Home Business Kentucky, A National Leader in Hemp, Still Faces Struggles

Kentucky, A National Leader in Hemp, Still Faces Struggles

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The legalization of cannabis has been unique, to say the least. There are few examples in history of a very popular product entering the legal market in such a relatively rapid fashion. Almost every other commodity in existence has started among a small group of people (either those “in the know”, or the very wealthy, or both). Radios, TVs, cell phones, cars; the list goes on.

Cannabis, however, is an established commodity with a huge customer base. So instead of a slow rollout or build-up, every geographical area where cannabis has been legalized already had a huge demand for the product in place. The repeal of alcohol prohibition in 1933 is really the only other comparable instance to this in the last century.

Long story short, there are bound to be problems, and a lot of them. There is no road map for navigating the legal cannabis market. For entrepreneurs, this makes the already difficult task of prediction even more difficult.

In the realm of hemp, oversupply has become a real problem – in contrast to the massive shortages seen in legalizing adult-use marijuana. Hemp farmers, finally able to grow this amazing crop after 8+ decades of prohibition, have ramped up production in the hopes that the growing demand for CBD would provide them a market for their hemp.

Unfortunately, many farmers have found this not to be the case, as hemp prices have plummeted in recent months. In Kentucky, two hemp companies are now facing bankruptcy due to oversupply and bureaucratic roadblocks.

In response to feedback from hemp farmers and processors in the state, Kentucky’s Department of Agriculture recently made the decision to continue their program under the 2014 hemp pilot program instead of opting into the new rules laid out by the USDA.

“The 2018 Farm Bill removed industrial hemp from the federal list of controlled substances, a move which has been a catalyst for hemp growers and businesses. Wisely, Congress also gave state departments of agriculture the option to operate state pilot programs for another year before submitting new plans to the U.S. Department of Agriculture,” Agriculture Commissioner Dr. Ryan Quarles said. “The industry has changed dramatically, but the national hemp marketplace is experiencing some real challenges. After much discussion with industry stakeholders in Kentucky, I determined our state will operate our current hemp program for another year as we responsibly make plans to take Kentucky’s hemp industry into the next phase in 2021 and beyond.”

“We lobbied hard to encourage KDA to remain a part of the 2014 Hemp Program,” Katie from Kentucky Hemp Works told The Marijuana Times. “Our biggest concern with adopting USDA rules early is that those rules are still being discussed and debated. We have some serious concerns with the USDA Interim Rule, and did not want to see Kentucky adopting those rules until we had a chance to fix them. The vast majority of KY growers and processors shared our concern, and we are collectively celebrating KDAs decision to wait.”

And overall, the folks at Kentucky Hemp Works are satisfied with the way the state has done things. “We have been mostly satisfied with the way the Kentucky Department of Agriculture has handled their hemp program,” Katie told us. “As a program participant since 2014, Kentucky Hemp Works has voiced every concern and lobbied for every change thus far. Our concerns have largely been addressed; sometimes more slowly than we would like, but so far each problem has been fixed, with the exception of the state’s ban on floral sales. (i.e., no hemp cigarettes, teas, pelletized flower etc.)”

How long it will be until the hemp industry nationwide becomes more stable is anyone’s guess. As more states get their hemp programs up and running, we’ll see more companies come and go as supply struggles to match demand. Hopefully the USDA can fix some of the problems with federal rules that states are having and allow those states to handle their programs with minimal interference.

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