Virginia farmers see lots of promise in hemp, though uncertainty around economic benefits remains

While the legalization of marijuana in the commonwealth remains elusive, potential economic benefits may persuade Virginia legislators to lift restrictions on the plant’s cousin, hemp, bringing the state in line with new federal regulations. 

The 2019 session of the General Assembly saw the filing of five new bills that would remove barriers to the cultivation of industrial hemp in Virginia. Three are still alive, including a proposal by Del. Daniel Marshall, R-Danville, to, among other things, abolish the state’s existing industrial hemp research programs and allow farmers to grow the crop independently in conformity with the new federal Farm Bill. A similar bill by Sen. Frank Ruff, R-Mecklenburg, is before the full Senate. 

But even as some farmers seem ready to hail hemp as the tobacco of the 21st century, promising struggling enterprises a financial windfall, uncertainty about what exactly the economic payoffs of the crop will be remains.

“There’s a number of issues for growers. There may be wild returns for these people and great reward, but there’s almost certainly plenty of risk,” said John Fike, an associate professor with Virginia Tech’s Department of Crop and Soil Environmental Sciences and one of the primary researchers of industrial hemp in the commonwealth.

“There’s a lot to shake out in the industry to determine how this is going to be done,” said Fike.

‘A valuable opportunity for Virginia growers’ 

Grown in the United States until the 1950s, industrial hemp comes from the same species of plant as marijuana, Cannabis sativa. However, as a June 2018 report from the Congressional Research Service explains, the two “are genetically distinct forms of cannabis that are distinguished by their use, chemical makeup, and differing cultivation practices in production.”

Although the federal Controlled Substances Act of 1970 effectively made it illegal to cultivate industrial hemp for any purpose in the United States, the plant is widely used nationwide for a variety of applications, including textile and paper production, construction materials, health care and beauty products and animal feed.

In 2017, according to figures from the Congressional Research Service, the United States imported $67.3 million worth of industrial hemp seed and fiber — down from a record of $78.1 million in 2015 but far above the 2005 level of $5.7 million. The Hemp Business Journal, an industry publication that aims to inform readers about how hemp “can be used as [a] foundational crop for economic, social and environmental progress,” estimated that in 2017, sales of hemp-based products in the United States amounted to $820 million.

Currently, about 90 percent of U.S. imports of hemp come from Canada, which began issuing commercial licenses for its cultivation in 1998. Other major suppliers are China and Romania.

“In general, industrial hemp is a dual-purpose crop that not only produces valuable fibers, but also oil-rich seeds with many end-uses,” Virginia Farm Bureau national affairs coordinator Ben Rowe wrote in an email.

The Virginia Farm Bureau has come out in support of legalizing production of the crop in the commonwealth.

But although Rowe characterized the crop as “a valuable opportunity for Virginia growers,” he was also quick to add a caveat: “Because it is a new and emerging crop, we do not have specific numbers on the economic impact it will have specifically to Virginia.”

That sentiment was echoed by Elaine Lidholm, director of communications for the Virginia Department of Agriculture and Consumer Services, who described the effort to quantify hemp’s potential economic impact as “not as easy as it might appear.”

In Virginia, research on that question has been ongoing since 2015, when the General Assembly established the Industrial Hemp Research Program in response to changes in the federal farm bill.

These new provisions not only legally distinguished hemp from marijuana based on concentration of delta- tetrahydrocannabinol (THC) but also cleared the way for the cultivation of industrial hemp under the oversight of the state Departments of Agriculture and Consumer Services and institutions of higher education.

A ‘three -F crop’

In the commonwealth, hemp research by Virginia Tech, Virginia State University, James Madison University and (starting in 2016) the University of Virginia has found that, ironically, hemp’s very versatility may get in the way of a smooth rollout of the plant as an important new commodity.

Fike called industrial hemp “a three-F crop,” referring to the three outputs of feed, fiber and flowers that it can be grown for.

“Feed” refers to hemp seed, sometimes called hemp hearts, which is largely used for health and beauty products, as well as in animal feed.

James Madison University is also studying the use of the seed oil for the production of biofuels.

Hemp fiber typically goes into textile, paper and other industrial production, including “hempcrete,” a composite construction material, while the “flower” is used as a source of cannabidiol, the trendy “CBD oil” increasingly seen in cafes and health stores. This fall, Virginia began taking steps to regulate CBD oil sales.

However, Fike cautioned, while hemp’s range of applications is vast, each output requires different modes of cultivation and processing by the farmer.

Flower cultivation in particular is highly labor intensive, requiring processing akin to that needed by the notoriously backbreaking tobacco. Hemp seeds can shatter easily in dry temperatures, leading to high loss rates, and their high-fat, high-protein, high-fiber composition means that they have to be handled differently than soybeans or grains like wheat.

Perhaps most glaringly, when it comes to producing hemp for its fiber, Virginia completely lacks infrastructure. The closest processing facility that can handle hemp fibers, Sunstrand, is located in Louisville, Ky., some 250 miles west of Virginia’s western border, although JMU’s Breeze newspaper reported in November that the recently established Virginia Hemp Company plans to open a processing facility in the Shenandoah Valley in fall 2019.

“Until we get processing facilities, we’re not going to make much hay on fiber,” said Fike.

Other question marks include the price of seed, the sale of which was subject to regulatory oversight by the U.S. Drug Enforcement Agency until the December 2018 passage of the federal farm bill; crop yields; and what varieties of industrial hemp are capable of flourishing in Virginia’s different regions.

“Cultivars adapted to Virginia are yet to be identified or developed,” Virginia State University Dean and Director of Agricultural Research Wondi Mersie wrote in an email.  JMU biology professor Michael Renfroe warned in an August 2018 report to VDACS that “individuals that think any field or site can be converted to hemp production are likely to be disappointed.”

Nevertheless, interest in the crop has been widespread, with Rowe reporting that the Virginia Farm Bureau has heard from farmers from all regions of the state, with Southside farmers “seem[ing] particularly interested in the opportunity to grow and process industrial hemp.”

This February, that region, which has been seeking to diversify its agricultural output since the decline of the tobacco industry, will play host to the second Industrial Hemp Summit in Danville, which will address supply chain and market issues related to the plant.

As the General Assembly prepares to weigh the merits of lifting state restrictions on hemp to match the changes at the federal level, Fike is hoping to see more funding channeled into research on the crop’s potential in Virginia. While 2018 saw the most acres of hemp planted in the commonwealth since the 1950s, unusually heavy rains complicated studies of the crop, hampering researchers’ efforts.

“I don’t [have] that kind of pie-in-the-sky view that hemp is going to save all our farms and is going to be productive on all farms. Those are gross misunderstandings,” said Fike.

Still, he conceded, in the long run, “it’s likely to be a viable and financially successful enterprise.”