Carrie Rengers

Hemp a potential ‘gold rush’ for Kansas farmers but questions linger

As changes are about to take effect with state and federal laws regarding industrial hemp, most people involved agree that there are more questions than answers so far.

But that’s hardly keeping farmers, processors and distributors from jumping in.

“This is like the new gold rush,” said Russell County wheat farmer Marty Radke.

He first learned about industrial hemp — which is different than marijuana but part of the same cannabis family — when he sold combines to Colorado farmers who were growing it.

Radke said one of those farmers spent about $14,000 per acre to grow hemp that yielded about $115,000 per acre in CBD oil, a cannabis compound that some people think has medicinal qualities

“That’s why it’s such a sought-after thing.”

He said there are a lot of concerns, though, including over-regulation, expense and accidental production of hemp with higher levels of THC — or tetrahydrocannabinol, the psychoactive part of cannabis — than the legal limit of 0.3 percent.

“Things can go wrong real fast.”

Congress finalized the 2018 farm bill this month, and President Trump is expected to sign it. The bill declassifies hemp as a controlled substance.

“It has a lot of major ramifications for the industry,” said Erica Stark, executive director of the National Hemp Association in Washington, D.C.

For instance, she said, “It will allow for legal banking.”

The nonprofit does not physically do anything with hemp, but Stark said, “We had our bank account shut down just because we had the word ‘hemp’ in our name.”

She said that’s “the level of insanity we were looking at.”

The bill also “will allow for crop insurance. It will allow for all types of federal grants. . . . And it will also allow for full commercial activity without the research component.”

Until now, 40 states have allowed industrial hemp production through research programs.

In April, Gov. Jeff Colyer signed a bill to allow research-based production of industrial hemp in Kansas.

On Jan. 9, there will be a final public hearing at the Kansas Department of Agriculture in Manhattan to discuss proposed regulations for the research, which will begin in time for the spring growing season.

“We’re starting from zero with a brand new program,” said Heather Lansdowne, the department’s communications director.

“It’s important to keep in mind that this is a research program, and that’s why there are so many questions. . . . The function of research is to answer those questions.”

Even though the program is a research project, it’s also a commercial venture for those who participate in that they can use any legal, commercially viable options to process and distribute the hemp.

Stark said the new federal law won’t automatically change hemp regulations at the state level. That happens only through legislation.

“I don’t think we’re going to see the full benefit of the passage of this until 2020.”

Lansdowne said passage of the farm bill means states won’t have to have research programs for hemp production.

“We are already working on what kind of state legislation will be necessary . . . now with a change in the farm bill,” she said.

“It won’t affect what we have in place. . . . It presents the possibility of change in the future.”

Excruciating pain

Rick Gash grew up on a farm but never intended to be a farmer. Then last year, he had a head-on collision.

“It just about killed me.”

Three months later, he was still on Oxycodone for a shattered femur and “excruciating bone pain.”

His wife searched for something natural to help alleviate his pain.

“CBD took that away,” Gash said. “We came to the decision to grow it ourselves.”

They’re going to use 69 acres of their Augusta property to grow hemp, and they’re going to build a processing facility as well.

Gash, who also is in sales for a custom compounding pharmacy, has started the Hemp Development Group to help himself and others navigate the state’s research program and the hemp industry.

“There’s a need for leadership and organization of this . . . at a local level,” he said. “There is a lot of unknown in the industry. . . . That farm bill will change a lot of things.”

The Hemp Development group meets at 7 p.m. every Thursday in room 2-H of St. Vincent de Paul Catholic Church in Andover.

Dana Ladner, the state Department of Agriculture’s compliance education coordinator, is speaking to the group on Jan. 31 to discuss regulations.

“We’re following the leads of other states that have gone before us.”

She and Lansdowne say potential licensees need to do their homework.

“Anyone can still apply,” Lansdowne said.

However, she said if someone wants a license for this spring and is just starting to look into it, “It’s going to be really hard for them. . . . Most people have been spending a lot of time already working on it.”

