Is This the Moment West Virginia Finally Opens Up to the Economic Opportunity in Hemp Farming?

 

After unanimous passage in the House on Tuesday, March 28, House Bill 2453 was introduced in the Senate, where it was double referenced to the committee on Agriculture and Rural Development and then Government Organization. On Saturday, April 1, the bill passed through Ag. and Rural Development, where the Committee opted to dispense of the bill’s second reference and report the bill directly to the Senate floor. The bill is set for a final vote in the Senate on Wednesday, April 6.

The bill, sponsored by Delegates Eldridge (D), Butler (R), and Summers (R), would alter the 2014 Industrial Hemp Development Act to allow the West Virginia Commissioner of Agriculture to expand licensing of qualified individuals and state institutions of higher learning to grow or cultivate industrial hemp in West Virginia.

The proposal would also remove hemp from the its classification as a schedule one drug within the state, which makes it illegal to sell or distribute it in the U.S.

In West Virginia, licensed hemp farmers can cultivate the crop as long as the hemp contains less than one percent of THC, the psychoactive component of marijuana, a less stringent standard than the 0.3 percent threshold set forth in the 2014 federal farm bill.

Currently, West Virginia’s Industrial Hemp Development Act prohibits farmers from selling the crop, or transporting it out of state for use in products.

HB 2453 has the support of the Commissioner of Agriculture, Kent Leonhardt, and the West Virginia Farmer’s Cooperative. Proponents of the bill argue this piece of legislation will diversify West Virginia’s agricultural sector, and provide West Virginia farmers with access to a number of new markets.

To prevent universities from competing with local farmers in the commercial sale of industrial hemp, the bill was amended by the House Judiciary Committee to reflect that universities may cultivate the plant for research purposes only.

Morgan Leech, CEO of the West Virginia Farmer’s Cooperative, recently explained “there are 25,000 different products that can be developed from the industrial hemp crop, so talking about the seed for the food industry, talking about the flowers and the leaves for the nutraceutical and the topical industries, and talking about the fiber that can develop thousands of new products.”

“It is a great opportunity for young entrepreneurs and innovators to take advantage of the new opportunities we are going to provide.”

 

Recap of prior Legislation

Through the 1920s, the United States Department of Agriculture (USDA) handled industrial hemp as it did any other farm commodity. It was widely grown, included in USDA published crop reports, and farmers were provided assistance with production and distribution.

Hemp’s heyday in the United States came to an end as it’s association with marijuana was increasingly misunderstood, and a number of states and, subsequently, the federal government, moved to strictly regulate the cultivation of hemp.

By 1937, a federal registration, a special tax stamp, and a DEA permit were required to produce the crop. The federal government classified the crop as a schedule one drug in the 1970s Controlled Substances Act, despite the fact that hemp contains no substantial amount of THC, the psychoactive chemical component of marijuana.

(As Senator Robert Beach told the Gazette-Mail recently “You could smoke 500 acres of it and it won’t get you high.”)

The passage of the 2014 federal farm bill meant hemp could be cultivated in the U.S., though it remains heavily regulated. Since 2014, 16 states have passed laws allowing for the cultivation of hemp for commercial purposes and a total of 20 states have legalized research and developed hemp cultivation pilot programs.

In 2016, 650 licensed farmers produced 12,795 acres of industrial hemp in the U.S., the same year that the West Virginia Department of Agriculture (WVDA) licensed nine individuals to cultivate 13 acres of industrial hemp as a part of the department’s research project in collaboration with West Virginia University (WVU). The research is expected to conclude how well hemp grows in West Virginia, what products can be produced from the crop, and the hemp varieties best suited to grow here. This year, 15 farmers are licensed to take part in the state’s pilot program.

Mike Manypenny of Taylor County is one of the 15 individuals licensed by the WVDA to cultivate industrial hemp in 2017. Manypenny, a co-founder of the West Virginia Farmers Cooperative, is set to grow five acres of hemp on his farm this year and is actively exploring potential hemp-based downstream industries that West Virginia farmers could one day access.

Manypenny told The Hub that the co-op is exploring a variety of potential industries that could be spurred by regional cultivation of hemp. One exploration includes research with WVU’s School of Engineering on the potential use of industrial hemp as a high-quality activated carbon, commonly used in coal plants and water filters.

Another involves a partnership with Victory Hemp Foods for the use of hemp seeds, packed with nutritious oils, in health foods. The organization is also looking into the role that hemp could play in producing recyclable bioplastics, and the use of a sugary variety of hemp to create malt, used to brew beer.

Research taking place at WVU, led by Agri Carb Electric Corporation, posits that hemp may aid soil conditions of contaminated brownfields or mountaintop mining sites, through a process called phytoremediation- which could be uniquely beneficial in West Virginia.

The West Virginia Farmer’s Cooperative is also working to address current challenges to the growing industry, which include a lack of access to specialized harvesting equipment, modernized processing and manufacturing facilities, a lack of federal or state research funding, the cost of importing certified seeds, and stringent requirements that prohibit farmers from selling the crop, or transporting it out of state.

 

Economic Impacts

For the moment, though, growing hemp in West Virginia is costly. Farmers cover 100 percent of research costs, and lack access to specialized harvesting equipment that could improve the efficiency of the harvesting process, which is otherwise labor intensive and time-consuming.

In Kentucky, the nation’s second largest industrial hemp producer, the industry is thriving. Small farms in Kentucky have benefitted from grant funding doled out by companies like Patagonia interested in obtaining a sustainable supply of U.S. based hemp, which they use in the production of their clothing line. For now, the Kentucky Department of Agriculture remains cautious, noting that the market is small, but growing.

According to a 2017 Congressional Research Service Report, Americans already safely purchase $580 million worth of hemp-based products imported each year. Due to its schedule one classification, the related farming, processing and manufacturing jobs have been located in at least 30 other countries, until now.

As Senator Beach recently said of HB 2453, “It’s revenue and it’s jobs. West Virginia is in the perfect position to expand the multifaceted landscape of this type of crop, jobs and revenue that exist in areas of agriculture, auction and distribution, production processing, manufacturing, research and education.”