By Robert McCoppin
WWR Article Summary (tl;dr) As Robert McCoppin reports, “Hemp has long lived in the shadow of its more popular cousin, marijuana. But with the recent explosion of the cannabis extract cannabidiol, or CBD, as a dietary supplement, advocates say hemp will emerge as the next big cash crop in Illinois.”
Hidden in a cornfield in western Illinois last summer, 1,200 stalks of cannabis grew tall and bushy. But these plants won’t get anyone high.
They make up the first crop of hemp to be grown legally in Illinois in decades. And in the new year, the seeds from the plants will help sow the first modern widespread commercial hemp harvest.
Hemp — the same plant that makes marijuana but without the THC that gets users stoned — is ready to come out of hiding.
Earlier this year, state lawmakers authorized its production in Illinois. And just this month, the new federal farm bill that legalized the production of the plant nationwide was passed with bipartisan support and signed into law by President Donald Trump.
Hemp has long lived in the shadow of its more popular cousin, marijuana. But with the recent explosion of the cannabis extract cannabidiol, or CBD, as a dietary supplement, advocates say hemp will emerge as the next big cash crop in Illinois.
And while advocates believe they have the support to get both recreational marijuana, and CBD produced from marijuana, legalized in Illinois for adults, that process would probably take until 2020 to get established, giving hemp a head start because it’s already legal.
Andy Huston, a sixth-generation farmer who grew that first seed crop in the Roseville area, about 60 miles west of Peoria, says CBD is just the beginning. Hemp can also be used to produce fiber for clothing, textiles, building materials, paper and food.
“CBD oil will help the industry get started,” he said, “but there’s going to be tons of offshoot businesses that will come out of this.”
Hemp Business Journal reported that the plant generated $820 million in U.S. sales in 2017, most of it imported, but with projections to grow to nearly $2 billion by 2022 as it shifts to a made-in-America industry.
A lead sponsor of the Illinois hemp legalization bill, state Sen. Toi Hutchinson, a Democrat from Olympia Fields, said the law will allow local farmers the ability to grow a product that’s already imported and available in stores.
Typically, farmers prefer to have buyers lined up before they grow, so the industry is likely to start slowly in 2019. There’s a need for processing facilities to turn the crop into usable products.
Once growers know how to raise it and where to sell it, based on current prices, Huston believes it would be much more profitable than the typical local crops of corn and soybeans.
Hemp was widely grown domestically before the federal Marihuana Tax Act of 1937 made it prohibitively expensive and the Controlled Substances Act of 1970 made it illegal. Founding fathers George Washington and Thomas Jefferson grew hemp, and it was harvested in Illinois for rope during World War II.
But one lingering question for modern-day farmers is how hemp growing will be licensed. The Illinois Department of Agriculture plans to publish its proposed rules Friday, said Jeff Cox, chief of the Bureau of Medicinal Plants. Those will govern who can grow hemp, where, how much a license will cost and how to qualify.
The law requires licensed farmers to give police the exact GPS coordinates of their plot, so investigators can do spot testing to make sure they are growing hemp and not pot.
Federal and state laws define hemp as cannabis sativa plants that have less than 0.3 percent THC. If the plants test high or “hot,” they can be ordered to be destroyed.
To comply with the federal farm bill, the rules would have to include a criminal background check to exclude anyone with recent felony convictions for drugs.
A similar background check was initially required for the state’s pilot medical marijuana program, which has been selling the drug since 2015, but that requirement was dropped this year.
Critics said it was unfair to patients, and state health department officials said it slowed the licensing process too much, but law enforcement officials requested the provision for hemp in the new Illinois law — something to be determined in the new rules. Police are also concerned that they won’t be able to tell just by looking at a plant if it is marijuana or hemp.
After a 90-day public comment period, the state rules may be finalized in April, and state officials hope to take applications and approve licenses as quickly as possible, so farmers can get seeds or seedlings in the ground by June 1 for an optimal growing season.
If the proposed rules are workable when they come out Friday, some farmers will be quickly taking out their credit cards to order scarce hemp seed, said Liz Moran Stelk, executive director of the Illinois Stewardship Alliance, a pro-farming group that lobbied for the state law.
“There’s going to be way more competition in 2020,” she said. “It’s urgent to get the licensing done in time for spring planting.”
So far, about 150 farmers and entrepreneurs have inquired with the state about growing hemp, a small fraction of the 72,000 farmers in the state. Cox expects that number to grow substantially once the rules come out and farmers know how to plan.
Until now, hemp products were legal to import to the U.S. but not to produce here. Most of the hemp and CBD products now available in specialty shops and grocery stores come from Europe, Canada and China.
Starting in 2014, Congress authorized hemp production only through university research programs. But with cannabis remaining illegal per federal law, college officials initially were concerned about losing federal funding if they participated. Only Western Illinois University in Macomb started such a program, which is where Huston got his license to grow. Southern Illinois University in Carbondale is also starting a research program.
The new federal farm bill takes hemp off the Controlled Substances Act, thereby allowing interstate commerce, crop insurance, and standard business loans and tax deductions. Those will be major advantages for hemp over medical marijuana, which remains illegal under federal law. Another big difference is that while medical marijuana must be grown indoors for security reasons, hemp can be grown outdoors on a much larger scale.
That’s why hemp could be a welcome relief for farmers losing money to low corn and bean prices and the recent tariff war with China, said Huston, who is part owner of Salveo Health & Wellness medical marijuana dispensary in Canton, Ill. Such dispensaries can sell CBD derived from marijuana already, but only to licensed patients.
Medical marijuana business owners want to make sure hemp has to undergo the same testing as their products, which get screened for potency, pesticides and other contaminants. Otherwise, because CBD can be derived from both hemp or marijuana plants, there will be an unfair playing field, said Ross Morreale, co-founder of Ataraxia, which grows and sells medical marijuana.
But while CBD derived from hemp should be tested for its potency, Erica McBride Stark, executive director of the National Hemp Association, said there is no reason to require medical-grade testing for other uses of hemp fiber and seeds.
Hemp could bring new opportunities in particular to smaller family farmers, many of whom have been hurt or driven out of business by the “get big or get out” pressures of selling commodities like corn and beans, said Rob Davies, spokesman for the Illinois Farmers Union.
While CBD is the first play for farmers, Davies said, the long game is in fiber, as the need for natural, biodegradable materials increases. If farmers pool their money to buy processing plants, they can keep the profit. “It’s a way to stabilize farming,” he said.
Processors are also looking to cash in on the new hemp market. Orochem Technologies Inc. in Naperville issued a statement that it has patents to extract CBD, and plans to help farmers produce a variety of products.
Since passage of the farm bill, the U.S. Food and Drug Administration announced that any use of CBD oil as a dietary or health supplement is illegal without FDA approval, so industry members are waiting for direction from the FDA as to how to comply.
“They need to find a legitimate path for companies to conform to,” Stark said.
Earlier this year, the FDA approved the first plant-derived CBD drug, Epidiolex, to treat epilepsy. Hemp supporters claim the plant also helps a wide variety of other ailments, but the FDA has warned CBD marketers against making unsubstantiated medical claims. The removal of hemp from the Controlled Substances Act will allow research to investigate its health effects. That’s where growers hope to make big money.
“It’s the new thing,” Huston said. “The health benefits of CBD oil, I think they’re just scratching the surface. I can’t wait to see how this industry pans out, because it’s going to be huge.”