark periods where items are missing from shelves and e-commerce shops during this certification process.
By constantly working with the best and most respected brands, Hemp Crate Co is set up to handle this transition nicely. We work with vertically integrated partners that are mostly national brands. They have the quality, resources, and budget to navigate the approval process. In the end, tighter regulations will be a good thing for the CBD industry. It should make our jobs easier, as well. Currently we spend a lot of time researching, vetting, and personally testing all products prior to agreeing to partner. A decent share of the products we test never move forward for one reason or another. In the future, we see this process being moved more upstream as the companies that don’t currently meet our standards should be filtered out by the enforced requirements from the FDA. The future looks bright!
– The Hemp Crate Co Team