What’s Up With N.C. Hemp
With modern hemp production heading into its fifth growing season in North Carolina, what does the future hold for this crop? That’s a question that’s likely on the minds of over 1,500 licensed growers and others in the hemp industry — and the one we explore in this episode of Farms, Food, and You.
Please note: This episode was recorded in December 2020. Since then, legal changes may have occurred. For updates on hemp law, please see the Extension hemp website.
To support North Carolina’s hemp industry, NC State Extension has a team of specialists working on everything from budgeting to production methods to disease and pest management. The team can be reached at firstname.lastname@example.org, and it has an extensive website full of information at industrialhemp.ces.ncsu.edu.
About Our Guests
Matt Spitzer is co-owner of Triangle Hemp. A North Carolina native, he earned a professional golf management degree and a minor in business at NC State, worked in the golf industry in South Carolina and returned to North Carolina to join Chase Werner, his longtime best friend, in a hydroponic lettuce farm called Endless Sun. They were among the first growers to sign up for licenses through the state’s industrial hemp pilot program. Their farm produces seeds and transplants for growers across the country.
Marne Coit is a faculty member in NC State’s Department of Agricultural and Resource Economics, where she teaches, researches and conducts extension programs related to food, agricultural and hemp law. She earned a master’s degree in environmental law and a juris doctorate from the Vermont Law School and holds an LLM degree in food and agricultural law from the University of Arkansas School of Law in Fayetteville. She is the co-author of the book “Food Systems Law: An Introduction for Non-Lawyers,” published in July 2020.
David Suchoff has lived in North Carolina since he was 10. He came to agriculture through service when he did work in sustainable agriculture while serving in the Peace Corps in Paraguay and Costa Rica. When he returned, he was an apprentice at the Cherry Research Farm in Goldsboro and decided to pursue a master’s and then a Ph.D. in horticultural sciences at NC State. He is an assistant professor and alternative crops extension specialist in the university’s Department of Crop and Soil Sciences.
Dee Shore (00:07):
Hemp has been touted as a crop with some 25,000 uses, from health products to clothing, from biofuels to a construction material known as hempcrete. With modern hemp production heading into its fifth growing season in North Carolina, what does the future hold for this crop?
That’s a question that’s likely on the minds of over 1,500 licensed growers and others in the hemp industry. I’m Dee Shore of North Carolina State University’s College of Agriculture and Life Sciences, and in this episode of Farms, Food, and You, we will focus on the challenges and opportunities facing hemp producers in our state.
Dee Shore (00:54):
Hemp is sort of a new crop for North Carolina. I’ll explain the sort of in a minute. But Matt Spitzer and Chase Warner of Triangle Hemp were among the state’s first licensed growers. They produce and sell seeds and starter plants, and Spitzer says that since farmers began growing the crop in North Carolina in 2017, it’s followed a trajectory similar to other new industries.
Matt Spitzer (01:21):
New industries seem to follow an S-curve where it’s a rocket ship, and then it starts going downhill, and then it bottoms out at some point, and then slowly starts to go back up. And it was like a rocket ship. Every farmer we talked to wanted to grow it. There were promises of huge profits for everyone. We were working with farmers that had thousands of acres of tobacco or peanuts or soybeans or what have you, and it seemed like this was going to replace tobacco for good. There was a lot of over-hype.
Dee Shore (01:54):
Because of the hype, there was what Spitzer calls a massive nationwide oversupply of hemp in 2019.
Matt Spitzer (02:02):
That caused a lot of people to scale back. It caused prices to plummet, and farmers who once wanted to grow 100 acres were saying, “Let’s hold on a second and let’s see where this industry shakes out.” And so this has been a shake-out year, this last year. We don’t know where it’s going to bottom out, and then it will start to go back up.
Dee Shore (02:25):
To get an idea of where hemp might be headed in North Carolina, it helps to know what it is exactly and a little bit about the history of the controversial crop. Hemp and marijuana are the same plant: Cannabis sativa. The difference has to do with the level of the psychoactive compound THC contained in the plant. Marne Coit, an NC State expert on hemp law and policy, explains.
Marne Coit (02:53):
Industrial hemp is defined in the 2014 Farm Bill, which was a federal law that was passed by Congress, it was defined as anything that is 0.3% or less THC. If it goes above that threshold, then it is considered to be marijuana.
