Connecticut hemp farmers want to be given preference for growing Recreational Marijuana

Farmers say they're already struggling with low hemp prices and fear losing out to bigger companies when licenses to grow cannabis become available.

HARTFORD - Connecticut hemp farmers looking for higher incomes are working to change the recreational marijuana law to give them better odds – or even assurances – of becoming licensed growers.

Hemp farmers say the current recreational marijuana laws put them at a disadvantage for being chosen to grow marijuana and favor wealthy companies, many of them based out of state.

“The farmers are being ignored up to this point. It’s not fair,” said Brant Smith, the owner of Hemp House Farm in Cheshire which has a 70,000-square-feet greenhouse on 18 acres. “It will be highly fulfilling when I can make a reasonable profit.”

With hemp industry profit in Connecticut plummeting and hemp growers’ ability to convert to marijuana in a day, hemp farmers want an advantage.

The Connecticut Hemp Industry Association – or CHIA – of which Smith is a board member, has hired lobbyists and a committee that will meet with lawmakers at the start of the next legislative session to examine how they can gain an edge.

Rep. Michael D’Agostino, D-Hamden, chairman of the legislature’s General Law Committee which oversees the regulation of the cannabis industry, will be at the table with the hemp farmers.

“I think it’s an important discussion for us to have,” he said. “The threshold question is how much supply [of cannabis] do we need? Maybe we’ll need double what we have. … We need to get the market going.”

Smith said with the price of hemp tanking, he’s only breaking even, and that’s before the start of greenhouse heating season.

He said a pound of his high-end hemp sells for $450, while marijuana sells for $3,000 per pound.

“This is the only way I can keep my business open,” Smith said, referring to growing recreational marijuana.

Smith and others in the industry said they are best suited to grow cannabis for recreational use because the growing techniques, equipment needed and testing process are the same. He also noted his hemp is grown in the sun, not under artificial lights.

Hemp, used in CBD, and marijuana differ only in their psychoactive component or amount of tetrahydrocannabinol, commonly known as THC. Hemp, used in making CBD products, has 0.3% or less THC, not enough to create a “high.”

Although it will take six months before the cannabis they plant today is ready for sale, hemp farmers can switch their crop in a day, Smith said, and also produce high-quality, small-batch variety, much like a craft beer brewery.

One approach highly favored by Smith and the hemp industry here is to grandfather in hemp farms as permitted cultivators as they did in New York when they discovered there wasn’t enough recreational marijuana being grown to meet the need. But the amount of recreational cannabis needed in Connecticut to satisfy the consumer is still a question mark because retail sales aren’t expected to start until the end of the year.

According to data from the Department of Consumer Protection, which oversees the state’s medical and recreational marijuana program, there are three categories for potential recreational licensing for cultivators:

The four existing medical marijuana providers can convert to serve both marketplaces.

Those cultivators located in neighborhoods disproportionately impacted (DIA) based on historic conviction data related to cannabis and unemployment rates. Those applicants, if they can prove social equity status, must pay $3 million which goes into a fund for reinvestment in the community. There were 41 applicants and 16 have been approved. An additional 11 applicants are under further review by the Social Equity Council in this category.

A lottery for micro-cultivators with facilities 10,000 square feet or less, which can include social equity applicants. The micro-cultivator category is done by lottery.

The application fee for micro-cultivators is $250 for general applicants and $125 for social equity applicants. Lottery applicants can submit as many applications as they like if they pay the fee each time. Two social equity cultivator applicants have been awarded through the lottery and two general applicants. It could not be determined if any are hemp farmers.

Hemp farmers, like the general public, can apply for a micro-cultivator or a DIA cultivator license, but it’s unrealistically pricey, the farmers say.

If they were awarded under a DIA application they would need $3 million. In the micro-cultivator category, it would be tough to compete with multiple applications from the same companies.

“I can apply as much as I want and flood the market with applications if I have money,” Smith said.

CHIA president Becky Goetsch of Running Brook Farms in Killingworth said the goal is to change the law and ideally make it so all qualified hemp farmers are able to transition to recreational marijuana.

“We don’t want to be part of the lottery,” she said. “We want to be recognized as legacy craft producers.”

The number of hemp farms since they became legal in 2018 has gone from 140 in 2020 to fewer than 40 today.

“In Connecticut, the struggle is real,” Goetsch said, noting it’s difficult to compete with larger out-of-state farms. “There’s definitely a glut in hemp.”

D’Agostino said the industry’s “unique role” in its ability to produce cannabis should be recognized. He was impressed, he said, after a visit to Smith’s farm.

“The question is, ‘How can we fit the hemp farms into the system?'” he said. “They’d like to be grandfathered in. I don’t think we can go that far.”

D’Agostino asked rhetorically if hemp farmers could become their own category of cultivator between medical marijuana producers and social equity applicants. He said another option could be to put hemp farmers in the social equity lottery if they meet all the requirements. The question of whether there’s support in the legislature remains, saying the legislature’s political question will be, “If you give it to a hemp farmer, whose not going to get it?”

He said the answer could be to create a separate reference that recognizes hemp farmers for their unique role, as they already have the equipment and know-how to grow cannabis.

Goetsch said it’s natural for a hemp farm to switch to marijuana not only because of equipment but also because the regulation and oversight are already there. Hemp farms have the ability to create a robust craft variety with different smells, textures, tastes, and effects. The marijuana would have nuances like those that come out in wine, she said.

“We could provide them with a good product,” Smith added. “They wouldn’t have to drive to Massachusetts or go to the gray market.”

Goetsch said CHIA feels strongly there will be a shortage of recreational marijuana when the retail market begins.

“I view this year as a wonderful opportunity to change some policies and hopefully make it better,” she said.