{"id":1569,"date":"2019-03-08T14:08:29","date_gmt":"2019-03-08T14:08:29","guid":{"rendered":"https:\/\/agrilife.org\/texasrowcrops\/?p=1569"},"modified":"2022-11-10T15:22:25","modified_gmt":"2022-11-10T15:22:25","slug":"industrial-hemp-farming-common-questions-first-texas-legislative-approval-is-required","status":"publish","type":"post","link":"https:\/\/agrilife.org\/texasrowcrops\/2019\/03\/08\/industrial-hemp-farming-common-questions-first-texas-legislative-approval-is-required\/","title":{"rendered":"Industrial Hemp Farming & Common Questions\u2014First, Texas Legislative Approval is Required"},"content":{"rendered":"

by Dr. Calvin Trostle, Extension Agronomy, TAMU Dept. of Soil & Crop Sciences, Lubbock, 806-746-6101, ctrostle@ag.tamu.edu<\/a><\/p>\n

(Disclaimer<\/u>: \u00a0The Texas A&M University System and System agencies, including Texas A&M AgriLife Extension Service and its employees, do not advocate for or against the passage of legislation in Texas which would legalize industrial hemp production.\u00a0 Furthermore, Texas A&M AgriLife does not endorse possible future legal industrial hemp production as a viable agricultural production system in Texas relative to any other crop.)<\/em><\/p>\n

Industrial Hemp\u2014Texas Legislative Action is Required for Future Production<\/strong><\/p>\n

Despite what you may have heard, industrial hemp it is still not legal in Texas to plant, grow, and harvest.\u00a0 As mandated in the 2018 Farm Bill, which removed industrial hemp from the list of federally controlled substances, states may now develop a plan using USDA guideline to regulate and develop industrial hemp production.\u00a0 For some states, this may be relatively easy.\u00a0 But Texas has laws that currently ban all industrial hemp as illegal.<\/p>\n

Even the Texas Hemp Industries Association, https:\/\/www.facebook.com\/TexasHIA<\/a>, in January cautioned: \u201cATTENTION! \u00a0To plant and grow hemp in Texas without a license is ILLEGAL! \u00a0There are no programs to issues licenses at this time\u201d (emphasis theirs).\u00a0 TXHIA explains \u201c\u2026while the 2018 Farm Bill takes the federal Drug Enforcement Agency (DEA) out of the business of regulating hemp and hemp products, state governments continue to exercise jurisdiction over hemp, and the federal Food and Drug Administration (FDA) continues its jurisdiction over ingestible and body care products.”<\/p>\n

Reversing this ban will require action by the Texas Legislature and the governor\u2019s signature.\u00a0 Once there is legislative approval then the Texas Department of Agriculture would be directed to develop regulatory guidelines for licensing, approval, reporting, and testing requirements in Texas.\u00a0 These must then be approved by the U.S. Secretary of Agriculture.<\/p>\n

There were several industrial hemp bills filed in the Texas House and Senate at the beginning of the 2019 legislative session.\u00a0 Now a \u201cbetter\u201d bill, SB 1240, filed by state Sen. Charles Perry, Lubbock, on Feb. 27, 2019 improves alignment with requirements in USDA\u2019s 1946 Agricultural Marketing Act.\u00a0 It appears the bill also better addresses topics such as defining licensing fees, reporting, etc.\u00a0 Texas Dept. of Agriculture Commissioner Sid Miller supports passage of SB 1240.\u00a0 It is also endorsed by Texas Farm Bureau. \u00a0A summary of the bill is found at https:\/\/senate.texas.gov\/members\/d28\/press\/en\/p20190227a.pdf<\/a>\u00a0 You can read the full bill by typing \u2018hemp\u2019 in the search box at https:\/\/capitol.texas.gov\/<\/a><\/p>\n

Here are a series of questions and comments about industrial hemp<\/u>:<\/p>\n

What is industrial hemp and how does it compare to narcotic\/psychoactive marijuana?<\/em><\/p>\n