Dee Shore (03:12):
In other words, hemp won’t get you high. Its value lies in two properties: Hemp contains cannabidiol, a chemical referred to as CBD. CBD is purported to have health benefits that range from reducing pain and anxiety to helping with inflammation and nausea. Hemp also produces fibers that are both strong and light and can be used in multiple industries.
Marne Coit (03:41):
You can make rope. You can make clothing. You can make paper. It can be used as a replacement for plastics, and it can also be used for car parts, hempcrete. There are seemingly endless numbers of uses for this particular plant.
Dee Shore (04:00):
Hemp was grown in North America from as early as 1606, but the U.S. banned its production in 1937. Federal legislation changed though, and in 2015, the North Carolina General Assembly passed a law making it OK to produce the crop under a state pilot program.
There were, however, several caveats. Growers had to be licensed and conduct research on the crop, and their hemp had to be tested for THC levels before it was harvested. Above 0.3%, the crop would have to be destroyed.
When production restarted in 2017, there were less than 100 North Carolina hemp producers. The industry has gone through dramatic changes in a short time, not only in the amount of hemp being produced, but in the number of growers and more change could be on the way. Here’s Coit again.
Marne Coit (05:04):
Now, at the end of our fourth year, we have about 1,500 licensees. I would say in the first three years, the majority of farmers, probably more than 95% of farmer grew for CBD. I don’t know if that will continue to be the case going into the future. I don’t know how long it will take. But I think that more farmers will probably start growing for fiber, maybe for seed. In terms of fiber production, one of the issues we have right now is that we don’t have enough fiber processors in order to really get that segment of the market off the ground. We would have to have a lot more infrastructure than we have in place right now.
Dee Shore (05:49):
David Suchoff, an NC State Extension specialist and expert in hemp and other alternative crops, agrees.
David Suchoff (05:57):
We’re getting a lot more interest in fiber. We’re getting those farmers that kind of got burnt in the CBD realm and they still want to grow hemp, but they just don’t want to do CBD. Or we also have a lot of farmers that just have never been interested in CBD, but they can see fiber being integrated into their systems, into their crop rotations. The market is still not quite set and so we’re not going out and telling farmers, “Hey, go grow fiber.” Because the last thing we want is another CBD issue, where everyone grows it and then they’re not able to sell it. We want to get a better understanding of the market and ensure that the demand is there for our farmers.
Dee Shore (06:34):
Suchoff is pursuing research opportunities that might open the door for expanding the fiber hemp market in North Carolina. He’s been talking with textiles companies and faculty members in North Carolina State University’s Wilson College of Textiles.
David Suchoff (06:52):
There are steps to get fiber from the field to a yarn or something that we can make a shirt or whatever into, and that needs to be figured out. But we’ve submitted a number of grants to do research – from my end, basic agronomic research. So finding the best variety that grows here and when’s the best time to plant it and the spacing and the fertility. But what I’m really excited about is we have a number of grants that are joint between the College of Ag and Life Sciences and the College of Textiles. So we’re really trying to look at it from field to shirt. So we’ll grow it, try to determine how we can optimize biomass production, and then we’ll have it processed. And then the folks that College of Textiles can look at maybe which varieties produce the best quality of fiber so that we can really be able to offer our farmers good recommendations in terms of the best practices to get the best bang for their buck.
Now, the profits are not going to be very high on fiber, but at the same time, there are farmers that aren’t making any money on CBD. We are cautiously optimistic with fiber hemp. I think it has a place in North Carolina for a number of reasons. We’ve got this robust agronomic sector, but we also have a very large historic textiles industry. And so it just seems right for a crop like that.
Dee Shore (08:11):
As researchers pursue those possibilities, they’re also looking at ways to reduce THC levels while increasing levels of CBD. Farmers are interested in increasing CBD, but research has shown that as CBD goes up, so does THC.
David Suchoff (08:30):
Doing some work here at NC State, some research to try and better understand CBD and THC production over time, and our goal really is to be able to give them better recommendations based on time of flowering, saying, for example, “Hey, six weeks after flower initiation is when you want to harvest, because afterwards it’s going to be about 0.3%.” Unfortunately right now, a lot of farmers are looking to the marijuana industry for recommendations on when to harvest, but it’s counter-productive because marijuana growers are trying to maximize THC, and that’s what hemp farmers should avoid at all costs. We just have to look at it really as a different crop.
