After struggling with an oversaturated market for the last two years, hemp growers remain cautious approaching the upcoming planting season, regional agricultural officials said.
Maryland, Delaware and Virginia are waiting to see how many farmers register once again to grow the crop following two years of mostly disappointment and mounds of decaying, unsold hemp.
“The interest is still growing,” said Jim Drews, who helps oversee the hemp program at the Maryland Department of Agriculture. “There’s still a lot of uncertainty, so some people are playing wait and see.”
Early signs are mixed. A sagging market for CBD biomass — from which processors extract CBD oils, distillate or isolate — is likely contributing to lower-than-expected interest this year in CBD genetics, according to a February report by Hemp Benchmarks, an industry data firm.
The report details an abrupt, nationwide retreat from the crop by many growers last year, when production fell by more than 30 percent from about 590,000 acres to 400,000, proving the industry’s explosive growth in 2019 wasn’t sustainable.
“The overabundance of biomass available (in 2020) tells me that while the farmers were ready, the industry wasn’t,” Jeff Greene, co-founder of the Florida Hemp Council, said in the report. “I think that we’re probably going to run through a year or two… where we’re going to see the pendulum swing from abundance to shortage of biomass.”
Maryland appears to be registering growers at the about the same pace as it did last year when the state boasted more than 100 operations, Drews said. It’s the first year for Maryland’s hemp farming program, which has established the crop as an agricultural commodity.
Growers in the state have been raising hemp in a research pilot program for the last two years that paired them with higher education institutions. Maryland farmers can join either program.
“I think people are starting to figure it out,” said Kevin Conroy, assistant secretary at the department. “It’s a steep learning curve.”
Delaware’s hemp program may welcome several new growers, but its farmers are approaching the crop as cautiously as the state government, which limited farmers to 10 acres in 2019, said Kenny Bounds, the state’s deputy secretary of agriculture.
Those who remain aren’t motivated by “get-rich-quick” dreams. Eighteen Delaware farmers raised hemp in 2019 and just seven did last year, he said. So far, the state has four additional applicants this year, he said.
“We’ve seen some growers establish relationships with buyers at the beginning of the season, and we think that will bode well for a more sustainable business plan,” he said.
But Bounds said he still sees a “confused” market that hasn’t yet settled.
“The future is wide open for hemp, but it’s not right now,” he said.
In Virginia, there is more optimism. The state registered about 1,200 hemp growers the last two years, and it doesn’t expect a decrease this year, said Erin Williams, who oversees the state’s industrial hemp program. The state also boasts nearly 300 registered hemp processors, but some growers still haven’t sold some of their 2019 crop, she said.
Growers, at that point, were more speculative.
“I think we’ll see a shift towards growers knowing who their buyer is before they plant,” she said.
Virginia will continue with its research program for another year after the federal government rejected its proposed hemp program last year over state language that offered more flexibility for growers on THC limits, she said. COVID-19 arrived shortly thereafter, and the state’s priorities changed.
Conroy also said he’s more optimistic. He recalled getting a call from a desperate grower in Kentucky who was searching for a hemp buyer. Growers, he said, were driving from state to state, trying to offload their harvest at auction. He doesn’t see that desperation this year.
“Everyone wanted to get into it (in 2019) because everyone thought they would make a lot of money,” he said. “With growers signing up for their third year, they’re not doing that if they don’t see a reason to.”