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Getting a Handle on Hemp

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Mature buds on a cannabis plant used for extracting CBD oil.

Since the 2018 federal Farm Bill removed prohibitions on industrial hemp and reclassified it as an agricultural commodity, people across Florida have gotten excited about the opportunities the new industry might bring to the state. Nicole “Nikki” Fried, commissioner of Florida’s Department of Agriculture and Consumer Services who’s overseeing the state’s hemp program following the passage of Florida Senate Bill 1020, has noted the possibility of a multibillion-dollar industry.

Folks in Florida’s agriculture sector see potential in hemp—a term that’s used for varieties of cannabis that contain 0.3 percent or less of THC (tetrahydrocannabinol, the psychoactive compound in marijuana)—especially as a possible replacement for crops, such as citrus, that have been plagued by problems lately. But there’s still a way to go before farmers can start putting hemp seeds into the ground.

That’s because while the state’s rules for distribution and retail sale of hemp extract (including for ingestion) and for the use of hemp extract in animal feed have gone into effect, Florida’s seed and cultivation rules are still being finalized. Once adopted, they’ll need to be approved by the U.S. Department of Agriculture.

The goal is for cultivation permits to be available at some point in 2020. But even when that point arrives, farmers might want to wade rather than dive into the hemp business.

“We’re certainly watching it very closely,” says Mitch Hutchcraft, vice president of real estate at King Ranch/ Consolidated Citrus. “It’s an emerging market, and there is opportunity there. But there are still, in our mind, questions we want to answer first.”

Could the state’s hemp program be a multibillion-dollar industry?

Pilot programs being conducted through the University of Florida’s Institute of Food and Agricultural Sciences and Florida A&M University are assessing dozens of varieties of industrial hemp to see how they do in the Sunshine State. The goal is to determine certified seed sources for cultivation here.

“Just because a strain works in Colorado, it may not work in Florida,” says Cole Peacock, a founder of Fort Myers cannabis cafe Seed & Bean Market and a member of the Florida Hemp Advisory Committee. “We as a state want to know which seeds can grow where.”

Without a firm understanding of that, farmers would be taking a gamble when putting seeds into the ground. They also need to have a clear plan for what they want to grow and how it will be used. They’d want to choose different varieties to grow hemp for the wellness sector versus growing it for industrial use— in building materials or clothing, for example.

“You really have to have a plan for what your business is going to look like overall,” says Christopher Marrie, principal in the Naples office of HBK CPAs & Consultants and director of the firm’s Cannabis Solutions Group. “Are you going to do everything from seed to sale, or just the farming and processing? Having that strategy spelled out before you ever put anything in the ground is going to be a game-changer.”

Knowing that you have a buyer for anything you grow also will be important. It won’t matter how great your crop is if you can’t sell it to anyone.

“It’s so early that I’m not sure how strong all the links of that chain are yet,” says Hutchcraft. “It hasn’t been proven or tested, so the whole industrial chain isn’t clear yet. I think if I were someone who wanted to do it, I’d say, ‘Let’s do it on a small scale and see how that goes.’ If you want to go for it, great. But make sure you’re doing it with your eyes open.”

If you’re interested in getting into hemp cultivation, use the time while you’re waiting for Florida’s seed and cultivation rules to be finalized to really educate yourself. Comb through the resources and information available from the Department of Agriculture and talk with other expert sources who can alert you to potential challenges or pitfalls. “Do your research and talk to people who have actually been involved in the industry,” says Brian E. Dickerson, an attorney in the Naples and Washington, D.C., offices of FisherBroyles and a board member of the Florida Hemp Council.

Hemp is a new industry both in Florida and across the United States, which means it will take some time to get all the necessary pieces in place. “Right now, there are not enough processors in the country,” says Dickerson. “There are plenty of people growing hemp, but not enough people to take that raw flower and make it into crude oil or powder for tinctures, creams and lotions.” He also points out that there aren’t enough labs in place to handle necessary testing of products.

Hemp is a new industry both across the United States and in Florida, which could see multiple growing seasons in a year.

But the consensus is that the potential is there in our state. Florida could have multiple hemp growing seasons in a year, and the crop could be used in a variety of ways, from producing cannabinoids for wellness purposes (the ubiquitous CBD is just one of many cannabinoids that can be extracted from hemp) to serving as a wood alternative for flooring and a straw alternative for horse bedding.

“I think the potential is very large, as long as the industry is regulated properly and people getting into the industry understand it’s going to take some time to develop,” says Peacock. “It’s not going to be just a cash grab; it’s got to be developed the right way. But it can very easily be the next major arm of the agriculture industry in the state of Florida. This is a crop a lot of farmers can [make a] transition into and use in a variety of ways.”

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