Greenberg: State leads hemp and recognizes challenges
Colorado Commissioner of Agriculture Kate Greenberg said there is more to the story than what appeared in last week’s article “High, Dry, and Dying on the Vine.”
Greenberg said Colorado Department of Agriculture has been heavily involved in the U.S. Department of Agriculture hemp rulemaking process from the beginning and the CDA has been more engaged with their shareholders than ever.
“We as a state have been working almost hand in fist with the USDA as they were moving toward the release of their interim final rule last year and we submitted comments for the IFR, we submitted a second round of comments in the past couple of weeks for the second round they opened up,” she said. “Never has the state of Colorado operated outside of compliance. The IFR had a provision that allowed states with a hemp program in place to operate under the 2014 farm bill until Oct. 31, 2020.”
One of her main concerns, she said, was the restrictive nature of the IRF was on track to negatively impact the hemp industry in Colorado. She anticipates the release of a final rule early in 2021 so in the meantime, the state and CDA has been fighting for regulatory consistency and what she calls a smart and flexible regulatory program from the USDA.
Greenberg maintains Colorado’s hemp program is the leader across the country in terms of the state’s influence on production across the country.
“We are one of the few states with a program that preceded the 2014 farm bill and we are looked to by states across the nation in terms of how to influence the federal regulatory structure and how to set up a state program,” she said. “We are leading in new market development.”
Most people, she said, think of hemp and CBD synonymously but market diversification is revealing a market for other uses including plastics and other consumer products that provide more certainty for producers.
Successes on the federal horizon, she said, include a grassroots effort to lead the USDA to utilize Colorado’s state plan. Greenberg called Colorado’s state plan progressive and said it pushed back on the USDA’s restrictions that would have harmed Colorado hemp growers.
One of the restrictions Greenberg opposes is the Tetrahydrocannabinol (THC) negligence level at 0.5%, though Colorado has operated at a 1.0% level from the beginning.
“While we’re pushing our seed program to give producers security about the levels of THC in their crop, we’re not quite there yet so if we went with what is proposed in the IFR, it would put many more producers out of compliance to the point they would have to destroy their crop.”
The 1% level, she said, is nowhere near the level found in marijuana and using that level protects growers. The proposed 100% sampling requirement would also mean the need for additional staff or limited production to meet the requirement of testing all 89,000 registered acres. The 15-day harvest window for sampling is also too restrictive, she said, and that change was reflected in the comments submitted to the USDA.
“USDA knows what we struggle with in the IFR, they know what we want to see and the bottom line is we want to make sure we’re protecting our industry and protecting our producers,” she said.
As with other commodities, wherein producers have numbers to refer to in making decisions, she said with the new hemp industry, this is something that is lacking. Collecting data about costs, prices, and return on investment are all data points she said the CDA hopes to gather.
“We at CDA never touted hemp as the one grand solution or panacea or a salvation in any way,” she said. “Of course, we were focused on it and we still are because it’s so new and it needs focus, and energy and support behind it to grow and become a true opportunity for Colorado producers. Folks in ag know this better than anyone, there is never a panacea and opportunity rolls through and hopefully we can do what we need to to turn hemp into a true opportunity for our producers and that’s why we’re focused on new markets.”
Driving market opportunities with reputable and licensed parties, she said, is a focus but ultimately producers will be making the decisions that are right for their particular situation within a level playing field.
She is aware of the challenges of abandoned fields and elevated land prices but said it’s primarily a local issue as it relates to private property rights. As far as the allusion that the CDA’s promotion of hemp somehow has led to farmers going out of business, she said she doubts producers want government interference in markets and telling farmers how to farm is not the role of the CDA.
“We do have programs in place put forth by the legislature to help protect producers but some of this is much grander than state regulatory programs,” she said. “Like I mentioned, when the farm bill was passed in ’18, it opened up floodgates and those floodgates were ready to be opened before I was on board (as commissioner) and before the governor (Jared Polis) was on board and to have a state agency get in the way of those market forces, in my mind, would have been overreach.”
She said the state is left with consequences from the past year and the CDA is conscious of these issues, but also conscious of the role of state government in not crossing the line of over engagement in the market or private property rights.
FROM GROUND ZERO
Tracy and Nicole Tolle reached out to The Fence Post Magazine after last week’s article appeared. They won’t be growing hemp again. The Fountain, Colo., couple have long raised hay on about 1,600 acres in and near Pueblo County on leased and deeded ground. With one farm in Pueblo with a long-term lease and the potential, they decided to attempt growing hemp.
The contract they entered into was part of a partnership with a group well established in selling marijuana but emerging in the hemp business. The contract detailed that the group would supply the seed, would harvest the crop, and would market it for a percentage of the sales. The outside acres were planted from seed, which Tolle said resulted in poor emergence. Even so, the genetics of the seeds were poor, she said.
Two other growers in the area and the Tolles were called into a meeting and told the crop would not be harvested or marketed by the group and they were on their own.
She said they had to harvest the crop with a freeze coming fast. They were able to harvest it and she said the early harvest to beat the freeze did keep THC levels in check but the crop is still hanging in the barn.
Tracy Tolle hit the pavement to find buyers for the crop and offers hovered around $1 per point with processing the $8 per pound hemp running about $16 per pound.
“We know now that it wasn’t because it didn’t produce well and the seed didn’t germinate well but it’s because they knew prior to harvest that the market had collapsed,” Nicole said. “We realized this later and attempted to sell it as biomass and the agents we dealt with were undependable and there is no guarantee in an industry full of middle men who say they have buyers but they do not. Luckily, he (Tracy) did not physically allow the crop to leave the farm in any of the failed sales agreements we went through.”
When the Tolles were trying to find buyers, she said the hemp market had been flooded by Chinese imports.
“When they were told that, we knew right then we would never be able to compete as a small U.S. farmer if people could buy it from China for a fraction of what we can raise it,” she said. “I was frustrated about why we would push this if we were eventually going to allow Chinese imports — they’ve been doing it for centuries.”
Tolle also visited several processing facilities and ran into a grower who had made a profit in the hemp business in 2018 but was left without a market the following year. We have tried to figure out what happened, she said, and the Chinese import market is the one thing we can put our finger on.
“It did not financially break us because we were smart enough to know you don’t go all in but it slowed us down,” she said. “I hate to see people jump in thinking there was money to be made, I don’t know where that money is. Good people are going to be hurting. Greenberg may not realize what a dire situation this is but I can tell you from ground zero there is no security in the market and we won’t ever do it again.” ❖
— Gabel is the assistant editor and reporter for The Fence Post. She can be reached at email@example.com or (970) 768-0024.
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