While hemp is still a federally illegal drug, the State of Wisconsin is taking a very proactive approach with hemp farmers and processors. In a reversal of last year, the state now allows farmers to grow the crop in Wisconsin. This is an important step towards making Wisconsin a potential hemp hub for processing and manufacturing of CBD products.
Wisconsin has seen a 40% drop in the number of applications to start a hemp growing and processing operation over the last year. In 2016, there were more than 50 applications to grow hemp in Wisconsin, but after a New Approach Wisconsin law was adopted in 2015, only 22 applications were submitted in 2016. Part of the decline in interest in hemp is due to a change in federal law, in which industrial hemp is removed from the Controlled Substances Act and given an exemption from all of the same requirements that apply to the cultivation of marijuana.
In Wisconsin, the number of cannabis growers and processors has dropped significantly this year. This is according to data from the Department of Agriculture, Trade and Consumer Protection (DATCP). Hemp growers and processors must register annually with DATCP as part of the state’s hemp research program, which is in effect until the start of the 2021 growing season. As of Monday, DATCP had received 803 applications from farmers, 83 percent of which were repeat applications. This is approximately 48% fewer applications than for all of 2020. DATCP also received 477 applications from processors, of which approximately 80% were from returning processors. This figure is 37% lower than the previous year. DATCP Secretary Randy Romanski said other cannabis states have seen a similar drop in registrations. He said there are a number of reasons why farmers and processors may not participate in the program this year, including ongoing changes to the state’s crop regulations. The federal government kept changing when this program was introduced and the states had to adapt. So I think we’re seeing some adjustment here, as in other states, Romanski said. Congress authorized cannabis production through state-level pilot programs for the first time in the 2014 U.S. Farm Bill. Federal lawmakers approved regulated cannabis production in the 2018 American Farm Bill, but officials in Wisconsin decided to wait until federal regulations were in place before moving to a permanent program. Romanski said there is still a lot of uncertainty in the cannabis market and growers and processors have yet to learn. In any case, we have seen a lot of interest in CBD in the context of cannabis cultivation. With so much interest in CBD, it makes sense that the market would adjust, Romanski said. Rising prices for corn and soybeans this year may have also prompted some traditional farmers to turn away from hemp, he added. Phillip Scott, founder of the Wisconsin Hemp Farmers and Growers Association, said the number of people seeking help from his organization has dropped about 65% this year. While he doesn’t think the CBD market is saturated, Scott says it’s hard for growers to turn a profit unless they want to process their own crop. Processors are now processing their core. There just aren’t enough wholesale and distribution buyers for our products, Scott says. Scott said changing state and federal regulations have hindered the industry’s growth. He added that many growers and processors are hoping that Congress will pass legislation allowing CBD products to be used in foods and supplements, which Scott says is the most promising new market. But he said some growers are also concerned about the transition from the state’s pilot program to federal regulation and the consequences if their crops contain too much THC, the psychoactive component of marijuana. He said current federal regulations require testing agencies to report to the Federal Drug Administration on any plant experiencing excessive heat. If I have a plant in my field that exceeds the (legal limit for THC content), the DEA comes knocking on my door, Scott said. That’s a scary thought. If you’re doing it right, you shouldn’t have these fears, but you do. According to Scott, the reduction in the number of farmers this year will affect the future of the industry by reducing the amount of data available to agricultural researchers and legislators.