WASHINGTON – The year hemp made its debut in 2014 at the Four Corners Agriculture Expo in Cortez, about 25 people showed up to learn about the plant the state of Colorado had recently legalized.
When the crop was featured this year at a talk during the annual exhibition, the number of interested people nearly tripled, said Scott Perez, one of the first hemp farmers in Southwest Colorado.
In the past five years, the plant has only grown in popularity, with hemp products and CBD oil – a nonpsychedelic extract – being featured in supermarkets, health boutiques and pharmacies throughout the state.
This expansion was accelerated with the passage of the 2018 Farm Bill, which legalized it on the federal level. Growers are still required to obtain permits from the state agriculture departments and ensure the THC in the plant does not exceed 0.3%.
Colorado has experienced an explosion of sorts in the number of registered hemp farmers, from 259 registrations in 2014 to 1,075 in 2018.
Many states have looked to Colorado’s hemp industry as a model, as the plant and products associated with it continue to multiply. But farmers and industry experts worry the state – which also led the country in marijuana legalization – is letting their industrial advantage slip away.
Expanding acreageIn 2018, 52 of Colorado’s 64 counties had at least one registered hemp farm, according to the Colorado Department of Agriculture. The number of registrations has nearly quadrupled in four years, from 259 in 2014 to 1,075 in 2018, according to the Department of Agriculture. The agency reports 40 registered farmers in La Plata County and 22 in Montezuma County.
The bulk of growth has occurred in the past two years. In 2016, the Department of Agriculture tracked almost 9,000 acres of registered hemp. That number increased to 12,024 acres in 2017, a growth rate of almost 34%. Colorado accounted for more than half the country’s 2017 production, according to an annual report by the Hemp Industry Daily, an online trade publication.
In 2018, the state Department of Agriculture tracked a growth rate of over 157%, as the number of registered acres leapfrogged to 30,950.
Colorado is already set to expand the hemp acreage in 2019.
“We’re just beginning our busiest time for registrations, and we are already pretty close to having just as many registrants as last year,” said Rob Donald, a field services inspector with the Department of Agriculture.
With so many new farmers and a rapid expansion of acreage, some worry this could have a negative impact on the industry.
“The market is probably going to get saturated, and then it won’t be as profitable,” said Abdel Berrada, a hemp researcher and specialist with Mesa Verde Ag Solutions. “There are so many businesses and entrepreneurs jumping in.”
As farming novices turn to growing hemp, there’s going to be a pretty big learning curve, said Dani Fontaine, owner of Colorado Hemp Project, an education and consulting company.
“There’s a lot of people who don’t know what the (explicative) they’re doing,” Fontaine said. “Businesses are going to be a little behind the curve and learning the process.”
An industry in need of processingHemp, the genetic cousin of marijuana minus any psychedelic effects, has more uses than cannabis. In addition to medicinal products, hemp can be processed into hundreds of products, including oil, paper, building materials, rope, fuel and food.
Despite being one of the first states to legalize industrial hemp, Colorado risks losing its advantage to other states.
“Our biggest problem is we don’t have a processing plant here,” said Perez, who owns his own agricultural consulting company. To take advantage of the wide products available from hemp, like fibers, oil and wood, the plant must be processed more extensively, Perez said.
Berrada, a retired researcher with the Colorado State University Southwestern Colorado Research Center, echoed Perez’s concerns. “The processing is not there for fiber yet,” he said.
This has led many farmers to ship their product out because there is no processing plant or infrastructure in the area to take advantage of the full potential of the plant, Perez said.
La Plata County Commissioner Julie Westendorff said the uncertainty around federal enforcement of industrial hemp before the passage of the Farm Bill led many potential farmers and investors to move with caution.
“I’m not sure we have the competitive advantage I thought we would have,” Westendorff said. “We weren’t able to take as much advantage of it as we could have because of the fears around the federal enforcement.”
Westendorff said she isn’t aware of any plans for a potential processing plant in La Plata County. But she acknowledged it’s a big investment to start a facility and there might be some lingering nerves around investing in the hemp industry, despite the Farm Bill.
“You want there to be enough product, a steady supply of the baseline plant,” Westendorff said. “The environment that constrained hemp was based on the fear of consequences, so a lot of people weren’t willing to take the risks.”
In an interview with The Durango Herald, Sen. Cory Gardner, R-Colo., said he was aware of a processing plant that closed in eastern Colorado because of a supply or regulatory issue. Gardner, along with fellow Sen. Michael Bennet, D-Colo., pushed for the inclusion of hemp legalization in the Farm Bill.
“I think that’s the big challenge. Some of the big processing facilities I’ve been familiar with have struggled in terms of maintaining their viability,” Gardner said.
But with the federal legalization of the plant, there’s noticeably more confidence from other industries to move forward with hemp, Fontaine said.
“We’re on our way to partnering with paper mills,” Fontaine said. “We’re just starting to expand.”
Maintaining the expansion through development of new products while minimizing federal regulations will be key to the growth of the hemp industry, Gardner said. “We need to make sure we’re capitalizing on Colorado’s advantage in getting a head start before we lose that head start,” he said.
Berrada predicts these new markets will only increase in the next three to four years, but without a system to process the plants, Southwest Colorado could stand to lose out on the economic benefits. “Hopefully, there will be more processing plants in the area,” he said.
To some, moving Colorado’s hemp industry forward comes down to simply trusting in the accumulated wisdom from the previous years.
“It’s not like we’re better or we have better farmers. We have more experience, and people come to Colorado to learn about it,” Fontaine said. “We pioneered this industry.”
Liz Weber is a student at American University in Washington, D.C., and an intern for The Durango Herald.