WISCONSIN - The eagerly anticipated industrial hemp administrative rule was released by Wiscsonin Department of Agriculture, Trade and Consumer Pro-tection (DATCP) last week.
Licensing applications are now available for Wisconsin’s research pilot program, and DATCP will begin accepting applications immediately. The deadline to apply for the 2018 growing season is May 1.
People who want to grow or process industrial hemp in Wisconsin will need to apply for a license, and at the same time, register their intentions to grow or process hemp in the state this year. They can do both online, or download printable forms, at datcp.wi.gov.
The state is not limiting how many licenses are issued or the number of acres for growing in the state. Applicants must pass a background check and pay several administrative fees.
Congress included a pro-vision in the 2014 farm bill to allow states to conduct research pilot programs into industrial hemp production, if authorized by their legis-latures. The Wisconsin Leg-islature passed a law in No-vember that directed DA-TCP to write an emergency administrative rule in 90 days. The rule sets up the regulatory framework for the pilot program.
That rule, called ATCP 22, is now finished and is effective March 2, 2018. The industrial hemp program it creates is based largely on those in the 31 other states.
The law, as passed by the Wisconsin State Legislature and signed by Governor Scott Walker, requires that growers and processors pass a background check to show that the licensee has no state or federal drug convictions. Growers will pay a one-time licensing fee of $150 to $1,000, depending on how many acres they intend to plant. Processors will also need a one-time li-cense, at no cost. Both will have to register with DA-TCP this year, and annually to remain in the program, with growers paying a $350 annual fee and processors, a $100 annual fee.
DATCP inspectors will sample plants from each field and variety grown, and take them to the department’s laboratory for analysis. The plants can contain no more than 0.3 percent THC. Growers will have reporting and recordkeeping requirements, and will be required to enter into a re-search agreement with DA-TCP.
Identify a market
DATCP has urged farmers considering growing industrial hemp to be sure to identify a market before putting seeds in the ground.
“DATCP will focus mainly on getting our program up and running in 2018,” Wisconsin Bureau of Plant Industry Director Brian Kuhn said. “We know the interest is there in the farming community, but it is going to take a bit for the processing side of things to ramp up in the state.”
Kuhn said that currently there are several companies that are based in Wisconsin who have been contracting for hemp in other states. He said they are interested in bringing their businesses home and contracting for hemp grown in Wisconsin.
“Right now what we’re seeing is more entrepreneurs seeking licensing,” Kuhn said. “We’re seeing some farmers and business people applying who seem to have a higher appetite for risk.”
Kuhn said that the Wisconsin Farm Bureau has been a big supporter of the industrial hemp program, and he anticipates that they may be a resource to farmers looking to identify a market.
On Wednesday, Jan. 10, area farmers attended presentations by Ken Anderson, owner of Legacy Hemp, at a meeting of the Vernon County Inventors and Entrepreneurs Club. Anderson discussed emerging markets in textiles, construction, personal care and food products for industrial hemp.
At the meeting, Anderson told the group that Legacy Hemp is looking to contract for 3,400 more organic acres of hemp in 2018. The company is hoping to contract with Driftless Region farmers for those acres.
Anderson, who was instrumental in helping to get legalization of industrial hemp production in the state passed, already has grain production and processing going in Kentucky, Minnesota and North Dakota.
There is already a well-developed customer base for the product, and demand is growing. With production in the U.S. having been illegal since the late 1950s, most of the hemp to supply the burgeoning food, personal care, textile and construction business has been imported. With legalization in more and more states, there is strong potential to once again have a domestically produced supply of this agricultural commodity
Plans for 2018
Legacy Hemp is currently contracting for farmers to grow organic hemp seed in the 2018 growing season. To apply, farmers should go to legacyhemp.com. Farmers who want to be considered for the 2018 growing season should apply before March 15. Once Legacy Hemp receives a completed application, then one of their agronomists will be in contact.
The company will break ground in May of 2018 on a processing facility to be located in Prescott, Wisconsin, just over the border from the Twin Cities in Minnesota.
“The location is advantageous for us because it is literally on the same city block as our number one customer UNFI, and just down the block from a key packaging partner,” Anderson said. “It will also help our business to be closer to the interstate.”
Anderson says that they are working hard to secure receiving centers across the state to receive farmer’s produce. He anticipates those receiving centers will be located just north of Viroqua in Vernon County; in Rock County; and in the Eau Claire area.
“With our business, it is all about quality,” Anderson explained. “Most farms don’t have the capacity for on-site storage, and good quality storage is critical for the seeds to produce a premium food grade organic product like ours.”
Anderson says that their goal with storage is for a total of six hours between field to receiving center. He is looking to work with facilities that are already operating and are certified for organic grain.
“We are also working on a market for the bast and hurd byproducts of the hemp grown by the farmers we contract with,” Anderson explained. “We are in discussions with a company out of California that manufactures a hemp fiber board. Perhaps as soon as 2018, or else in 2019, we are optimistic that this company will give our farmers an additional market.”
A premium product
Anderson explained that Legacy Hemp is focused on organically produced grain for use in the natural foods industry. His goal is to secure a premium price for the farmers he contracts with.
The hemp seed will be processed into de-hulled hemp seed, protein powder, and hemp oil. Those products will be sold into the food industry for inclusion in other food products, or packaged in bulk and sold as-is.
“Right now there’s a glut of cheap, conventionally produced hemp seed on the market,” Anderson explained. “We’re not out to win the race to the bottom.”
Anderson says that there’s bound to be a “rush for gold” with industrial hemp, but his method is to do it right versus fast.
“My motto is to do it right, now, versus doing it right now,” Anderson explained.
Farm economy benefits
Industrial hemp was a major crop in Wisconsin in the first half of the 20th Century, mainly harvested for its fiber to make rope. Hemp products today are very diverse, and are avail-able in the United States, but have been largely made from hemp produced in other nations.
The provisions approving cultivation of industrial hemp in the 2014 Farm Bill were for a ‘research pilot.’ The driving force behind the research is largely related to the potential industrial hemp has to give farmers an alternative rotational crop and the economic impact that would have. According to the Hemp Industries Association, 2015 U.S. sales of hemp products reached nearly $600 million with the bulk of the hemp for those products having been grown abroad and imported into the U.S.
“I really believe that that farmers are thirsty for a crop that can give them another profitable rotation on their farm,” Anderson said. “And beyond its potential as another cash crop, hemp has tremendous application for soil building and erosion prevention.”
Anderson says that by converting some of the acres in Wisconsin currently used for growing corn and beans, he sees potential for that to have a positive impact on current depressed grain prices.
At the meeting in Viroqua, Anderson detailed the kinds of crops and products that are currently driving the industrial hemp market. Hemp is currently being grown primarily for grain or seeds, but is also well known as a fiber crop. The fiber industry in the U.S. is lagging behind the grain industry. Hemp also has a storied application in America being grown to produce paper.
“Textile grade fiber processing requires more infrastructure,” Anderson said. “I estimate that development of this sector, which requires more technology, is about six years out.”
Wisconsin NORML activist Dennis Brennan said that he and others are also working on developing a processing facility for manufacture of CBD oil.
Cannabidiol, abbreviated CBD, is one of at least 113 active cannabinoids identified in hemp. It is a major phytocannabinoid, accounting for up to 40 percent of the plant's extract.
CBD does not appear to have any psychoactive effects such as those caused by tetrahydrocannabinol (THC). A number of studies on CBD indicate that it may be useful in treating inflammation caused by a variety of conditions. Studies have show that CBD has anti-inflammatory effects, especially in treatment of chronic inflammatory and neuropathic pain.