More than 200 people attended Cornell University’s Hemp Filed Day at the Agricultural Experimental Station in Geneva, NY on Aug. 13, 2019. Cornell researchers reviewed the results of test crops.
Jeff Platsky, email@example.com | @JeffPlatsky
For Harney & Sons, there was an opportunity in hemp.
With the boom of CBD-infused products on the market, the Millerton tea company could enter the fray using their own expertise in crafting beverages infused with the substance.
The company received its growing and processing permits last year. Michael and Paul Harney opened an acre plot in Millerton — with the option to expand to four acres — and created a separate company called The Hemp Division in 2018.
“This is new to us, but we know our tea, and we hope to eventually incorporate the CBD we produce into our drinks,” said Michael Harney, vice president of Harney & Sons.
From the Hudson Valley to Erie County to the Bronx and well into Long Island, more than 400 New York growers have nearly 18,000 acres of hemp, much of it awaiting fall harvest. Two years ago, there were barely 100 state-licensed growers.
A hemp plant (Photo: Mara and Kyle McCalmon)
The boom has been remarkable and has been happening quickly as the demand for the crop has soared because of the craze over CBD products, making it a much more lucrative endeavor for farmers than traditional crops.
“People are jumping on the bandwagon left and right,” said Larry Smart, a professor Cornell’s College of Agriculture and Life Sciences, one of the nation’s foremost hemp researchers.”It’s becoming a very popular crop to grow.”
Fifty-six of New York’s 62 counties are now populated with hemp crops. Dutchess County alone has 13 growers.
That’s not all. There are more than 70 state-licensed hemp processors operating in New York when there were just a few several years ago.
This isn’t the hemp of your college years, either.
This is industrial hemp, mostly lacking in the psychoactive THC that creates the high. You could smoke bowlfuls without noticeable effect.
After harvest, the plants will be dried and processed for the valuable cannabidiol, the sought-after material used in a host of pricey CBD products now blanketing the market.
Also, after New York this year failed to legalize recreational marijuana, hemp appears to be the alternative crop for farmers looking to boost their bottom lines.
But they also are doing so cautiously, noting that the CBD buzz could potentially fade or too much product will be grown, leaving them with expensive crops with no use.
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What is interesting is that the burgeoning industry is not what New York lawmakers had in mind several years ago when they expanded regulations to allow for hemp growing in the state.
The changes — which included letting hemp to be sold and transported under a pilot program and allowing for hemp research — were figured to be of benefit for industrial hemp used to make clothes and rope.
But New York happened to change its farming rules at the right time, allowing it to unexpectedly capitalize on the CBD craze.
“I thought grain and fiber would be at least as popular as CBD,” said Assemblywoman Donna Lupardo, D-Endwell, the legislator who first promoted hemp development in New York.
“The potential of CBD has overtaken hemp and fiber.”
The adoption rate on this new cash crop has been swift.
Six years ago, anyone who dared grow hemp — even the industrial variant — would likely face jail time. Two years ago, little more than 1,000 acres were in the ground across New York, and much of that was experimental.
Most of the acres today are no longer experimental. Farmers are eyeing the prospect major revenues from acreage that before produced a mere fraction of the bonanza they are expecting from their hemp crops.
It’s hard to pass up the opportunities presented by CBD hemp.
In Sullivan County, Michael Casternaro is deciding whether to turn over his 40 acres to the lucrative crop.
What’s the lure? Handsome payouts, possibly as high as $36,000 an acre, after expenses. That’s way more than farmers can collect from traditional crops.
“I haven’t grown anything in my life,” said Casternaro, who splits his time between Liberty in the Catskills and Jackson Heights in Queens. “I’m not a farmer per se. It’s definitely the revenue potential that’s the attraction.”
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In the world of agriculture, hemp farming is the new gold rush, Smart said.
Hay may bring in $400 to $800 per acre for each cutting; soybeans, corn maybe $400 depending on yield.
Industrial hemp can bring it 10, 20 or 30 times the revenue per acre from the standard New York crop field, experts said.
So farmers are establishing hemp farms to offset the lower yield from their other crops.
In Warwick, Bruce Ludovicy abandoned his flower-growing venture and instead turned over 40 acres to growing hemp.
“If you have an 800-acre dairy farm, you can carve out 50 acres (for hemp), it’s no big deal,” Ludovicy, the Orange County farmer, said.
In particular, hemp is being seen as a big deal for the bottom line of dairy farmers long suffering from depressed milk prices or those simply growing hay.
“For farms growing hay, it’s a windfall,” he said.
Why crowds formed
New York’s largest agriculture exposition in Seneca Falls for the first time featured three separate hemp presentations. Each drew standing-room only crowds.
A recent day-long presentation on industrial hemp presented by Cornell University’s New York State Agricultural Experiment Station in Geneva drew 200 participants, double the number from last year.
“We are adamant about having a thriving CBD industry in New York,” Lupardo said.
It’s no fad. Industrial hemp is agriculture’s newest and boldest trend. Not only in New York, but across the nation.
In Kentucky, pressed-upon tobacco farmers are hoping the new planting yields scads of cash as the market for tobacco quickly deteriorates. Same for Virginia, South Carolina and North Carolina. An estimated 400,000 acres of industrial hemp will be harvested nationwide this year.
