Thirty-two Graves County farmers are licensed to grow hemp this year, and virtually all of it will be in the ground within the next two weeks.
With the federal legalization of hemp contained in the 2018 Farm Bill that passed in December, and GenCanna breaking ground on its $60 million hemp processing facility near Hickory in February, surrounding farmers have responded for this growing season.
Last year, Graves County had only two licensed hemp growers approved, according to the Kentucky Department of Agriculture.
"Over the past several years, we have proven that hemp can be brought back in a responsible way and that there's agronomic value to growing this crop," Kentucky Agriculture Commissioner Ryan Quarles said. "A year ago, the biggest impediment was the federal law classifying it as an illegal substance. Now with the farm bill passed, opportunity is limitless in Kentucky, and we have the numbers to prove that our farmers are enthusiastic about this crop."
Looking at the numbers
The Kentucky Department of Agriculture expects 1,000 farmers to grow more than 58,000 acres of hemp across Kentucky this year, up from about 200 farmers growing 16,000 acres last year as part of the state's pilot program. Graves County is third in total acreage approved for hemp at 5,208 acres for the 2019 growing season, although Quarles' office pointed out that not all approved acres will be planted as farmers could change their plans for a variety of reasons. Graves County accounts for nearly 9% of the approved hemp acreage across the state.
Officials are hopeful that hemp will replace tobacco as a lucrative cash crop in Kentucky, although they are not without some caution.
"I grew up on a Kentucky tobacco farm," Quarles said. "We continue to grow that crop, but it isn't what it used to be, as formerly our state's number one cash crop. The honest answer is we don't know if hemp will replace tobacco. For several farmers it already has, but for other farmers they have chosen not to pursue hemp because of the risk involved with growing and marketing it. So the jury's still out, but I'm optimistic that hemp will soon be a staple of Kentucky's agricultural portfolio."
That optimism was also expressed by U.S. Sen. Majority Leader Mitch McConnell, who pushed to get the hemp legalization provision in the farm bill, as did U.S. Rep. James Comer (R-Ky.) in the House of Representatives.
"By removing hemp from the federal list of controlled substances, farmers can explore the bright future of this versatile crop, found in everything from a coffee mug to your car dashboard," McConnell (R-Ky.) said in a statement.
A CNBC.com article this spring also expressed promise for hemp farmers, saying that it has the potential to be four times more profitable than corn or soybeans and offers growth potential and better returns than tobacco. The article re-published economic forecasts for the crop, including the Hemp Business Journal's forecast that the hemp industry is expected to reach $1.9 billion by 2022, up from about $1 billion in 2018. Researcher Brightfield Group predicted the hemp-derived cannabidiol (CBD) market could reach $22 billion in 2022.
Advice from an ag agent
Graves County Agriculture Agent Samantha Anderson said a soggy spring slowed the planting of all crops this year, including hemp, leading to what she called a challenging planting season.
"Specific to hemp, challenges that could be faced during 2019 include increased disease pressure due to unfavorable environmental factors," Anderson said. "The reintroduction of this crop to the region has led to an increase in both pest and disease occurrence. Hemp farmers will face the specific challenge of no labeled chemical control methods for disease and pest pressure."
Hemp shares similarities to other traditionally high management, labor intensive crops, such as tobacco, Anderson said.
"As with any emerging industry, hemp still faces some unknowns in regards to best agronomic practices," she said.
Whether it will replace tobacco as a cash crop is unknown, she said.
"As with any new industry, hemp is a high risk/potentially high reward scenario," Anderson said. "The best approach to the hemp industry is that of cautious optimism. New growers should be acutely aware of the risks that this crop brings to the table.
"Historically, Kentucky's farm economy has been reliant on the tobacco industry. The tobacco industry has left an immeasurable impact on the Kentucky farm economy," she said. "The hemp industry has the chance to allow farmers to diversify production, but I would not venture to make such a bold claim that the economic impact of tobacco production could ever be replaced."
