Small NY hemp growers feel the pinch of regulations, fees

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Jeanette Miller says she’s one of hundreds of farmers who were encouraged to devote acreage to an up-and-coming crop that held promise, but is now watching it all slip away.

Miller, who operates Eclectic Farmstead in Newfane in western New York, said farmers spent upward of $50,000 to cover costs associated with growing hemp and were waiting for the research phase to end so they could sell their products, which include drinks, soaps and lotions.

“We were supposed to be released from being research partners and be able to sell our products,” said Miller, who also serves as vice president of the Niagara County Farm Bureau. “But instead of that happening, (New York state) came out with the Hemp Extract Regulation.”

 
 

The new rules had a chilling effect on the small farms and businesses that invested after passage of the federal Agricultural Act of 2014, which allowed schools and farmers to grow the crop for research purposes, and the 2018 U.S. Farm Bill, which made the production of hemp legal.

It was their work that the hemp industry was built on, Miller said, and now they’re being taken out of the picture.

Application and licensing fees

The issues that Miller and other growers have with the regulations are many, but the high fees for a processing license — which needs to be renewed every two years — as well as non-refundable application fee for the licenses and hefty-priced sales permits that make no distinction between small and large farming and distribution operations, are all good places to start.

“If I go to five farmer’s markets, plus have a farm stand on the land, and also sell online, that could be six retail licenses that I have to pay $300 for,” Miller said. “That hasn’t been clarified yet. ... I’m paying $300 per location, but so is Wegman’s, which is a huge multi-million dollar company.”

Per regulations, hemp processors must pay a $1,000 non-refundable application fee and a $4,500 license fee. For those who would only manufacture, a $500 non-refundable application fee and a $2,000 license fee are paid. Retailers must pay a $300 retail license fees.

The hemp flower

Another issue that is leaving growers helpless is regulations on the hemp flower. It is the main part of the plant, but because it can be smoked it’s against health regulations, Miller said.

 

“What they’re not taking into consideration is that many people who use the flower do not use it to smoke, they use it to infuse products,” she explained. “Infusing is like sticking it into a jar with oil or alcohol and letting the properties soak.”

The end product can be used as a topical application on the skin, or can be ingested — hence hemp snacks, hemp drinks, hemp soaps and hemp lotion.

The flower is not something to get high on and does not contain THC, according to Miller.

“When you infuse a flower you’re getting a whole spectrum of product; that means it has all the cannabinoids (CBDs), but also terpenes, which is a flavor profile that also produces wellness benefits. Like lavender, and how they say it produces relaxation and aids sleep,” Miller said. “Different strains of hemp have different terpenes so when you’re infusing a product, you’re getting all of that.”

The hemp flower, under the Hemp Extract Regulation, can only be sold to a processor, not infused by the farmer, and at this time no processor is buying flower at a reasonable price. Miller said growers could pay producers and manufacturers to make the flowers into products.

 

“A pound of flower biomass is only being sold at $4, which is disgusting because the processors can take that pound and turn it around to $1,500 or $2,000 after they extract it into a concentrate and then make their own products from it that they can sell,” said Miller.

Lack of representation

Miller charged in a letter to the state Department of Health that most small and rural businesses that will be affected by the Hemp Extract Regulation were not contacted before the rules were adopted.

“Public hearings should be held to give small and rural businesses the best opportunities to address the department, as it was made apparent in my conversations with hundreds of small business,” Miller wrote. “A large percentage of them were completely unaware of these proposed regulations and how the proposed regulations would affect their businesses.”

While New York Farm Bureau is the state’s largest general farm organization, it was not contacted, Miller said, nor were any of the existing hemp research partners that she communicated with.

“They only reached out to one group, the New York State Cannabis Growers and Processors Association, for recommendations and comments, which has only 15 to 25 members,” Miller said. “This is not a factual representation of the percentage of farmers, farm businesses, small businesses, rural businesses or small education related businesses impacted.”

A different perspective

Not every hemp grower in Niagara County is against the regulations.

Tom Szulist of Singer Farm Naturals, a 22-acre organic farm, retail and education venue in Appleton, said that while he understood the situation small farmers were having with the state’s regulations, he didn’t get into farming for the money.

Szulist was at one time a stockbroker and part of leaving that life behind was focusing on growing healthy products that would help people with pain, he said. To this end he sells products made from what he grows: cherries, garlic and hemp.

Szulist said the purpose of growing hemp is to bring medicine to people.

 

“We harvest product, then get a lab report immediately to show it’s got less than three tenths THC,” he said.

After harvesting, Szulist pays a processor and a manufacturer to turn his crop into CBD products which are then brought back to his farm for sale.

“We have people come in here and they just tell us their stories about how they couldn’t sleep and, all of a sudden, they’re able to get their sleep cycle back in whack,” he said. “When the body has post-traumatic stress, there’s this electrical circuit firing over and over again in the brain. ... CBD allows those receptors to try to balance any systems that are out-of-whack. It tries to relieve those symptoms.”

Meanwhile, Miller and other small hemp growers across the state feel betrayed.

“Hemp is no longer a Schedule 1 drug, it’s a FARM CROP much like hops,” wrote Gina Miller of Miller Organics-HEMP Flower POWER, a growing operation in Orleans County. “Unfortunately NYDOH is treating hemp like schedule 1 marijuana. The prohibition of hemp flower is critical to financial solvency for farms like me. These regulations are literally eliminating our hemp farming opportunities.”

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