By Jeff Greene
Let me start by saying, I watched the 2018 Farm Bill get passed in Congress and signed by the President. I lobbied the Florida legislature to pass their hemp bills. I expected the industry to grow like a hockey stick, but I didn’t account for a pandemic, glass shortage, drivers and inflation.
A crippling couple of bankruptcies early in the industry’s development, GenCanna Global and United Cannabis, caused many farmers to follow into bankruptcy. Farmers that were promised $20 -$30 per pound and even got that for a season or two ended up selling for $.50 to $1.00 per pound and many vowed to never grow hemp again.
No, the industry is not dying, but it is consolidating. Green Roads was bought by Valens and Just CBD was acquired by Flora Grown, both publicly traded companies. Both were necessary for the companies to grow and thrive.
Hundreds of hemp companies have gone out of business, but almost as many, have started. The reality is that the plant is amazing. Now that the FDA is allowing research; scientists will soon verify what the industry has been preaching.
That doesn’t stop the FDA from scolding companies for making those claims prematurely. Early in the game, getting a letter from the FDA was like a badge of honor, that you were fighting the big bad government and consumers tended to rally around them. Lately, the opposite is happening, industry long-timers have navigated the waters of compliance and seeing the new players making the same mistakes is now looked at as ignorant.
I work in Florida; our trade association has shrunk in the last year and is only recently starting to rebound. Nationally, the Hemp Roundtable, National Hemp Association, National Industrial Hemp Council and Hemp Industries Association are all fighting for power, and many are trying to separate the plant into flower and fiber. There will come a time when one or two remain and the industry will do just fine. The egos and power that are accumulated at each organization certainly have the staying power but at some point, the war will be over, and the industry will adapt.
As long as the Farm bill gets updated every five years or so, there will always be something of a fight. As long as state hemp programs are subject to change with different political parties in office, the uncertainty will return, and lobbyists and powerful consultants will push for more.
I wouldn’t call the current environment phoenix-like, the industry never burned to ashes. But I do see a bit of a rebirth in the industry. Education is still necessary, and we still have to explain the difference between marijuana and hemp way too often. Cannabis has not replaced those two words yet, but I hope it does someday. The fear of THC is the real obstacle to overcome. It takes a decent amount of THC to get psychotropically affected, products with less than 0.3% THC will become more widely accepted eventually. Drug tests are currently set to report any more than 50 nanograms of THC as a positive test. This is believed to be too low and caused many hemp users to be lumped into the current violation range. I have always stated that there are people who want to get high and there are people who want to get well. First responders, truck drivers, pilots and the military are all getting tobacco and opioids pushed on them because even the smallest sampling of THC and they will be fired.
Those pioneers who started this industry are getting tired and the new businesses that are coming in have to continue to educate. Whether for building products or consumption or clothing or cars, the industry will have to overcome systemic legacy barriers. Those barriers were built to keep out competition and they take time to overcome. Building products are getting their certifications, research is starting regarding the cannabinoids, entrepreneurs are trying out hemp as a battery, fiberglass, steel, fiber, paper and drug replacement. Other uses will come to market and slowly the industry will mature into the multi-billion-dollar industry everyone predicted.
Scaling a company is expensive and finding investors that you can trust with your vision is not always easy. There are plenty of products and plenty of opportunity left in the industry. The rush to get state licenses for medical marijuana has not proven to be the boon that everyone believed – verticality is not all it’s cracked up to be. Hemp has shown that horizontal development can work better if properly regulated. Now we just have to get past the pandemic and show the real promise that this plant offers.
Jeff Greene, Founder and Business Development Director, The Florida Hemp Council, can be reached at Jeff.Greene@TheFLHC.org or (954) 304-0791 or visit https://calendly.com/jeffgreene.