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  • Hemp Cultivation is Fully Legal for First Time in 50 Years: New Farm Commodity Slated for $20 Billion in Sales by 2020

Hemp Cultivation is Fully Legal for First Time in 50 Years: New Farm Commodity Slated for $20 Billion in Sales by 2020

In late 2016 and throughout 2017, the Kiowa County Independent printed numerous stories about the miracle plant known as hemp. At that time, most of our readers were not swayed with the potential economic force we indicated the hemp plant could bring to Kiowa County.

Hemp Oil and SeedsThe people had their reasons for not being too excited about the possibilities of hemp playing a part toward immense economic development and prosperity in small rural towns in southeastern Colorado. They, like most everyone else in the nation, associated the word hemp with negative words such as “pot”, “marijuana”, “stoners”, and “illegal.” That last term being the one that stopped them every time.

Within those articles, we explained that hemp was on the horizon because of the Farm Bill of 2014 that made it legal in all 50 states to process the hemp stalks for interstate trade and production. All of a sudden, the state of Colorado rose to the forefront of hemp production and entrepreneurship in the country.

And, although most of the economic benefits that Colorado has generated between 2014 and today exists solely on the front range and in the northeastern part of the state, the very first hemp crop in modern U.S. history was grown right here in southeastern Colorado, down in Springfield, when Ryan Loflin made history in September of 2013 (illegally) harvesting a hemp crop in Baca County. One man shattered all the rules and proved hemp could be grown in arid southeastern Colorado. Since then, Loflin has proved that it can be manufactured into hundreds of products. He incorporated Rocky Mountain Hemp in late 2013 in Springfield. That company now has a processing plant and teamed up with larger producers to make multiple products such as hemp seed and agricultural feed. Loflin believes the sky is the limit and the industry is just at its birth.

That brings us to last week when President Trump signed the 2018 Farm Bill that legalized hemp production at the federal level. That means hemp, and all of its multi-billion dollar product possibilities, is now legal and an entire industry will develop in 2019 and into 2020. In fact, experts are predicting that just the CBD industry alone will increase from its current $1 billion dollar production levels to more than 20 times that by 2020. Do you realize that is in 2 years? That is only two growing cycles of hemp? That is two years to get our act together and determine how southeastern Colorado can benefit from the growing, producing, and selling of hemp products.

Currently in Colorado, there are multiple agribusiness wellness companies that have already figured out that hemp and all its amazing parts can become the basis of multi-million dollar businesses. Most of the front range hemp corporations grow the hemp on site and process it into their various products on the same site. The most lucrative, at least for now, of the products produced and sold in Colorado include medicinal oils such as CBD, lip balm, and gummies.

Currently, and keep in mind this is going to change dramatically within six months, Colorado leads the country in acres of hemp cultivated with 30,825 registered acres with the Colorado Department of Agriculture. About 60-70 percent of these acres are historically cultivated on an annual basis.

That number might seem like a lot, but it is pittance to what is about to occur. When you consider that hemp has more than 20,000 industrial applications including by-products that can now be found in veggie burgers, computer chips, artisan soaps, hempcrete building materials, infused lotions, and hemp seeds for snacks, to name just a very few. The applications can be used in the farm animal industry where foods and materials could become abundant. The applications can be made in the plastics and biofuel industries. With this plant, truly, the sky and our own ingenuity is the limit.

One last word on the possibilities of hemp creating economic prosperity has to be CBD. As you may know, this industry is exploding because of the possible wellness benefits of the product. Of course, science is still trying to catch up as it has only been four years since we even learned about the hemp plant. But, thus far, every indication shows that CBD can play a strong medicinal role in everything from curing cancer to Alzheimers, Parkinsons, and epilepsy to assisting people with everyday issues of anxiety, depression, addiction, and pain. The CBD industry, alone, is exploding and will continue to be a market force into the next decade.

Hopefully, local farmers are coming around to the idea of growing hemp as a cash crop basis. Soon it may even be on the commodities exchange. Currently, farmers had to register as a grower with the Colorado Department of Agriculture. Growers had to make sure that their hemp did not go over the allowed .3% THC levels permitted in the crop. During the last four years growing hemp was difficult, expensive, and a real risk. Even at that, farmers in Colorado jumped in because the market for their product is there---already.

