Hemp legalization could mean big business for Montana

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Hemp is poised to grow into a major industry in Montana.

After President Donald Trump's signature decriminalized hemp cultivation Thursday, Montana is looking at what could be a big market — from pharmaceuticals to animal feed — said Ben Thomas of the Montana Department of Agriculture.

“This removed a lot of the restrictions around the market,” Thomas said.

Until now, hemp cultivation was limited mainly to research and pilot programs. 

But the 2018 Farm Bill removed industrial hemp from the federal government's list of controlled substances, which Thomas said could rapidly change the market for hemp products over the next few years. And, as a high-quantity hemp producer, Montana could also serve as a backdrop for research and development of new CBD-based drugs and drug manufacturing. 

One of Thomas’ goals is to attract pharmaceutical companies to Montana. Hemp contains cannabidiol, an oil extract that can be used to treat epilepsy and other neurological conditions. The oil can also be used to treat a variety of other ailments, although that has not been proven by the Food and Drug Administration.

“The FDA could do anything with CBD oil as far as regulations,” said Cort Jensen, chief attorney for the Montana Department of Agriculture.

Jensen said one thing the farm bill called for is a two-year study on pesticides and hemp. This likely will result in more food-safe pesticides. He said there will probably be a push to have the FDA make moves toward approval of animal consumption of hemp.

Montana was neck and neck with Colorado for hemp production in 2018, Thomas said. The state could even be considered the highest producer of hemp, depending on how the production is counted; raw weight, acres planted or acres harvested.

“Our plan won’t change dramatically,” Thomas said, regarding the legalization. Hemp growers will still be bound by state law and will have to be licensed through the Department of Agriculture in order to legally grow hemp.

“The department will be particular about what hemp varieties are grown,” Thomas said.

Dry weight cannabis containing less than 0.3 percent of psychoactive THC now classifies as hemp and will no longer be regulated by the DEA, according to Jensen.

Hemp grown on tribal reservations will be an exception. Tribal governments will have jurisdiction on legality and varieties of hemp grown within reservation boundaries.

Thomas said the DEA’s requirement for hemp farmers to be fingerprinted could be lifted, although this has yet to be determined.

A bigger change is that hemp seeds can now be sourced from anyone licensed in Montana. Previously, farmers could only obtain seeds through the Department of Agriculture. Now, licensed third parties will be able to sell seed.

When asked if the new rules governing hemp will make it easier to be licensed, Thomas said, “I don’t think getting a license is hard now.”

Thomas said the state has seen a lot of growth in its pilot hemp program and the department expects to see a lot more growth.

Kim Phillipsa Helena Valley hemp farmer who fought for her rights to federal irrigation water, is one such member of the state’s pilot program.

Though Phillips was excited that the crop is now legal, she doesn’t expect much in her day-to-day life to change. Her seed will be approved by the Department of Agriculture and she will continue her relationship with Montana Tech.

For Thomas, the biggest question moving forward is how much hemp processing will happen within Montana’s borders. It is Phillips' goal to process hemp locally and keep the business and value in-state.

“Part of the whole thing this plant has to offer is its environmental benefit," Phillips said. "The further it gets away from its source, the less that benefit is." 

Phillips is moving forward and expanding in her third year of growing. She will proceed carefully, not planting more than she can reasonable recoup. Phillips is currently working with people who want her hemp hurd for animal bedding and cold-pressed seed for biofuel.

“I’m shooting for several different plots," she said. "Maybe a total of 100 acres.” 

Phillips said she believes the research and verified data Montana Tech produces will help encourage company investment in the product. She said this research is integral to building the complicated infrastructure around hemp.

When asked about her struggle for water rights, Phillips said she was glad she went through that ordeal.

“There was a whole year in there where Sens. Steve Daines, Jon Tester and Mitch McConnell (Kentucky) were aware of it and it gave them an opportunity to talk about it,” Phillips said. “It helped push the conversation forward.”

One thing Thomas hopes to communicate is the resource the Department of Agriculture can be for new potential hemp farmers. He wants to stress that new farmers still need to be licensed under the state of Montana’s program.

“Reach out to us, we will walk you through the entire process,” he said.

Currently, the Department of Agriculture is waiting to find out which branch of the USDA will oversee hemp and state programs. Additionally, other state offices like the Department of Public Health and Human Services will likely become involved as this transition moves forward.

“The level of interest has increased dramatically across the state,” Thomas said. “We are as excited as anyone else is. We have a huge opportunity here to capitalize on the progress we’ve made.”

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