Industrial hemp and marijuana are the same plant species<\/u>. \u00a0Both are Cannabis sativa<\/em> but with distinct subspecies for industrial hemp (subsp. sativa<\/em>) and marijuana (subsp. indica<\/em>) which reflect exclusive characteristics. \u00a0C. sativa<\/em> subsp. indica<\/em> is undesirable for fiber quality.\u00a0 The buds (all female) of indica lines, which produce psychoactive tetrahydrocannabinol (THC), are used as a drug. \u00a0Industrial hemp has low levels of THC and higher levels of cannabidiol (CBD), which has popularity as an oil. \u00a0Regulatory definitions state that to be approved as industrial hemp, THC levels must not exceed 0.3%. \u00a0This THC level has no measurable or noticeable narcotic effect.\u00a0 In contrast, narcotic cannabis has been bred to have high levels of THC, often above 10%.\u00a0 The fiber of Cannabis sativa<\/em> subsp. sativa<\/em> has many uses including textiles, plastics that are biodegradable, insulation, clothing, food, and feed.\u00a0 In addition, the literature reports that subsp. sativa<\/em> and subsp. indica<\/em> are different in appearance, but I don\u2019t find a description of these visual differences.<\/p>\n

Misconceptions are common among the public\u2014industrial hemp and marijuana are not interchangeable.\u00a0 A Texas television news anchor jokes with a reporter about industrial hemp being a \u201chigh\u201d earner for farmers.\u00a0 Advocates of marijuana may be hopeful that if industrial hemp legislation passes in Texas it might help pave the way for legalization of narcotic Cannabis<\/em>.<\/p>\n

Has industrial hemp been grown in Texas before?<\/em><\/p>\n

Yes. \u00a0Dr. Larry Redmon, associate department head for Extension, Texas A&M Dept. of Soil and Crop Sciences, notes industrial hemp has been grown in most U.S. states, including Texas, at one time or another.\u00a0 Hemp was eventually overshadowed in part by cotton.\u00a0 In the 1930s there was initial hemp production in South Texas.\u00a0 But due to propaganda created by companies with a vested interest in new petroleum-based synthetics, leaders in paper, lumber, and fiber industries opposed industrial hemp for personal economic reasons.\u00a0 Though the Texas Rangers and Texas Dept. of Agriculture inspected and approved the production, in 1937 the Texas governor banned the crop.\u00a0 Ironically, just five years later due to wartime needs, production was revisited in the Lower Rio Grande Valley.<\/p>\n

Is industrial hemp adapted to Texas?<\/em><\/p>\n

\"industrial<\/a>

Industrial hemp seed head. A. Collins, Penn St. Univ.<\/p><\/div>\n

To date no Texas A&M AgriLife program has researched industrial hemp due to its continuing illegal status in Texas.\u00a0 Texas A&M AgriLife might initiate a limited research plan on industrial hemp as early as 2020 only if the state ban is lifted. \u00a0The primary future objective would be to identify which approved varieties (\u22640.3% THC) perform best in regional adaptation and production of biomass\/fiber, seed, and oil yield under different Texas environments.<\/p>\n

Literature suggests industrial hemp grows best on soils with pH 6.0 to 7.0, possibly up to 7.5.\u00a0 It is not suitable for heavy clay soils or soils that do not drain well.\u00a0 Indications from other U.S. regions suggest that industrial hemp is ideally suited where annual rainfall is at least 25 inches (which could be made up by irrigation).\u00a0 In contrast, others state that industrial hemp is a drought-tolerant crop that could perform well in drier regions of the state.<\/p>\n

Industrial hemp may be agronomically productive in drier regions, but it remains to be seen if productivity under dry conditions will be competitive with areas receiving more rainfall.\u00a0 Will industrial hemp offer an advantage relative to other crops, or provide a significant rotational benefit? \u00a0Some research and production information suggests industrial hemp may require significantly less irrigation than cotton, but again data is needed to assess levels of rainfall + irrigation, the level of production achieved, and the economics in a particular region.<\/p>\n

