When Senate Majority Leader Mitch McConnell is on the same side of a cannabis industry issue that most people in the business are, you know something’s up: “The senator most responsible for legalizing hemp is now trying to use a legislative finance maneuver to speed up federal rules on putting hemp extracts [CBD] in food and beverages,” reads one report. And that’s because … he’s been persuaded by the scientific literature of the health benefits of cannabinoids such as CBD?
Or is it because the biggest casualty so far in the US-China trade war is a key constituent of his party’s base – the American farmer. For example, by 2018 the trade policy yield was a $10 billion drop in agricultural exports to China – then things got worse. This past summer China officially cancelled all purchases of U.S. agricultural products leaving tons of crops in storage and farmers in debt.
So like a needle pulling thread, CBD is seen as the in-demand consumer good that pulls farmers out of debt because they can grow more hemp, the crop from which the vast majority of CBD is derived. For instance, one widely quoted industry estimate, from market researchers the Brightfield Group, has the hemp-CBD market hitting $22 billion by 2022 – up from a “mere” $600 million in 2018.
Hence the recent data from the US Department of Agriculture that shows US farmers have more than quadrupled land planted with hemp in the past year, from 27,424 acres in August 2018 to 128,320 acres today.
But getting hemp-derived CBD just right is a tricky business. For example, hemp must be destroyed if it “tests hot,” meaning it contains more than 0.3 percent THC. Processing can require outside machinery and expertise to dry, trim and grind the raw hemp. And labor costs are high because fields need to be tended by hand as male plants have to be culled because a pollinated female will stop producing CBD. Indeed, a 27 Sept. Financial Post report says 65% of hemp farmers are still looking for buyers.
And so for some, the stakes are high. As Bob Kuylen, who’s farmed for 35 years in North Dakota, told CNBC.
It’s really, really getting bad out here. Trump is ruining our markets. No one is buying our product no more, and we have no markets no more. There’s no incentive to keep farming, except that I’ve invested everything I have in farming, and it’s hard to walk away. When four to five generations ahead of you have succeeded, and you come along and fail, you don’t see it as not your fault. You snap.