There were 75 pre-applications for licenses by a Dec. 1 deadline.

“That was just an informal process where people could get some early feedback,” Lansdowne said.

The Jan. 9 meeting is the final step before the official application process begins.

Lansdowne said applications could take up to a month to process.

“It depends on how many applications we get.”

Application fees are $200. Licenses for growing, distributing and processing range from $1,000 to $6,000 annually. There are other fees associated with hemp production as well, such as a $45-per-hour sampling fee, a $250 laboratory testing fee and a $47 fingerprint-based background check through the Kansas Bureau of Investigation.

Everyone who is going to come into contact with a licensee’s hemp production must have a background check and be included on the license. Each time a licensee hires someone new who will be working in any capacity with the hemp, there’s a $750 license modification fee.

“It’s not chump change,” said Mike Reed, who has a southeast Wichita farm and applied for a pre-application.

“It’s more of an investigative stage right now, but we feel like we’re foolish if we don’t investigate it,” Reed said.

He wants hemp as a rotational crop.

“There’s supposed to be benefits to the soil.”

Also, Reed said, hemp doesn’t require pesticides or a lot of water.

“That’s the main reason we’re looking at it.”

He called the regulations, licensing and background checks “bothersome” when other crops don’t require them. Reed said it’s not as if farmers are going to be growing marijuana.

“It is a different strain of the plant.”

He and others describe marijuana and hemp in terms of wolves and dogs. They’re both members of the canine family, but they’re two different breeds.

Reed said there are issues surrounding hemp production that the Department of Agriculture isn’t answering.

“You can’t just take this to a normal elevator,” he said. “None of that infrastructure is in place right now. . . . In my opinion, they may have gotten the cart before the horse a little bit.”

He said he doesn’t know how hemp can be sold as a wholesale product or if it can cross state lines with the new federal law.

Lansdowne said the department’s jurisdiction extends only to the industrial hemp plant parts and whatever products are produced would be regulated by the industries that cover them.

Limitless potential

Stark, with the National Hemp Association, said there are 25,000 products that can be made from hemp.

“It kind of sounds like that’s a gross exaggeration, but it’s not.”

Others call the potential limitless.

Stark said the seed is used for nutritional products because it is heart-healthy and has a high protein content.

Fiber products made from hemp include things as diverse as traditional textiles, car parts, bioplastics and biofuel.

“You can actually build an entire structure with it,” Stark said.

She said hemp can conduct electricity and create new technologies.

Then, of course, there’s the CBD extract, which Stark said is “the dominant portion of the industry now.”

She said hemp also can make existing products stronger or more sustainable.

In 2017, Stark said there were about 25,000 acres of hemp production nationally. In 2018, the total will reach about 50,000 acres. The acreage is set to exponentially expand.

“Overall, our policy is supportive of industrial hemp,” said Mark Nelson, director of commodities for the Kansas Farm Bureau.

He calls some of the fees related to the program “a necessary evil.”

“I understand the frustration with some of the fees and things like that,” Nelson said. “The program needed to pay for itself.”

While there could be great potential with hemp, Nelson said he believes that there’s no guarantee.

“There’s more that we don’t know than we do know,” he said. “I sure think that people need to go at this cautiously.”

Radke, the Russell County farmer, thinks about the risks, such as successfully growing a crop of hemp only to discover the THC level is accidentally too high. It could cost thousands — if not more.

“Something like this could have such a negative effect . . . if things go wrong.”

To him, hemp farming shouldn’t be considered different than other farming.

“I mean, you put a seed in the ground, and you do all the same techniques. . . . The end result is still the same. You want to sprout the seed and make the most use out of the plant. . . . You want to get the highest yield.”

The difference, he said, is “it may be a bit over-regulated, especially, I guess, if you have nothing to hide.”

Even so, Radke said he’s still interested.

“It’s kind of like going to the casino and gambling,” he said. “There’s a big return at the end if it all goes right.”