What is the current and potential market for industrial hemp in Texas?<\/em><\/p>\n

This is not an easy question to answer. \u00a0In Texas there is no current or potential market I am aware of for fiber<\/u>. \u00a0Not that there couldn\u2019t be, there just isn\u2019t right now.\u00a0 There might be a small market for seed and CBD oil, but a future grower would need to identify a buyer.\u00a0 Companies that market CBD oil here would need to arrange for Texas production.\u00a0 If you are going to grow in the future, I recommend an enforceable legal production contract to ensure both market and price.<\/p>\n

You can read online projections about CBD oil being worth $50 or more per ounce.\u00a0 Thus, you hear of inflated per-acre potential value, which could be 100X or more above your current cropping.\u00a0 Production of CBD oil does require many times more effort and expense (see section below on seed).\u00a0 But these high values are a poor choice to base your economics on.\u00a0 It will drop to a fraction of that once more production is available.\u00a0 There are many entities positioning themselves to be involved in the industrial hemp market.\u00a0 The state of Kentucky has received 109 applications as of January 2019 from businesses (not growers, they are separate) for licensing to work with industrial hemp and its products.\u00a0 That is up over 40 companies since 2018.\u00a0 Kentucky Dept. of Agriculture has approved over 1,030 grower permits for a potential 42,000+ acres in 2019 (though some will likely not be planted if the past is an indication).<\/p>\n

Regarding the market for CBD oil, I estimate that if 1 million people used a 6-ounce bottle of CBD oil per month, then about 20,000-25,000 acres of production nationally would fulfill that demand, if it develops.\u00a0 The medical community will need to demonstrate that CBD oil is effective for that to be sustained.\u00a0 Hemp industry observers in Colorado think that CBD oil may be the best market opportunity as otherwise China dominates much of the fiber and seed market. \u00a0The oil market, however, represents the smallest potential acreage for production.<\/p>\n

Hemp seed production is straightforward and can reportedly be handled with existing conventional equipment.\u00a0 Fiber production represents a different challenge.\u00a0 This is like hauling hay to a distant location.\u00a0 As seller\u2014or buyer\u2014you may be unable to justify the transportation cost.\u00a0 One hemp industry colleague suggests that hemp biomass production and processing may not be feasible if the fiber must be transported more than 30 miles.\u00a0 Numerous Texas farmers may be interested in growing a few acres of industrial hemp to see how it does.\u00a0 I would assume you will have no market for a few acres unless you are growing for oil.<\/p>\n

Regarding potential acreage for industrial hemp in Texas and nationally, only fiber production would have a large impact on farming systems, including the substantial opportunity to rotate crops.\u00a0 An establish fiber hemp industry might entail several hundred thousand acres. \u00a0Production for seed and CBD oil would be a small fraction of fiber acres.<\/p>\n

If industrial hemp becomes legal in Texas, where will Texas farmers get seed?<\/em><\/p>\n

This is partially a trick question<\/u>.\u00a0 For fiber and grain production, yes, farmers plant seed to raise their crop.\u00a0 At this point I am not sure about seed sources.\u00a0 Seed production is occurring in other states, but one must be certain that it is a variety that produces little or no THC.\u00a0 But if a seed dealer is in Kentucky, for example, they are not obligated to sell elsewhere if it might represent competition to their developing hemp industry.\u00a0 But remember, beyond see-how-it-grows observations, a concern equal to procuring seed, what market can you lock in before you plant?<\/p>\n