Overall, her advice would be for anyone interested in farming hemp to "not risk any more than you're willing to lose."
"This is an exciting time with many, sometimes too good to be true, claims made," Anderson said. "Hemp certainly has a strong future in the Kentucky farm economy, but cautious optimism still holds strong."
She added that seeing the reintroduction of hemp to the state has also been personally rewarding. In May 2014, Anderson was part of a group from Murray State University's Hutson School of Agriculture that hauled the first hemp seed across the Commonwealth to be planted at the university's farm.
"I am thankful that this experience has led to a very personal interest in the success of the industry as a whole across the Commonwealth," she said.
Anderson sees her primary mission as a county agriculture agent as helping farmers to increase their productivity and profitability, something she thinks hemp could aid.
"This is one of the most exciting times in recent agricultural history," Anderson said. "It has been a great pleasure to see history truly in the making."
A processor's plans
As farmers are getting their hemp growing season underway, Graves County's only licensed hemp processor plans to finish phase one of its plant just in time for harvest.
"The construction in Mayfield is going really well," said Chris Stubbs, a founder of GenCanna and its chief science officer. "There are delays here and there based on weather and availability of materials, but overall we're making great progress. We think we'll be done with phase one to take in the crop harvest this year, and we'll continue to build out with phase two and three into 2020."
Phase one is designed to process hemp from a very high moisture content down to less than 5% moisture, which stabilizes the molecules of interest and keeps the crop from molding, Stubbs said.
"There are drying, grinding and separations operations within phase one," he said. Additionally, he said, GenCanna hopes not only to process the hemp flowers but also to store portions of the stalk and leaves for fiber use.
"We're looking to unlock additional value out of the plant at scale out of this Mayfield site," Stubbs said.
At first, the hemp will be processed for distribution back to GenCanna's other plant in central Kentucky, but when the second and third phases are complete in Mayfield, all of that will be done under the Mayfield facility's roof.
GenCanna's manufacturing facility is going up on U.S. 45 north of Mayfield, across from the former Continental General Tire site. GenCanna announced $39 million in investment in the plant in December and finalized the land deal in February, when it also broke ground.
In May, company officials announced that as they have continued to refine and develop their plans, the investment will actually be about $60 million. At that time, GenCanna chief operating officer Richard Drennen said the facility represents the first tangible commercialization of the hemp industry in the United States.
GenCanna markets CBD oil for non-prescription pharmaceutical uses, producing oils, creams and powders geared toward immune support, sleep support and muscle and joint support.
Drennen pointed out at the time the efforts GenCanna was taking was to stay ahead of the harvest. The company spent $1 million on soil stabilization measures after a particularly wet February and March, he said.
Displaying a picture of company representatives gathered with shovels at a ground-breaking ceremony, Drennen said, "We broke ground in mid-February on a facility on Highway 45, and if you think that in this photograph that those people are sane, you'd be wrong. We are building in eight months a project that should take about 18."
A special building process has helped speed the work along. GenCanna is using 50-foot tilt-up concrete panels for the building's shell. The panels are poured on-site and lifted into place with a crane to create the walls. Drennen said the building is the first hemp building in Kentucky approved by the Environmental Protection Agency and is believed to be the second approved nationwide. He also promised strict adherence to industry regulations, including manufacturing products that are kosher, vegan and comply with international standards.
Stubbs praised the teams working so hard to bring GenCanna to far western Kentucky, including the construction crew and more than 30 western Kentucky farms partnering with GenCanna, along with 20 more in central Kentucky. Together, he said, GenCanna has more than 7,000 acres under contract.
Ten farmers are from Graves County, accounting for 1,140 acres, GenCanna reported.
Stubbs noted that GenCanna works with its contracted farmers to try to minimize risk. He pointed to KDA data indicating that about half of the hemp approved by the state is actually planted and about half of what is planted is harvested.
