Industrial hemp has potential to be a big cash crop for area farmers

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The majority of the buzz around the cannabis sativa plant in Oklahoma is focused on the legalization of medical marijuana.

Overshadowed are the steps at the federal and state levels to allow the cultivation and interstate trading of industrial hemp, something that could provide an alternative crop, and financial relief, to area farmers.

Industrial hemp was farmed quite successfully in Oklahoma during the 1940s, and many are seeing the potential for the state to be a major player in the industry.

It’s not marijuana

Hemp and marijuana are often confused, and the visual similarities are one of the biggest reasons hemp has been a dormant industry for decades.

To be clear, marijuana and hemp are cousins, both coming from the cannabis sativa plant. They are however, different strains of the plant.

By law, industrial hemp must have less than 0.3% THC, the chemical that produces the euphoric effect or “high” of other cannabis plants, according to the Oklahoma Department of Agriculture.

“It is a totally different product,” said Bruce Peverley, agriculture educator with the Tulsa County OSU Extension. “It’s not a mind-numbing drug.”

In the colonial days, hemp was used for naval cordage.

In World War II, the Hemp for Victory program was launched after the U.S. lost its major source for cordage when the Philippines fell to the Japanese. The idea was to encourage farmers to grow hemp, and many farms across Oklahoma joined in the effort.

At the conclusion of the war, hemp basically disappeared from the agricultural landscape across the country. The “Reefer Madness” mindset and the vilification of marijuana led to farmers abandoning hemp as a crop because of its close resemblance to the drug.

“It’s a crop that proved itself to grow very well in Oklahoma,” Peverley said. “The problem is distinguishing hemp from marijuana. Most people can’t tell the difference. Nobody tried to grow industrial hemp anymore, because obviously they were trying to sell illegal drugs, even when that wasn’t the case.”

Green light to grow

The 2014 Farm Bill created the possibility for states to create their own pilot programs to research the viability of hemp as an agricultural crop, on a federal level.

Oklahoma adopted its pilot program, and in 2018, 28 growers received licenses to grow hemp through the program.

With the 2018 Farm Bill, hemp was taken off the controlled substance list, and interstate commerce became permitted throughout the country.

Then, just two weeks ago, Gov. Kevin Stitt signed a bill expanding Oklahoma’s pilot program into commercial industry.

“Hemp has come back into the consciousness of the United States in the last couple of years,” said Clark Phipps. “Historically, hemp was a hugely important crop because it has broad uses, grows easily, grows in many different environments and conditions.”

Phipps, a Tulsa-based attorney and co-creator of Somatic Hemp, has overseen the care of his family farm for years.

The Kay County farm, purchased by his grandfather in 1956, has primarily been used to produce wheat, winter wheat, soy beans, corn, alfalfa and other traditional row crops.

Phipps said he and other farmers he knows are always looking for new crops to help sustain the farm.

“Farming is a tough business. It’s up and down, and the margins have become, for most grain crops grown in Oklahoma, very slender. So it’s expensive and difficult,” Phipps said.

“Farmers have been looking for alternatives, and hemp offers some opportunities for that.”

This month Phipps will be planting what he hopes will result in his first harvest of outdoor industrial hemp. He is planting on about 20 acres of farmland.

Farming styles

There are two types of farming approaches for industrial hemp. One, which is primarily done indoors, is designed to grow hemp with a high cannabidiol content that can be used to produce CBD products.

Those products are usually grown indoors so that the buds, containing the highest percentage of CBD, don’t get fertilized, which leads the plant to prioritize its energy use for seed production instead of flower production.

“Because of the CBD gold rush, the price of CBD hemp flower is very high,” Phipps said. “So most of the current strategy is to try and get flowers to produce CBD.”

The other approach is to focus on all the other products hemp can provide. The stalk, for instance, is a strong fiber that can be used for rope or to strengthen structural components.

The seeds can be harvested like a grain and used as food or pressed into oil for consumption.

That approach lends itself to traditional row-crop style of farming and is the route that Phipps is going to take.

If his first crop is successful, Phipps said, the plan is to increase the amount of land dedicated to hemp to 60 to 120 acres. He also plans to share what he learns from his first crop with other farmers so they can also start farming industrial hemp.

“None of this may pan out, but this has the potential to bring our farm into the next decade of farming,” Phipps said. “Because we really are on the cutting edge, we have the opportunity to provide other Oklahoma farmers with some information about an alternative crop they can put in their rotation.”

In need of infrastructure

Peverley said some questions still need to be answered before hemp can become a mainstay crop, such as: Where to haul bales of hemp? What is the payment schedule? Where is the market?

“It takes no imagination that if you raise several tons you’ll have to ship it somewhere. We already ship wheat all over the country, but where are we going to ship this? How do we have to handle it? There are a lot of questions I don’t have answers to,” Peverley said.

There also needs to be a processing plant.

Bruce Perlowin, CEO of Hemp Inc., said he predicts Oklahoma will become a major player in industrial hemp.

Hemp Inc. is a publicly traded company with four processing plants, including what it says is the largest one in the country, located in North Carolina. It also has plants in Oregon, Arizona and Nevada.

“Oklahoma will be rivaling other states as the biggest producers,” he said. “When you hear this much buzz, you know that when there’s smoke, there’s fire. I’ve been hearing buzz from Oklahoma for a good solid year.”

Perlowin said his company is aggressively seeking partners to build a processing plant in Oklahoma.

“Imagine instead of making $1,000 an acre, you could make up to $30,000,” Perlowin said. “No other crop touches that; and once the farm bill passed, it took away all the deterrents.”

Perlowin admitted that those kind of prices won’t last forever. While demand is outpacing supply now, the supply will catch up.

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