Majority of Md. hemp crop from last year unsold, in dry storage
Up to 70 percent of Maryland’s hemp crop from last year remains unsold in dry storage, even as the state’s farming community ramps up for its second growing season, industry leaders said last week.
A lack of statewide processing and wholesaling infrastructure and a national market flooded with product are keeping growers from moving much of last year’s crop even as more of them sign up to grow it again this year.
“It’s put our farmers in a tough position,” said Kevin Atticks, head of the Maryland Hemp Coalition. “There is a healthy consumer interest in the product, but when you have every state with many farmers growing hemp and few states with large-scale retail processing, you end up with this stalling.”
About 80 farmers have signed up with the state department of agriculture to grow hemp this year, a more than 20-percent increase over last year when farmers registered to raise about 1,400 acres of the crop. State officials said it’s unclear how much of that acreage was planted, but they expect that this year’s roughly 1,100 registered acres is a more accurate reflection of the state’s planted crop.
Most farmers in the state have chosen to grow hemp for the $5 billion CBD market, which has become oversaturated. It’s a problem only exacerbated by the coronavirus pandemic, said Colby Ferguson, government relations director at the Maryland Farm Bureau.
“Outside of a farmer doing his own product, it’s going to be tough if you need that hands-on manufacturing,” he said. “Some (farmers) are gung-ho, ready to rock and roll, and others are kind of scared to death of whether they should plant it or not. … I still would highly recommend don’t put a seed in the ground unless you’ve got somebody to sell it to, particularly in this economy.”
Dawn Gordon at Fingerboard Farm in Frederick County is one of the eager growers. She’s invested $117,000 into her farm, which produces hemp she sells on her website along with products from other companies. She raised 3 acres last year, mostly for smokable hemp flower, which costs as much $130 per ounce on her website.
Her farm produced about 1,000 pounds of hemp last year, and most of it was used or sold, she said, but she’s a relatively unique grower in the state.
“I’m really pleased,” she said. “If you’re going to grow it, you have to be marketing it.”
Barry Pritchard, owner of SunX Analytical, a hemp testing and processing company in Cambridge, said processing capacity isn’t the state’s primary problem. His company, he said, is only running at 20-percent capacity. But it costs SunX Analytical about $3,600 to process 200 pounds of hemp biomass for the CBD market. Under current conditions, the processed crude CBD material sells only at cost.
“There isn’t a market for the crude materials right now,” he said. “In my opinion, there’s been an overproduction of everything.”
Farmers are also dealing with the consequences of working in a brand-new industry. Some of the state’s farmers signed contracts with buyers who turned out to be disreputable, abandoning them at harvest, said Eryck Stamper, co-owner of the Maryland Hemp Exchange, which has sought, unsuccessfully so far, to organize some of the state’s growers into a cooperative raising the same X-59 dual-fiber grain seed. Other farmers struggled with their crop or plowed over it after learning how labor-intensive it was.
“A lot of them entered into some bad deals with poor genetics,” he said.
Stamper said he’s working with five growers who are raising a strain of Russian ruderalis hemp for up to $20 per plant. Each farmer has been given 50 seeds a piece, and Stamper’s working with the pharmaceutical industry. After this year, he hopes to give farmers up to 8,000 seeds each.
The state needs to do a feasibility study to fully capture what it will take to build the necessary infrastructure, he said.
Pritchard said he’s looking forward to the FDA’s easing of CBD restrictions in consumer products, such as sports drinks, energy bars and other food products. It’s a process that could take years.
“I think we’ll have 10 times more demand and then we’ll have a home for all of this product,” he said. “Right now, there’s just too much of it.”
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