The political climate for hemp production in Colorado is changing quickly. On election day, Amendment X added a new regulation to the state’s books that stated the legislature will have control over the percent limit of THC for the hemp plants produced. Right now, the limit is 0.3 percent THC, but that could shift now that the government has legalized hemp. This allows the State of Colorado to be flexible in its definition of levels of THC in hemp. This is good news for the farmers.

Looking at 2019 the cultivation of hemp will spread all across the state. Even some old mining towns on the Western Slope are finding new life with hemp. In Nucla they are growing hemp right among the winerys. It’s a new opportunity that they have wisely embraced.

In the big picture, hemp has finally returned to its proper place in the United States. It wasn’t always a plant that was hated.

Hemp has been a part of the U.S. economy before the first drops of ink were put to the Declaration of Independence. In those days, hemp was one of the main sources of textile fiber, used mainly for rope, burlap and ship sail manufacturing.

British imperial desires gave farms a wealthy and consistent consumer for hemp products. Farms near port towns continued to blanket swaths of the East Coast.

There remained an “enormous and insatiable demand for hemp” throughout the country’s first 100 years. Eventually, market forces and cheap cotton in the late 1800s pumped the breaks on hemp profitability. By 1937, the federal and state governments had lumped hemp in with the ban on cannabis.

But similarly to how hemp was lumped in with the prohibition of cannabis, it has seen a resurgence as popular opinion turns. Despite the added boost from the rise of cannabis, the history of the pro-hemp movement has been driven by farmers and entrepreneurs.

With the latest Farm Bill, hemp advocates see a turning point for the industry.

Both of Colorado’s senators including Cory Gardner (R) and Michael Bennet (D) voted for the Farm Bill that divorced hemp once and for all away from its cousin Marijuana and off of the Controlled Substances list. Senator Michael Bennet, who is the ranking member on the Senate Agricultural Committee, wrote in an op ed today about the legalization of hemp, “There is less uncertainty and more opportunity for our hemp farmers, small businesses, and manufacturers.”

He further went on to describe the main benefits that could convince southeastern Colorado farmers and those thinking about starting a business in the hemp industry to dive in.

Major Benefits for Industrial Hemp:

• Hemp and all its derivatives will be permanently removed from the Controlled Substances Act, including "extracts, cannabinoids and derivatives" such as hemp-derived CBD
• Hemp will be under the jurisdiction of the USDA as an agricultural crop not controlled as a drug by the DEA
• Hemp farmers will have access to crop insurance, USDA grants,
• Hemp farmers and business will have access to banking and interstate commerce

So. let’s get out our crystal ball and take a look at what our future could possibly be:

Canada, for instance, is among the global leaders in hemp production and one of the main sources of imported hemp products for American markets. Though total hemp acreage there has fluctuated year to year annual retail sales for Canadian-derived hemp products have consistently netted between $20 million and $40 million. And many
Canadian hemp companies have reported their businesses growing between 20 percent and 40 percent in recent years. With the U.S. heartland offering large tracts of the same prairies where hemp has thrived in Canada, the only things really keeping domestic crops from rivaling acreages there are a lack of commercial opportunities and a shortage of capital investments. If these hurdles could be overcome, America’s hemp industry would be well primed to reclaim some of its own captive import market from its northern neighbor.

Profits from hemp processing and manufacturing are another major consideration. Though U.S. sales of hemp-derived products reached record levels in 2017, the vast majority of those sales relied on hemp materials imported from competing countries. That meant American companies missed out on nearly the entire chain of production. But now, with some estimates projecting that domestic sales of CBD products alone will surpass $2 billion in just the next two years, the commercialization of the American hemp industry might be arriving at the best possible time. It’s not too late for the U.S. economy to capitalize on the full spectrum of CBD production and distribution and reap the massive profits that will accompany this enormous growth.

Hemp CropFinally, let’s talk some hard job numbers: Kentucky, with the second-most productive hemp industry in the nation behind Colorado, has found itself at the forefront of states flirting with the commercial aspects of hemp production. In January of 2018, it was reported that a newly finished hemp processing facility associated with Kentucky’s hemp research program would bring 271 new jobs to nearby communities. If that’s the jobs footprint from a single plant, can you imagine the thousands of new jobs that would be created to develop a nationwide network of processing and manufacturing facilities powering a fully functioning American hemp industry?

Here it is folks. Here’s our chance to take a chance. Here’s the opportunity for growth in rural America that we have been talking about for some time. As the old saying goes, “God helps those who helps themselves,” and by God it’s time to get the man upstairs busy.

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