Despite the enthusiasm for the legalization of hemp, Ohio Department of Agriculture received 198 applications for hemp cultivation for the 2020 growing season.
This number may seem low, given the interest in hemp in Ohio since the state legalized production in 2019. Recent Ohio State University webinars on hemp production had 1,115 participants. Pennsylvania approved 324 permits for growing hemp in 2019, and West Virginia received more than 400 applications for the 2020 season.
To some industry experts, however, Ohio’s application numbers are not surprising, given that it is Ohio’s first full season of hemp production, and that many farmers are finding that hemp is not as simple or as lucrative a crop as they originally believed.
Hemp cultivation applications closed May 1 in Ohio. The ODA did not have data on how many applications were approved as of May 4.
Labor
Tim Johnson is a co-founder of the Ohio Cannabis and Hemp Chamber of Commerce, and consults with farmers and businesses that want to get into the hemp and cannabis industries.
“We’re seeing a lot of people that do want to jump in, but they’re backing down,” Johnson told Farm and Dairy May 1.
For one thing, Johnson said, many of them didn’t realize how much work growing hemp takes.
One farmer he talked to originally wanted to grow 2,000 acres of hemp. But hemp needs a lot of attention. Farmers have to monitor THC levels and pests. Growing that many acres would require multiple people to manage the crop every day. Most of the farmers Johnson talked to who did decide to grow hemp this year cut back on the number of acres they originally planned to grow.
In a March 30 Ohio State webinar, Brad Bergefurd, an OSU horticulture specialist, noted that, while some states have grown hemp recently through research pilot programs, it has been more than 80 years since hemp was grown in Ohio.
“Just because it’s legal and we can grow it in Ohio now does not mean we’re quite ready,” he said.
Markets
In addition to the labor, there is no guarantee of dramatic financial rewards in hemp. Hemp can be grown for CBD, fiber or seeds. CBD is the largest market for hemp right now, but, Johnson said, that market seems to be saturated.
“Everybody sees this quick grab in the CBD hemp side,” Johnson said.
Bergefurd noted that farmers in some states were making up to $75,000 per acre in gross income for hemp in 2018, but in 2019, that number dropped to $20,000 per acre as more farmers got involved in the industry. It’s hard to know what these numbers will look like for the 2020 season.
“Now, keep in mind, it’s gonna cost you $10-15,000 (per acre) to plant this crop and get it to market,” Bergefurd added.
THC level limits also pose a risk. Hemp crops must have their THC levels tested, and crops that go over the 0.3% limit are legally classified as marijuana and must be destroyed. So, considering all these challenges, some Ohio farmers are holding off on growing hemp.
“We see more of them decide not to get into the industry,” Johnson said. “They are seeing how it plays out.”
Fiber
Johnson noted that recently, he has seen some companies turn away from CBD hemp and towards fiber hemp for textiles.
Craig Schluttenhofer, research assistant professor of natural products at Central State University, in Wilberforce, Ohio, said in an April 9 webinar for Ohio State that hemp fiber and grain could be well-suited for growing in Ohio, once those markets develop more.
“A lot of people will see fiber being eventually the largest part of the industry sector and grain is definitely going to be in there as well,” Schluttenhofer said.
Johnson believes that more companies will turn to hemp fiber products over the next five to 10 years as more infrastructure is built in the U.S.
“There is a demand for the textile side; it’s just building the infrastructure,” he said. “That’s probably where the growth and the money is gonna be.”
