Economics of Industrial Hemp

Industrial hemp has been grown in the United States since our forefathers founded the country.  The first drafts of the Declaration of Independence were written on paper made from hemp.  Hemp is easy to grow, requires very little maintenance and no harmful chemical treatments, and it can be used for a number of things.

Hemp’s downfall in the United States can be traced back to the 1937 Marihuana Act, which imposed taxes and bureaucratic burdens on farmers. The culprit was the First Federal Bureau of Narcotics commissioner, Harry Anslinger, whose department needed something to focus on when prohibition was repealed and in1970, the Controlled Substances Act (CSA) lumped hemp in with marijuana and prohibited cultivation.

The US is the only country in the world that makes it illegal to grow hemp, so all of our hemp products to date have been imported mostly from Canada, France and China. Since hemp is used in the production of everything from paper, plastics, clothing, milk and food products, these imports equal approximately $580 million a year that US consumers are already spending.

On February 7, 2014, President Obama signed the Farm Bill of 2013 into law. Section 7606 of the act, Legitimacy of Industrial Hemp Research, defines industrial hemp as distinct from marijuana and authorizes institutions of higher education or state’s department of agriculture in states that legalized hemp cultivation to regulate and conduct research and pilot programs.

Hemp production has been legalized in North Carolina, but only as part of the state’s pilot program as allowed under federal law. The N.C. General Assembly passed Senate Bill 313 in 2015, allowing the Industrial Hemp Commission to develop the rules and licensing structure necessary to stay within federal laws. The law was modified in 2016 in House Bill 992. The Industrial Hemp Commission adopted temporary rules for review in February 2017. The Rules Review Commission of the Office of Administrative Hearings voted to approve these rules Feb. 16.

With hemp now a legal crop again in North Carolina, the first farms planted crops late this summer in many counties. There are many more farmers pledged to grow the crop around Randolph County and the state in 2018.  A few of the economic benefits to growing hemp are:

  • Industrial hemp doesn’t require herbicides. Because hemp matures in approximately 120 days, it provides a canopy within 5-6 weeks that most weeds cannot penetrate, meaning no harmful chemical spraying and less cost to the farmer.
  • There are fewer biological pests to industrial hemp. So you don’t have to spend a fortune in insecticides.
  • Hemp can be used to restore depleted soils. Studies have shown that hemp can be used as a “mop” crop on soils that have been heavily damaged by chemical use.
  • Hemp is easy to grow as it is a strong and hardy plant. So that means less work and stress about weather and other factors outside the farmer’s control.
  • You don’t need special machinery to harvest hemp. A simple brush cutter is enough for some crops and farmers probably have easy access to a harvester.
  • You can grow a profitable hemp crop on as little as one acre.
  • Industrial hemp is profitable. The growing demand for hemp based products means a profitable crop, compared to most crops with declining economic returns.
  • Industrial hemp is being recognized by governments around the world as being an ecologically friendly crop.
  • There are professional bodies promoting the growing and use of hemp. This is raising the profile of hemp and making it easier to get government licenses to grow the crop and with a processing plant located right here in Randolph County, it will bring revenue to many local businesses.

In this series of articles, we have talked about the uses for Industrial hemp, the economics and the health benefits.  In the next series of articles, we will explore some of the health benefits that real people are actually seeing from their use of hemp products, and profile a few of the local farmers and how hemp can help their bottom line.

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