Industrial Hemp May be Profitable for NC Farmers, Doesn’t Get People High
By Kay Whatley
Edited by Warren Williams (NCIHA), Kim Beaver, and Nicole Banks
Before farmers can get industrial hemp seed in the ground, or even determine what their costs and potential profits might be, a state Industrial Hemp Commission has to be formed, and North Carolina state law requires that private funds are required to form the Industrial Hemp Commission. It will then be the responsibility of this Commission to create the rules, regulations, application process, and provide licenses for the pilot program. The North Carolina Industrial Hemp Association (NCIHA) is working now to collect the funds needed to create the Commission.
NC crop farmers have been through ups and downs in recent years. There is still growing of cotton and tobacco, some farmers have tried growing corn for ethanol, others have leased their fields to minimize their own losses, while still others have stopped farming their land. What farmers need to know about industrial hemp is, could growing it sustain their farms? To determine this, farmers need to know how much it will cost, and what manufacturers are in place to use their harvest and allow them to realize profits instead of losses.
Before anyone can hit the fields, the Commission has to set rules and avoid any federal prohibitions regarding importing and exporting across state lines — or across the world. Then farmers will know when they can plant, processors will know how to handle harvests, manufacturers will know when they can make NC-Hemp products, and stores can plan to stock NC-hemp products for sale to the public.
Industrial Hemp Uses and A Little Bit of History
Industrial hemp has been used for centuries across the world, and in the early centuries of the US. Historical uses included clothing and rope. Hemp could be grown by anyone, across the nation. It was just one of many crops produced across the growing nation, by settlers and natives.*
When marijuana was banned (federally) as a drug, its cousin industrial hemp was banned too. This article won’t explore the “why” or “who” of that decades-old action.
Instead, look at how industrial hemp was used prior to the ban. The plant’s fibers are strong. The US military grew hemp, or rather had it grown, to use in producing military ropes.
Newer uses include high-protein hemp seed in food, extracted oils for medicines, bio-fuels, and processed building and paper products. Paper and building products made from hemp have potential on two fronts. The first is profit to farmers and processors from the hemp. The second is replacing the destruction of forests — which can take decades to re-grow — with industrial hemp which grows quickly in a year. For NC farmers who are interested in profits and the sustainability of the planet, both of these fronts are important.
hamstringing: a reference to the cutting of a group of tendons behind the knee to cripple a living thing, used to describe undermining of a person or plans.
Legislative Limitations
Before farms can put together crop plans, the NCIHA has to raise funds to create the Commission, and provide those funds to the NC Department of Agriculture who then puts Commission members in place, so the Commission can set the rules for farmers. Once these steps have been completed, there can be seed acquisition, crop planting, harvesting, processing, and selling.
NC legislators wrote into NC Senate Bill 313 (SB313) that $200,000 in private funds must be raised to support the Commission. While not necessarily added to the law as a delaying tactic, it ends up being one — by forcing $200,000 to be raised from private donations before farming can begin.
“§ 106-568.54. Limitations. The Commission shall not meet or undertake any of its powers and duties under this Article until it has obtained funding from sources other than State funds of at least two hundred thousand dollars ($200,000) to support operations of the Commission. Funding from non-State sources for the Commission’s activities may be returned to the donor or funder if not spent or Page 4 Session Law 2015-299 Senate Bill 313-Ratified encumbered within 12 months, upon request of the donor or funder. Non-State funds donated and carried over at the end of the fiscal year in which they are donated shall be retained and remain eligible for expenditure in the following fiscal year.”
Without these limitations, the Committee could have started work immediately, and the growers could have started making plans.
Through the NCIHA, fundraising is under way to reach that $200,000 goal set by state legislators. To donate, or become a member, or potential future farmer, visit ncindhemp.org. At present, the hope is to get the Commission funded in time for a 2016 growing season.
Growing of industrial hemp is not the same as growing marijuana, its cousin which contains THC and gives people a euphoric, peaceful feeling when smoked or eaten. Growing marijuana is illegal on the state level, as well as federal. Industrial hemp growing was made legal in NC just a short time ago — Fall 2015. It is still illegal on the federal level, despite its inability to produce a “high”.
Farming NC Hemp
Right now, one of the options for NC farmers interested in producing industrial hemp is to join the NCIHA as a Member. Once the NCIHA’s donations reach $200,000 and the Commission can be formed, procedures for farming can be prepared. So, for now there is little guidance for interested farmers unless you contact the NCIHA for further information.
For hemp farming licenses, the NC Legislators have built fees into the law — an initial rate of $250 per year plus $2 per acre — and it is likely the Commission will begin growing at these rates. Those fees may seem high compared to the fee-free growing of tomatoes or cotton in NC; however, those rates are half of what is charged for industrial hemp in Colorado. (See this Colorado industrial hemp application listing their fees.) Farms are growing without fee in other states, including South Carolina. In neighboring SC, growing fees are written into the law; however, no state agency is collecting any fees, so some farmers have begun growing, legally, with no way to apply or pay any fees.
