‘CBD craze spurred reports that you can make money overnight, and that is not the case’
The euphoria from the burgeoning prospects of U.S. hemp, grown as an alternative to mainstream crops caught in a trade war, has turned to caution.
In the first year of widespread commercial cultivation, hemp planting quadrupled as growers sought a profitable alternative to crops such as soybeans ensnared in the U.S.-China trade dispute. The hemp-derived compound cannabidiol, known as CBD, has a non-psychoactive cannabis ingredient at the center of a wellness trend sweeping the nation, showing up in everything from beauty products to dietary supplements.
While Congress approved hemp cultivation, the Food and Drug Administration hasn’t cleared CBD yet for use in food and drinks, and the murky regulatory environment has limited expansion in the processing sector. Delta Separations, a Cotati, California-based manufacturer with booming sales of extraction machines used to make CBD, estimated that as much as US$7.5 billion in hemp may rot on farms.
“There hasn’t been the ability to install the infrastructure to support” the fledgling cash crop, Roger Cockroft, chief executive officer of Delta Separations, said in a telephone interview. “Farmers are scrambling.”
Banks also are reluctant to lend to businesses that may appear to be linked to marijuana, curbing prospects for processing expansion, Cockroft said.
Congress legalized industrial hemp and CBD in 2018, clearing the way for expanded planting. Growers seeded 142,691 acres this year, according to Department of Agriculture data on Sept. 12. With some farmers probably withholding data from the government, total acres may reach 230,000, according to the advocacy group Vote Hemp.
Published: September 27, 2019
Founder & Interim Editor of L.A. Cannabis News