With the growing popularity of CBD, the federal legalization of hemp, and the agricultural fallout from the ongoing trade war with China, it is no surprise that large numbers of farmers are trying their hand at cultivating hemp. It is also no surprise that the burgeoning hemp industry is going through some growing pains. Two recent articles exhibit the challenges and triumphs in the hemp industry.
According to a recent article in the Chicago Tribune (subscription required), 520 Illinois farmers recently reported having hemp to harvest. But getting there has been treacherous. Farmers have struggled with hemp cultivation due to lack of experience and poor weather conditions. Chad Wallace, for instance, wanted 7,000 plants this year, but only harvested about 800. Eli Wiley planted six acres, but only three survived, and he only got a third of the poundage he expected from those three acres. And even with a successful harvest, monetizing the hemp crop has been difficult; because hemp has been illegal for so long, there are no hemp processors in Illinois, and so farmers need to ship the product out of state, with all the expenses that come with that.
The experience has been a little better in California. According to a Business Insurance article, some California hemp growers have seen massive and unexpectedly fruitful yields. Ross Bevevino, CEO of Greenbrier Holdings said “[w]e had no idea what we were doing when we planted this … We thought we were going to get 1,200 pounds per acre, but we got almost 7,000 pounds per acre.” Bevevino attributed the success to picking hemp strains that thrived in Fresno, California. “We got lucky… the three strains we picked worked.”
The takeaway is that the hemp market, like any new industry, is going to take some time to mature. Cultivators are going to experiment, sometimes successfully and sometimes not. Processors are going to take some time to come online in sufficient capacities and locations. Consumers of hemp products are going to identify the products they like and the price points they are willing to pay. But after decades in the shadows, we believe the hemp market is here to stay. We are monitoring and reporting on developments on our blog.
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