Anyone donating to the NCIHA will receive direct instruction about the License Application Procedure Process (LAP Process) once that process can be established. If a farmer joins the association as a voting member, which costs $250, the association plans to provide the farmer with direct instruction on how to legally obtain seed, sell harvests, and other supply chain details. NCIHA also plans to provide assistance learning to grow and sell within the bounds of NC law.
Processing NC-Grown Hemp
Farms of all sizes need to be profitable enough to take care of the farmer, their family, their workers, and the crop’s needs. Before NC farmers can put together crop plans, get direction on how to legally “import” seeds from other states, contract with processors, or find companies to use their harvested/processed product, the NCIHA will work with the Commission to help put rules in place. Along the way, purchasing, processing, transporting, and exchanging funds have to have clear rules.
Hemp products bought in the US may have been manufactured from hemp fibers and seed grown in other countries — federal law prohibits growth here, but allows import of hemp ingredients for manufacturing products. Hemp is used in food, clothing, and medicine across the US, with hemp products for sale in stores. Stop by the local health food store and pick up some hemp-seed snacks. Or, stop by a beach clothing store and pick up a shirt made, in whole or in part, from hemp fibers. Building products and even car bodies are made using hemp. It may be processed into a bio-fuel to run machinery. Medicinal oils are used to treat health issues, and a few are legal even in NC.**
Once hemp is grown in NC, processing each farm’s harvest, turning plants into shirts or paper or something else, comes together. Hemp, Inc. is already banking on NC farmers. Through their subsidiary, Industrial Hemp Manufacturing, LLC, a hemp processing plant will be based in Eastern NC’s own Spring Hope, a town in Nash County. Hundreds of jobs are expected to be created in this processing plant.
Once rules are established and supply chain built, industrial hemp will follow a path similar to cotton, traveling from field to processor to manufacturers to customers. NC farms could begin providing the ingredients for existing products as well as new local products. Manufacturers may prefer the fresher, NC-grown ingredients to overseas unknowns; especially if NC grows without chemicals, as hemp is a weed-y plant and doesn’t require much in terms of pest control.
Ed. Note: And certainly, hemp is for “hippies” — for everyone — as clothing, paper, rope, building materials, and other products!
Where Does the Commission’s Formation Stand?
According to NC SB313, the Commission will be made up of five members:
(1) The Commissioner of Agriculture or the Commissioner’s designee, who shall serve as vice-chair.
(2) One appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121, who shall at the time of appointment be a municipal chief of police.
(3) One appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121, who shall at the time of appointment be an elected sheriff or the sheriff’s designee.
(4) One appointed by the Governor who shall at the time of appointment be a full-time faculty member of a State university who regularly teaches in the field of agricultural science.
(5) One appointed by the Commissioner of Agriculture, who shall be a full-time farmer with at least 10 years’ of experience in agricultural production in the State. (b) Terms of Members. – Members of the Commission shall serve terms of four years, beginning effective July 1 of the year of appointment, and may be reappointed to a second four-year term. The terms of members designated by subdivisions (a)(1), (a)(2), and (a)(4) of this section shall expire on June 30 of any year evenly divisible by four. The terms of the remaining members shall expire on June 30 of any year that follows by two years a year evenly divisible by four
Up to two paid staffers are allowed under the law to assist the Commission, no more. Total expenditures of these seven people, under the law, are estimated around $200,000. So, that is where the number came from for the NCIHA’s fundraising. It should be enough to cover initial expenses of the Commission’s creation.
Until fundraising reaches that level, NC industrial hemp growing is on hold.
More Resources
For more information, updates on commission formation, to donate, or become a member, visit ncindhemp.org/projects.html. As it states on their website, the NC Industrial Hemp Association has just one project now: raising funds that the legislators are requiring them to raise from private donors. They are working directly with hemproadtrip.com to have an awareness campaign at NC State University, and a large meeting at the Spring Hope decortication facility. Both meetings will likely occur on February 15, 2016 and details will be available on ncindhemp.org when plans have been finalized
For more information on Hemp, Inc. and their subsidiary, Industrial Hemp Manufacturing, LLC, visit hempinc.com.
To read more about the NC Senate Bill 313 (SB313), visit the NC Legislation website.
To see more on the history of hemp, including US farmers George Washington and Thomas Jefferson, visit the Wikipedia page.
See the Farm Bill of 2014 that allows industrial hemp at www.votehemp.com/PR/2014-02-07-vh_farm_bill_signed.html.
* In Western Pennsylvania, there is a township named Hempfield, where even the high school is named Hempfield, and the area is rumored to still have wild-growing industrial hemp left over from the mid-1900s when the military used hemp fiber.
** Note that medicines may be produced from industrial hemp plants, or from its cousin the marijuana plant, or from non-natural synthetics produced in a lab.
