A drop in CBD oil production in Kansas appears to be causing a huge reduction in the number of farmers growing hemp.
When the state launched its program to oversee the newly legalized crop in 2019, more than 200 farmers signed up. This year, only 41 secured licenses from the state to grow it.
Before the drop in demand, most Kansas hemp was used to make CBD oil, a product used for health purposes and as an additive for food.
But industrial hemp experts say there is still a growing market for other hemp products — like fiber for clothing and grain for animal feed.
“There's been a reduction in the number of growers and the number of acres on the CBD side,” said Sarah Stephens, CEO of Midwest Hemp Technologies in Augusta, Kansas. “But there's been an increase in the number of growers and number of acres on the fiber and grain side.”
Hemp is related to cannabis, but hemp varieties have very low levels of the psychoactive compound THC.
The U.S. government legalized growing hemp in 2018, effectively making cannabidiol, or CBD, legal in all 50 states. The following year, Kansas began regulating the crop and a rush of farmers registered to grow it.
Supporters of hemp hyped it as a promising crop because of the popularity of CBD oil, especially in states that have not legalized medical or recreational marijuana use.
But the demand for CBD appears to have dropped off, and with it the need for hemp plants to produce it. The Kansas Department of Agriculture reported 90% of hemp produced in Kansas between 2019 and 2020 was used for CBD oil production. This year, that’s dropped to less than 5%.
Deputy Agriculture Secretary Kelsey Olson said the first few years of hemp production in Kansas were propelled by a strong CBD market. But since that time, more states have legalized the use of recreational marijuana, including neighboring Missouri. Now only a handful of states like Kansas completely prohibit the use of marijuana.
Legalized products made from marijuana may be more enticing than CBD to some customers.
“The landscape has changed over the last few years across the country,” Olson said, “I think that may have shifted some of the use.”
But the farmers and processors who have stuck with the crop contend that there is still value in other hemp markets. The plant’s fiber can be used for everything from clothing to biodegradable plastic alternatives.
Melissa Nelson is the co-owner of South Bend Industrial Hemp, a processing facility in Great Bend, Kansas. She said her business ignored the CBD fad and focused on processing hemp for fiber. The biggest market she sees now is using hemp stalks for stronger animal bedding than the standard straw bedding.
That decision appears to have paid off. Despite the drop in hemp farmers statewide, Nelson said her business continues to grow.
“More farmers,” Nelson said, “are growing for fiber and grain production instead of cannabinoids.”
Stephens said there are also hemp markets that Kansas farmers are not yet capitalizing on. For instance, Stephens said health food stores sell hemp grain food products. But not enough U.S. farmers are producing the grain needed for those products, so they are mostly imported from Canada.
To counteract that, Stephens said she’s part of a group of Kansans hemp producers working to educate farmers on the unlocked potential of the fiber and grain markets. If successful, Stephens said Kansas could become a major producer of the crop.
“We have the right landmasses,” Stephens said, “the right farmer know-how, the right seasons and temperatures to lead in this industry.”
Dylan Lysen reports on politics for the Kansas News Service. You can follow him on Twitter @DylanLysen or email him at dlysen (at) kcur (dot) org.
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