Dee Shore (09:09):
Meanwhile, plant breeders hope to develop new varieties with higher CBD levels and to reduce the costs of growing CBD hemp. Suchoff explains.
David Suchoff (09:20):
In general, there’s a push to lower the cost of growing the crop. And the two ways of doing that really are reducing your labor and then reducing plant costs. Because for CBD hemp, we want all female plants. And to do that, we either have to get cuttings, which are very expensive, because there’s a lot of labor involved, or we get what are called feminized seed. And so these are seeds that come from a plant that’s been treated so that the seeds themselves are almost probably about 95% female. Those are still a bit expensive, but it’s much cheaper than purchasing cuttings.
And there’s even interest in trying to do direct seeding for CBD hemp, but right now CBD hemp is grown like tobacco or tomatoes. So it’s transplanted into the ground versus direct seeding like corn or soybeans. And so the more mechanization you can utilize and the less hand labor you’re using, you can greatly reduce the cost of production.
Dee Shore (10:19):
While researchers and growers work to overcome marketing and production hurdles, growers face uncertainty surrounding laws and policies. As Mark Spitzer says:
Matt Spitzer (10:30):
A major challenge is regulations, instability of regulations. And it’s hard to allocate funds towards something that is uncertain.
Dee Shore (10:39):
Marne Coit’s a lawyer, and even she says it’s hard to keep up.
Marne Coit (10:45):
In all my years working in agricultural law, this is the crop that I would say the law changes the fastest, which keeps it interesting from a legal perspective. From a grower perspective, or if you’re in the industry, obviously it is fairly disruptive.
Dee Shore (10:59):
Coit sees the industry at a legal crossroads, still transitioning between rules enacted under the 2014 and the 2018 farm bills. The latest farm bill gave the U.S. Department of Agriculture authority to come up with regulations for hemp production. And in October 2019, the agency said state pilot programs would expire in a year. But with less than a month before that expiration, Congress passed a law allowing states to continue pilot programs through September of this year. After that, growers could face a different set of rules than those in effect under the state program.
Marne Coit (11:43):
Every time you have something like that where you expect that the law might change, but you’re not sure, and you have maybe 30 days or less before the law might change, it introduces a lot of uncertainty into the market. And I really do think that is hard for our growers. I do think that there might be another maybe year or two of uncertainty in terms of the law, then hopefully things will settle down a little bit. We’ll have a little bit more continuity. We’ll know what to expect from the law and the industry can thrive.
Dee Shore (12:17):
Spitzer agrees that stability and regulations will help the industry, as will the research that’s underway at NC State and elsewhere.
Matt Spitzer (12:26):
I’m just really encouraged by the amount of research that’s being done by NC State and the progression of information and knowledge around growing the plant successfully. Everyone in the industry learned lessons as to how best to produce the plant in the Southeast. And so every year, there’s going to be more resources for farmers to help them be successful.
I’m encouraged to see new genetics come onto the market that are just lightyears ahead of where we started with better quality plants: more disease resistant, more pest resistant, and a better understanding of the unique challenges that face the plant from a growing standpoint, selling standpoint, and everywhere up and down the chain.
Dee Shore (13:12):
Spitzer has been growing hemp since the North Carolina pilot program started. He and his business partner had been in greenhouse vegetable production and decided to take a shot with hemp. Though the future remains clouded, Spitzer says he intends to stick with the crop.
Matt Spitzer (13:31):
The industry is here to stay. That’s not in question. The question is, will consumers continue to pick it up and buy products as fast as farmers want to grow it? It’s uncertain, but it’s also not going anywhere. From day one, we have said that we’re not in this for the short haul. We’re not in this for a quick buck. We’re in this for the next 30 years. We’re in it for the long haul. There’s nothing we would rather be doing. It’s an amazing plant to grow, and it’s an amazing industry to be in. I’m super optimistic and I just can’t wait to see what the next few years hold.
Dee Shore (14:13):
Thanks for listening today. We hope you’ll join us again for the next episode of Farms, Food, and You. To learn more about the College of Agriculture and Life Sciences and our podcast, visit go.ncsu.edu/farms. While you’re there, share your thoughts. We’d love to get your ideas and to hear what topics you’d like for us to explore in future.