"We really seek to decrease that risk systematically," he said. He estimated that GenCanna recovers more than 95 percent of its plants and acreage.
"That's been a major pillar of our business, to help farmers farm and to create major opportunities that have been lost as this crop has been prohibited and as the tobacco market has continued to decrease," Stubbs said.
So far, he said, partner farmers have planted about 1,500 acres of hemp, although all the rest of it should be planted later this month.
"While we might be a couple of weeks behind on our planting schedule, we're seeing really good movement," he said. "Our farming team has really moved heaven and earth to take advantage of any window of sunshine."
With several different approved varieties of hemp available to plant, Stubbs said the Mayfield facility anticipates harvest running from September through mid-November.
"It depends on when it went into the ground and what particular genetics we are planting at each farm and some of the logistics with the crop harvesting processes," he said.
He added that Kentucky is seeing much higher success rates for hemp growing than other parts of the country. "At the end of the day, Kentucky's well suited to grow hemp," Stubbs said. "I think the weather is well suited to it, and I think the soil is well suited to it."
Some of the contracts GenCanna has signed with farmers are multi-year deals, and GenCanna plans to work with farmers in the area well into the future. At the end of this year, he said, the company will evaluate from what it learned in this growing season.
"If we identify additional demand, which I think we will, we'll create an open call and reach back into our Rolodex and on-board additional farmers into our network," he said.
Stubbs also wanted to express GenCanna's gratitude to those in western Kentucky.
"We'd absolutely like to thank the farming community, the construction community and the entire community for coming together and having us," he said. "It's not lost on us that it takes a lot to do something new and to be welcomed with open arms."
He added, "It's been a dream and a vision for us for years to create access for CBD and other end products at a meaningful scale, and this is certainly a testament to that goal."
Looking toward the future
Quarles is focused on making sure Kentucky leads the way in both hemp production and processing.
"Kentucky is the hemp epicenter of the United States, even as other states attempt to catch up," he said.
Kentucky has about 200 processors turning raw hemp into products consumers want to buy, he said, and he added that other states don't have the processing capacity. Kentucky also has more acres approved to grow hemp than any other state, he said.
"There's still a lot of risk, though, but it's a half dozen issues we're working tirelessly on to protect an industry that's just getting off the ground," Quarles said.
Among those issues, he named uncertainty with the U.S. Food and Drug Administration and its potential regulation of hemp products, hesitancy with banking institutions to lend to farmers who are legally growing hemp, a lack of mature crop insurance products for hemp farmers that Quarles said will take time to develop and educational components to explain what hemp is and, most importantly, what hemp is not, he said, referencing marijuana.
Kentucky is also actively working with the Environmental Protection Agency to work to find viable herbicides and pesticides labeled for hemp usage. Quarles said state officials have been working with the EPA almost on a weekly basis "to push for the technology growers need to be more efficient and see better yields."
Transportation issues have worried some farmers, but Quarles said that issue should be improving now that the USDA general counsel has issued an opinion that it is legal to transport hemp across state lines.
"It should be treated no differently from corn, wheat and soybeans when passing through their states," he said of states that have not opted to grow and process hemp.
He also made a request of those states, saying that even if other states choose not to participate, "don't get in the way of Kentucky job creators."
The Kentucky Department of Agriculture will continue to work to implement a plan with the Cabinet for Economic Development for processors, he said, "So when they choose to invest in the Commonwealth, they are treated just like a manufacturer locating in any Kentucky county."
"That just shows you Kentucky has reached a point of comfort from our state leaders that hemp can create jobs in every single county in Kentucky," he said.
He noted that so far this year it's already growing in 101 of the 120 Kentucky counties.
In the end, Quarles said there is a lot of work still to be done, but that Kentucky is up to the task.
He said, "Kentucky is leading the conversation with USDA officials and educating them on how our hemp program has been successful so they can better understand what this crop means to our farmers and to our local economy."