The trick question<\/u>?\u00a0 Industrial hemp production for CBD oil is a completely different matter.\u00a0 It is likely only on limited acres, perhaps a few to as many as 20 acres.\u00a0 To grow industrial hemp for oil, you transplant cloned seedlings<\/em>\u2014which you hope are all females\u2014into the field.\u00a0 In Kentucky where tobacco is transplanted, it is less an issue to establish a stand.\u00a0 Many farmers there have the equipment and know what to do.\u00a0 But farmers must have access to enough clones to plant several thousand per acre.\u00a0 Furthermore, high labor costs begin with transplanting which later must be scouted to remove all male plants. \u00a0Otherwise, the pollen from even a few male plants per acre could fertilize all females.\u00a0 The result would be greatly reduced CBD content hence little market value.\u00a0 I equate the labor, associated with scouting the fields and essentially hand harvesting, to establishing and maintaining a few acres of wine grapes.<\/p>\n

Under proposed legislation who would be allowed to grow industrial hemp in Texas?<\/em><\/p>\n

A licensing program would be established by Texas Dept. of Agriculture.\u00a0 As Sen. Perry notes, Senate Bill 1240 in its current form \u201crequires a farmer to go through a background check, obtain a license, and have a third party test their crop (within 20 days of harvest) to ensure that THC levels stay very, very low. \u00a0Anyone who abuses the system could have their crop destroyed and lose their license.”\u00a0 Also, any individual convicted of a felony within the past 10 years involving a controlled substance, would be ineligible for licensing.<\/p>\n

At a minimum in the future no one may legally produce industrial hemp in Texas without a license.\u00a0 SB 1240 outlines several potential nonrefundable fees (most capped at $100) that might be involved in producing industrial hemp, regardless of acreage size.\u00a0 These include application, annual renewal, change of plan, field inspection, and required THC testing.\u00a0 Field inspections would be random.\u00a0 If third party testing reveals THC levels >0.3% then the crop must be destroyed.<\/p>\n

Will industrial hemp be eligible for crop insurance?<\/em><\/p>\n

Several articles I have read imply industrial hemp will be insurable.\u00a0 It is not clear, though, that this is already occurring in Kentucky. \u00a0Like other crops, a program would have to be developed (possibly on state-by-state basis).\u00a0 The 2018 Farm Bill does mention adding industrial hemp to an insurance program of some kind, but it refers to the 1946 Agricultural Marketing Act.\u00a0 As of 2018, though, Penn State University notes \u201cIndustrial hemp is not currently insurable under any policy, including the Whole Farm Revenue Protection (WFRP) program that insures the revenue of your entire farm operation. \u00a0Industrial hemp cannot be covered under the Noninsured Assistance Program (NAP) administered by the USDA Farm Service Agency either. \u00a0These programs may change in the future, but at present there are no insurance-based tools for mitigating the risk of growing industrial hemp.\u201d<\/p>\n

Normally specialty and new crops are not automatically eligible for insurance.\u00a0 Typically, USDA Risk Management Agency must establish and research feasibility, perhaps conduct a pilot program, etc. before proposing a program\u2014which then in turn may require a yield history of three years for individualized insurance.<\/p>\n

What could derail passage of state law authorizing industrial hemp production in Texas?<\/em><\/p>\n

Commissioner Sid Miller, TDA, is concerned that those who want legalization of marijuana in Texas might try to append legalization to industrial hemp legislation.\u00a0 If that occurs, he believes it kills the bill.\u00a0 What might be less certain is if advocates of medical marijuana try to amend the bill.\u00a0 This might make a legislator\u2019s decision on passage less clear cut.<\/p>\n

Also, Texas law enforcement might raise objections to industrial hemp unless assured that they can visually identify non-narcotic industrial hemp vs. marijuana (with training this is possible as noted above for sativa<\/em> vs. indica<\/em> subspecies).\u00a0 Furthermore, the 2018 Farm Bill notes that submission of a plan to the U.S. Secretary of Agriculture for approval shall be done \u201cin consultation with the Governor and chief law enforcement officer of the State.\u201d This would be a potential point for objection on the part of Texas law enforcement.<\/p>\n

What resources are available for learning about how to grow industrial hemp where legally approved?<\/em><\/p>\n

Though many states\u2019 agricultural programs are working on research, few comprehensive production resources are yet available.\u00a0 There is no production information in Texas.\u00a0 Consult these sources for further information:<\/p>\n