As in much of Vermont, some farmers in Charlotte and Hinesburg may have tossed the dice, drawn to an inside straight, gone all in – maybe even have bet the farm – on growing hemp for CBD production.
“It’s a modern-day agricultural gold rush,” said Heather Darby, UVM extension professor of agronomy. And like a gold rush, some farmers will probably strike it big on hemp, but some may not.
Although hemp can be grown for many purposes other than CBD (or cannabidiol – a chemical compound found in hemp which is nonintoxicating but which many tout for beneficial effects such as pain relief), not many farmers are growing hemp for any other purposes. Around the country, probably 90 percent of the land planted in hemp is planted for CBD.
“Probably it’s more like 99 percent in Vermont,” said Darby.
She’s heard that 4,000 acres is planted in hemp across the state and called it the “high-value, low-hanging fruit.”
“Absolutely, there will be people who will make boatloads of money,” Darby said. “It feels like there’s a ton of uncertainty right now.”
But the uncertainty may be over soon. She said that the story of what growing hemp for CBD has meant to Vermont farming may be told in a month or two when the crop is harvested.
CBD hemp farming in Charlotte
South of Charlotte on the west side of Route 7 at Thompsons Point Road, Randy Longe is partners with his son-in-law Christopher Mack on 65 acres of hemp they’re growing for CBD production.
Longe said that they are learning much this first year. They are growing several different varieties to see which does best.
A very cooperative spirit has prevailed this first year among famers growing CBD hemp. “Everybody’s learning and everybody’s sharing,” Longe said.
He expects they will start harvesting their hemp in about three weeks. Recently, someone made them an offer to buy their crop as it is. They declined.
The enthusiasm for growing hemp for CBD has already had an impact on Vermont farmland. A lot of land that was in hay has been tilled up because farmers have heard estimates that they could make $20,000 – $40,000 an acre from growing CBD hemp compared to around $1,000 an acre for growing fiber or grain, said Darby.
“I feel like I’m on a roller coaster,” she said. “I’m never shocked any more when I hear someone was offered this much money or paid this price.”
One of the unknowns is whether everyone will find somewhere to process their crop to take out the oil. There is a lack of processing capacity at this time, but new processors are going in, Darby said.
Longe said that the higher the percentage of CBD in the oil, the higher price the crop will bring. They’re hoping for 10 percent or higher, but in the infancy of this market, they don’t know which species will yield the highest CBD. They also don’t how much they’ll get even if they harvest a crop with a high percentage of the CBD.
“I can’t say how much we’ll make off this crop because the prices haven’t been set,” he said.
An evolving industry
Like many cottage industries, the hemp industry will likely evolve.
“Hemp has more than CBD yet to be discovered,” Darby said.
And CBD is only one type of cannabinoid that is derived from hemp. There are over 100 cannabinoid oils. While many of them have yet to be researched, some have beneficial effects including treating pain, anxiety, depression, acne, psychosis and reduce the negative side effects of cancer treatment.
The uses for CBD may also increase as more research is done. She pointed out that the first medically approved medicine containing CBD just went on the market last year.
“We know very little. It’s been illegal, so it really hasn’t been explored,” she said. “As we learn more about the compounds that are in hemp, there will be an evolution of new markets.”
Darby predicts that as the infrastructure for CBD grows, the cost of growing and producing will go down. As the price of production goes down, she expects the prices that farmers get for their CBD oil will drop.
If the price that CBD brings goes down, farmers may diversify into growing hemp for other purposes such as food oil, hemp seed meal, fiber for cloth and paper.
A hemp seed crushing and protein processing facility that was being developed in Middlebury by Victory Hemp Foods of Kentucky announced that it was shutting down in July.
The oil or meal that is yielded by crushing the seeds can be used as a dietary supplement. It is high in omega-3 and protein.
Founder and CEO of Victory Hemp Foods Chad Rosen said that his company was recruited to Vermont by a group of farmers, but they have all changed their minds and dedicated their crop to CBD production.
“I’m happy to talk to farmers up there,” Rosen said by phone from Kentucky. In a release, Victory Hemp Foods said that it expected as hemp production increases “there will be a shift to multi-use crops that yield grain, fiber and CBD.”
The magic word in marketing
Hemp is the magic word in agricultural marketing right now, said Darby. She compared it to the word ‘baby,’ saying that anything with ‘baby’ on it costs more. A sunblock, that may not be much different than other sunblock and sells for a few dollars, “it seems like it goes up to $50” when ‘baby’ is on the package.
“The price of everything goes up when you say ‘hemp,’” Darby said. “Land that used to go for $25 an acre is going for thousands of dollars.”
On the economic downside for the farmer, the cost of growing CBD hemp is high. It’s very labor intensive and risky. While it’s growing, the plants need to be pruned to make them grow bushier with less stalk. Once it’s harvested, it has to be dried and that takes a lot of space, Darby said.
But the upside for the economy in general may be an increase in employment. Longe said that if production goes well this first year, they might employ eight people year-round and 20 people during the spring and the fall for the planting and harvesting seasons.
Longe is renovating a modular tobacco drying facility roughly the size of a tractor-trailer and Mack is adapting an approximately 25,000 square-foot building on Ferry Road in Charlotte for drying the hemp.
On the environmental downside, Darby said that not everyone is growing it with an eye on environmentally sound sustainable agriculture. And, as always, crops should be rotated.
Marty Illick, executive director of the Lewis Creek Association, has bemoaned the influx of hemp planting because it’s another row crop like corn that ultimately increases water quality problems for Lake Champlain. She says the predominantly clay soil in this area means that fertilizer runs off with the rain quicker with little chance to soak in and the phosphorus in the fertilizer doesn’t go away.
Longe said that their crop is organic and they’re not using pesticide, although it’s not listed as organic this first year. He believes the property they are farming will be listed as organic next year.
Vermont is seeing an influx of investment from out of state because agricultural land is cheap compared to elsewhere. And the state has made hemp accessible to everyone, while some states have limited permits.
“Vermont is very excited about hemp,” Darby said.