Here’s How Black Farmers Are Changing The Hemp Industry
Future of hemp unclear, mixed projections for 2020
The acreage of hemp production was predicted to decrease in 2020 for the first time since 2014. That was when the 2014 Farm Bill authorized hemp pilot research programs throughout the nation. Although new hemp states have come on board due to the passage of hemp laws and garnering of USDA approval in 2019, general acreage numbers up to this point are sadly lower than last year. If these numbers are telling, what does the future hold for hemp acreage production and from byproduct hemp products?
Black hemp growers make a comeback
One player in the farming industry that has been left wanting somewhat is the black farmer. But why, when co-ops, which offer much diversity, used to be a mainstay in American farming culture? Co-ops were a way out of sharecropping for black farmers. One woman, Minnesota entrepreneur Angela Dawson, thinks hemp could be part of black farmers making a comeback. Dawson runs a 40-acre co-op, which grows mainly hemp but also some seed and other agricultural products.
In an interview with Hemp Daily, she said, “Minnesota is a popular place for having co-ops because of past success they’ve had. In Minnesota, they grow 10,000 to 30,000 acres of hemp.” “Hemp growers are growing fewer acres of hemp than they did in 2019, mainly because of directorial changeability”, she added.
But could black hemp farming become part of a larger overall hemp comeback in 2020? It seems it might be a wise choice to start investing in co-ops and hemp growing chains that are owned by black business owners in 2020.
Hemp growers may be under suspicion from banks
Some banks, it seems, are wary of hemp growers and may be quick to file SARS (Suspicious Activity Reports) against them. But officials from the U.S. Financial Treasury Department’s Financial Crimes Enforcement Network (FinCEN) warn that banks should watch over hemp growing businesses as they would any other business, filing only for suspicious activity such as:
- Growing hemp in a state or jurisdiction where hemp is currently illegal (South Dakota, Idaho, Mississippi).
- Using a state-licensed hemp business as a cover to launder money derived from criminal activity or federally illegal marijuana-related activity.
- Hemp producers concealing or disguising involvement in a marijuana-related activity.
- Not providing sufficient licensing information or demonstrating their operation is consistent with applicable law or continued operation after license revocation or noncompliance with the law.
With an added focus on hemp farms, let’s hope they can thrive under pressure, especially for the sake of those who’ve already invested.
States making comebacks in hemp growing/processing
States that used to be leaders in U.S. hemp production in 2014 have observed a notable decrease in production. Out of the top 10 hemp states by acreage licensed in 2018, just two — New York and North Carolina — have observed a surge in authorized acres and growers that are registered. This year, outstanding licensing information for new and relatively new hemp states show enthusiasm for the new supply of hemp, inclusive of:
California- 32, 504.0 acres: licensed 655 growers and breeders
Arizona- 34,000 acres; 1,520,000 sq ft., 157 growers, 60 processors
Illinois-26,340 acres; 770 growers; 317 processors
Michigan-13,225 acres; 11 million indoor square feet; 806 outdoor growers and 350 indoor growers; 447 processor handlers
Florida-16,000 acres; 386 growers; 9 processors
Kansas-9,903.05 acres; 214 growers; 23 processors
It seems we can’t count licensed numbers as concrete planted numbers. Please note that a processor here is something that turns the raw hemp product into an edible form. On the other hand, a breeder is a person who assesses plant traits and can modify them. A grower is simply an individual that grows individual food crops, sometimes on the smaller side.
It seems that in these states there are signs of hemp planting and growing progression, but let’s keep in mind these are just six states. Missouri tracks this as a pre-season amount of production. It may be registered for 21,000 acres, but this state asks for planned acreage and square footage, stating that many farmers register more land to grow on but don’t normally plant more than their reported scheduled plot.
The change ends up being that farmers in Missouri state they are scheduled to create 3,892 total acres this term. So it might not be wise to overinvest based on land acreage since farmers aren’t actually using all of their lands.
CBD flowers and oils on the decline
The CBD oil and flowers derived from the hemp plant have their unique market values. One part of hemp is the biomass, or whole hemp plant matter. Most markets use biomass to create CBD, which is made from the leaves and stalks in a wide range of supplements. CBD flowers sold for almost $349 per pound wholesale in June 2019, but dropped to an average of $319 per pound in October segued by a more acute drop in December.
The CBD flower currently sells for $226 per pound, constituting a 35% drop in 6 months. It would seem that it’s a good time to buy with prices being so low, but perhaps a bad time to invest. However, it may be good to invest since people may buy more when prices are low. Either way, the CBD hemp flower pricing has been on a steady decline in price from June 2019 to now.
A precarious investment
At the end of the day, hemp is a precarious investment because of its downward spiral. While hemp does show signs of growth in certain states, other factors still have to be accounted for, such as the fact that many farmers register more land than they plant on. Plus the hemp industry faces some suspicion of being involved with manufacturing marijuana, which is why banks are acting suspiciously.
Hemp may be gaining popularity with certain populations, however. It seems that, given the investments of black farmers and co-ops, hemp may be uplifting communities and be a worthy investment because of that, too. If you are a buyer interested in obtaining the CBD flower, the price that has seen a 35% drop from 6 months ago. While hemp production did fall 9%, it also grew by 27% among new growers, so consider that larger than 9% percentile as you invest for the new year.
What do you think about the future of the hemp industry? Let us know down in the comments.
This article originally published on GREY Journal.
This article originally published on GREY Journal: https://discovergrey.com/hustle/finance/heres-how-black-farmers-are-changing-the-hemp-industry/
