They called it another “gold rush”.
That phrase was heard all the time after the 2018 farm bill legalized the commercial cultivation of hemp. Both seasoned farmers and brand new growers wanted to plant hemp, which by law cannot have more than 0.3% of the psychoactive substance in marijuana, and sell the flowers for CBD. They could make $15,000 an acre, maybe much more, it said.
When we started doing some programs in 2017 and 2018, 500 to 1,000 people showed up who were interested in hemp, said Aaron Smith, a crop marketing specialist in the University of Tennessee Department of Agricultural and Resource Economics.
In 2019, more than 2,600 Tennesseans held hemp cultivation licenses, a 1,100% increase over the previous year. At the time, the state was in the top 10 for hemp production, according to Hemp Benchmarks.
Crash, crash, bottom out and bubble burst is how those in the hemp industry describe what happened next. Most medical uses of CBD remain unproven. And the capacity to process CBD was insufficient. Many growers found themselves in warehouses of hemp they could not sell.
I think people just got ahead of the market, said Adam Koch of Hemp Benchmarks, which tracks the price of hemp in North America. Unfortunately, many manufacturers and many processors did not fare well.
Last year, according to the US Department of Agriculture, the value of hemp produced in the United States fell 71% from the year before. And in Tennessee, only 312 growers are currently licensed to grow hemp, according to the Tennessee Department of Agriculture.
“One of the big challenges we had in ’17 and ’18 was that there wasn’t a lot of information available,” said Smith of the University of Tennessee. When you have an information gap, it gets filled with a bunch of bad information.
Smith did not give up hemp. But the future, he thinks, will be fibre. Instead of flowers for CBD, the stem of the plant will be used for fabric, paper, biofuel, building materials and even plastics. The financial rewards will be more modest, but hemp can also be beneficial to the environment. Tennessee, some argue, is uniquely situated for fiber hemp with numerous companies in the state that could transition to hemp from other raw materials.
I remain cautiously optimistic, Smith said.
The future for fiber
Hemp has a long history. The plant probably originated in China, and by the Middle Ages was widely used in Europe for fiber and food. In the United States, hemp became an important crop in the late 18th century for rope, sails, and cloth.
Hemp cultivation began in Tennessee at the beginning of the 19th century. The state seemed poised to have a significant hemp industry, but soon farmers in Missouri, Illinois, and Kentucky took the lead.
Eventually, hemp would be merged with cannabis and effectively banned by the Marijuana Tax Act of 1937. The Controlled Substances Act of 1970 made the ban official.
However, long before hemp became illegal, it fell out of favor. Steam-powered ships reduced the need for sailcloth. The new synthetic fibers were cheaper for many other uses. And cotton returned to the Deep South thanks to the invention of the cotton gin.
Frederick Cotton, as president of the Tennessee Hemp Association, is one of the biggest drivers behind the state’s modern hemp revival. He hasn’t given up on CBD, and neither has the state. The latest data from the Tennessee Department of Agriculture shows that 98% of the state’s licensees are producing hemp for CBD.
But when Cavthon advocates the future of hemp, the fiber is what excites him. During the interview, he pulled out a chart that showed how this single factory can produce dozens of products, from traditional uses like paper and cloth to new items like insulation or biocomposite plastics.
This is the raw material for the next park bench or church pew, Cotton said. Just because you have hemp outside doesn’t mean you have a bunch of hippie rockers sitting on your lawn.
Cavthon is particularly excited about the prospect of Tennessee supplying auto manufacturers with hemp-derived parts. Some companies, like Volkswagen, have already incorporated many hemp-based parts into their vehicles.
Tennessee is the center of a new auto manufacturing landscape, he said. We are right in the middle of the entire automotive supply chain.
Climate change is key
The legalization of commercial hemp in the 2018 Farm Bill has made it possible to think about the possibilities of hemp. Climate change has made the conversation feel urgent. Instead of talking about big paydays, hemp promoters are focusing on how the plant can help a warming planet.
Hemp grows faster than the trees used to produce paper pulp. Auto parts made from hemp could reduce the use of petroleum, an ingredient in plastics. And the fast-growing plant itself extracts carbon from the atmosphere.
According to studies, it has been shown that within two to six months that hemp grows, it can extract two to three times more carbon dioxide from the atmosphere than trees, said Emanuel C. Omondi, a professor who studies hemp in the state of Tennessee. University.
The Biden administration has made climate change a top priority through its Smart Climate initiative. Omondi received a $5 million grant from the USDA to study hemp. For the grant, Omondi is partnering with the University of Tennessee, the Tennessee Department of Agriculture and the Tennessee Hemp Alliance.
More:Black farmers and climate change: TSU prioritizes solving environmental challenges
Omondi believes hemp would make sense as a crop that farmers could include in rotation with established crops like corn or soybeans. Hemp can help control weeds and improve soil quality, he said.
Omondi, however, knows that the collapse of the CBD hemp market will make farmers suspicious of fiber hemp.
Many growers don’t want to touch hemp with a 10-foot pole, he said.
And while fiber hemp is full of possibilities, they remain largely hypothetical in the United States until more companies invest in facilities to process the plant.
In the south, hemp varieties that can withstand the heat are still being developed. And several chemicals are approved for controlling weeds and insects on hemp.
It will be difficult because all these other commodities are known and the potential profit is easy to recognize, said William Corbin, who grew hemp trials on his farm in Middle Tennessee.
More:How will hemp products fare in the new federal farm bill? What a key member of the TN US House says
Once more companies are able to process hemp into fiber, once a buyer is found for the crop, farmers will sign up to grow it, said Nick Walters, managing partner of the Mississippi-based National Hemp Growers Cooperative. Walters believes that will happen in the next few years. And he thinks the South will take a leading role in hemp production.
“In the long run, I really believe the southeast will be a better place, because of the water rights and the access to the ports,” he said.
Todd A. Price covers the South for the USA TODAY Network. He can be reached at firstname.lastname@example.org.
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