State News
November 29, 2018

Enthusiasm over CBD helps fuel growing hemp market in Vermont

By Anne Wallace Allen/VTDigger

The number of farmers who registered with the state of Vermont to grow hemp rose more than 400 percent from 2017 to 2018, according to the state Agency of Agriculture. The amount of acreage reported to be under cultivation increased 450 percent, with growth spread fairly evenly around the state.

Hemp cultivation has risen rapidly where it is allowed on the trail of the huge market for CBD, or cannabidiol, a product of the hemp plant that is widely believed to have health-giving benefits.

In 2017, 87 Vermonters paid $25 to sign up under the hemp farmer registry authorized by the Vermont Legislature in 2013. So far in 2018, 450 people have registered, said state officials. The 2017 registrations involved cultivation of 550 acres; the 2018 registrations cover more than 3,000 acres, said Stephanie Smith, the Agency of Agriculture’s chief policy enforcement officer.

The 2013 Vermont law on hemp stipulated that the registry was intended to identify “legitimate farmers wishing to grow hemp as fiber, food/forage, and oilseed crop” as opposed to farmers wishing to grow a different variety of the cannabis plant, marijuana.

The law laid out some rules regarding THC, the compound that has psychogenic properties, saying farmers couldn’t grow it, and might be prosecuted if they did. But so far, there’s no mechanism for the agency to check on that part of the program. Some cultivation of marijuana is allowed for non-commercial purposes in Vermont.

Vermont officials and private businesses have rapidly latched onto the economic promise of CBD oil, which is produced from hemp. About a month ago, the new company Northeast Processing started processing hemp at the former bread factory it purchased and renovated in Brattleboro.

The company’s two founders, CEO Carl Christianson and Chief Development Officer Noah Quist, acquired much of their equipment in western states where recreational cannabis and hemp have been available for a few years. The two said their facility will ultimately be capable of processing about 400 pounds of hemp biomass every day.

For now, the company is working only with Vermont-grown hemp, but Christianson said the pair is starting to talk to farmers in New York and other states.

“We’ve had people reach out to us from all over the U.S. and even Europe, and we had someone reach out to us from Greece for processing and to sell us their biomass,” Christianson said.

A focus on Vermont’s reputation

The 2014 federal farm bill gave states some limited leeway to start industrial hemp production programs. It’s not yet clear how many farmers will choose to grow hemp, or what will happen to prices. The Vermont Agency of Agriculture is getting around that uncertainty with the same approach to competition that it brings to all of the commodities grown in Vermont: by focusing on Vermont’s niche and reputation.

“What we are trying to do here through the agency is make sure we protect the Vermont brand,” said Agriculture Secretary Anson Tebbetts. “We’ve done it with cheese, with maple, and now we’re going to do it with hemp. We’ll make sure they know when they are buying a hemp product from Vermont, there’s quality behind it.”

The agency will soon have a separate registration form available for hemp processors, Smith said. Anyone in possession of hemp is required to register.

Although many business analysts have made statements about the size and the future of the CBD business, that market, too, is much too new for forecasting. Despite the lack of clear data, some banks and credit unions are now making loans to CBD businesses. Christianson and Quist started the business based on what they were seeing in Vermont.

“One article will state it will be $20 billion by 2020, and another $2 billion,” said Quist. “From inside the industry, we’re finding that general business tenets just don’t exist. Pricing is all over the board, depending on who you want to talk to. There are so many people wanting to get themselves in the market. We just kind of block out the noise.”

“We’ve had no shortage of people supplying us biomass, and also no shortage of people approaching us for purchase contracts, even in the infancy of our business,” Christianson said. “We feel that the market is continuing to validate itself. Obviously there’s a risk associated with it, but any metrics we have found that are looking at forecasts of this industry are showing growth.”

Whatever happens on a national or international scale, Tebbetts said he sees hemp as a way for Vermont’s farmers to diversify. According to the agency, the largest grower registered with the state right now is Gregory Markowski, with 274 acres in Florence.

“We’re not going to have this huge industrial commodity in Vermont; the landscape is not going to go that way,” Tebbetts said. “It may happen in Kentucky, in New York, but we’re going to be small farms growing a few acres.”

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