Flocking to New York
Some states are trying to learn from New York, which has benefited not only from its welcoming regulations but fairly inexpensive upstate land that is plentiful and suitable for hemp growth.
Florida Agriculture Commissioner Nicole Fried recently toured a Broome County industrial hemp planting as she scopes out a replacement for her state’s disease-ravaged citrus crop.
Parts of the Hudson Valley, Catskills, Southern Tier and western New York have particularly benefited from the growth, drawing companies from across the nation and Canada.
“Hemp can be a force for good in the world,” said Rade Kovacevic, president of Canopy Growth, which is based in Ontario, Canada.
The company expects to invest as much as $150 million in a 300,000-square-foot industrial hemp processing plant in Kirkwood, Broome County, as part of its expected hemp campus development.
Other large processors are eyeing production facilities in Broome County, while smaller operations crop up in all corners of the state, including the five boroughs.
Several factors are fueling the hemp boom.
Perhaps the biggest is the the removal of the non-psychoactive variant of the plant from the list of controlled substances thanks to the passage of the federal 2018 Farm Bill.
That has helped fuel the growth in the market for CBD products.
“We’re witnessing CBD maturing from a cannabis sub-category into a full-blown industry of its own,” said Roy Bingham, co-founder and CEO of BDS Analytics, a market research firm in Colorado.
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Though still largely scientifically unproven, there’s plenty of anecdotal evidence that the element derived from industrial hemp can provide relief from general pain, anxiety, epilepsy and provide insomnia relief, among a host of afflictions. It’s being sold in the canine market too.
So there’s a research aspect to what is happening in New York. For example, Binghamton University’s School of Pharmacy and Pharmaceutical Sciences is researching the use of CBD in prescription medicines.
And the state Legislature passed a bill in June that would allow the state to regulate the growth and sale of products containing hemp extracts, such as CBD. But it is unclear whether Gov. Andrew Cuomo will sign the bill.
CBD products currently come in the form of tinctures or oils to be placed under the tongue, ointments and salves spread on the skin; gummies to be chewed; and capsules. A 600 milligram bottle — enough for about 40 tablespoons — of CBD oil costs about $85; a bag of hemp dog treats about $35.
With big revenue potential also come big risks.
Industrial hemp is an expensive crop to plant. The Kelloggs of Bainbridge paid $6,000 for a sandwich-size bag of seeds from an Oregon supplier.
Cost was a major factor for Ken Migliorelli, of Migliorelli Farms. Among acres of fruits, vegetables, hay and grain, the Tivoli farm planted 15 acres of hemp.
“The seeds were particularly expensive, more than a dollar per seed,” he said. “I purchased 20,000 seeds, so that’s more than $20,000 in cost.”
Is the seed worth the price? Sometimes not. A shipment of pricey seeds can have too many that fail to germinate or produce undesirable male plants lacking in CBD.
“There are a lot of bad actors out there that don’t reflect well on the industry,” said Scott Propheter, vice president North Carolina-based Criticality, a CBD processor.
“It definitely is a black-eye for the industry.”
With reward comes plenty of risk
Seeds are only the initial expense.
Labor costs are significant: Hand-planting and hand harvesting add to the bill.
Add to that keeping a constant vigil for the appearance of male plants in the field, which, if allowed to flourish and pollinate with the CBD-rich female plants, could wreak havoc on a potentially rich harvest.
Total estimated expense per acre: $15,000 to $20,000.
“It’s a challenging crop to grow,” Smart of Cornell said, citing both regulation and financial risks.
Migliorelli said the harvest is the most cost-intensive aspect of the crop, including the process of hanging and drying the plants.
“We’re sinking a lot of man hours into it, probably up to $20,000 per acre,” he said.
Not to mention pilferage.
A field of CBD hemp looks and smells like marijuana. Even though signs clearly note the crop is not the highly sought after high THC variety, thefts are widespread, though often on a small scale.
“Plant it somewhere where you can have eyes on the access path,” Propheter, the CBD processor, recommended.
Migliorelli said he’s experienced this firsthand, with people “frequently” taking plants off the farm.
“Either they think it’s the real deal and don’t realize it won’t get you high, or they are taking it for the CBD,” he said.
Growing hemp is fraught with other dangers, too, ranging from root rot from wet soil to having the crop confiscated by authorities if THC content exceeds 0.039%.
Any of those scenarios could wipe out the a sizable investment.
Today, the potential of riches is attracting a flood of entrants into the fledgling market.
But ominous signs are on the horizon for hemp growers. Smart and others now worry the speedy embrace of the new crop will lead to overproduction, trimming expected returns.
Based on Smart’s most recent calculations, the market is producing eight times more CBD hemp than it can handle.
“The prices are crashing already,” Smart said. “We’ll see who survives the crash.”
The industry is awaiting a huge decision: The Federal Drug Administration is considering whether to approve the extract as a food additive.
If approved, it could another boon for the CBD market, but a federal ruling is not expected for three to five years.
“If the FDA approves it for food and beverages, hold onto your seats,” Ludovicy, the Orange County farmer, said. “If the FDA doesn’t come through, it’s going to be a fast crash.”
Journal staff reporter Geoffrey Wilson contributed to this report.
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