Now the industry faces the added, colossal challenge of the COVID-19 crisis, which is having a particularly hard hit on farmers and startups.
The good news is, the fact that hemp is federally legal means that there is available financial relief and support for the industry.
Legal hemp businesses are eligible for Small Business Administration loans, federal stimulus funds, federal and state agricultural grant programs and tax relief, among other benefits.
The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provides relief for small businesses affected by the COVID-19 crisis. But SBA policy precludes marijuana and ancillary businesses from eligibility.
SBA loan programs include the:
cPaycheck Protection Program (which quickly exhausted funds but was replenished by Congress last week by $321 billion).
- Economic Injury Disaster Loans (EIDL) and advances.
- The latest stimulus bill included clarity on the eligibility of agricultural enterprises for EIDL funds, spec [...]
These days, it pays more to be in the hemp business than the tobacco business.
Salaries for employees at hemp companies are far outpacing those of their counterparts in the tobacco industry, according to an analysis by Hemp Industry Daily.
At the top of the list, hemp CEOs are being paid an average of $255,000 annually, while CEOs in the tobacco industry earn $156,660.
There’s also a large disparity between hemp and tobacco workers in lower-ranking jobs. For instance, a master of hemp extraction makes an average of $100,000 a year, while the extraction lead and the hemp extraction technician make $88,750 and $70,000 respectively. Meanwhile, the pressing and compacting machine setters at tobacco companies, along with operators and tenders, make an average of $42,110.
A reason for the wage gap is that, unlike tobacco, hemp is an emerging market, which carries some risk and higher salaries are necessary to attract the top talent to leave Fortune 500 companies behind, according to Tom Si [...]
For an idea of how federal prohibition skews a labor market, look no further than the boom-boom hemp industry.
The end of prohibition caused seismic shifts to a labor landscape with aftershocks that continue to unsettle the industry more than a year later – and offer new job opportunities for folks who haven’t previously considered careers in cannabis.
Hemp entrepreneurs hoping to take immediate advantage of legalization launched broadacre hemp cultivation in 2019. Cannabis-industry recruiters saw an incredibly tight market for farm managers with experience overseeing large outdoor farms of any crop.
One recruiter saw placements of:
$140,000-$160,000 per year for farm directors in Nevada.
$110,000-$130,000 per year for cultivation directors in Florida.
$95,000-$105,000 for field managers in California.
Salaries were driven even higher because the overall job market for experienced managers is so tight. [...]
The new normal that we’re all adjusting to as a result of the global pandemic has implications for a wide range of industries, hemp included. Hemp prices in 2020 were not projected to see much upward movement without a major regulatory change by the FDA that would drive demand by larger industry. Overall volume is down, with very little biomass trading hands. Extractors have deep inventories of extracts, too deep, and many facilities are idle, or pivoting to THC remediation. Tolling fees are very competitive in markets like Colorado, where extraction capacity is highest. T-free distillate – and distillate in general – is moving more than anything, and this in turn drives some demand for crude.
Certified organic products are increasing in volume, for biomass, flower, crude and distillates. This and cGMP practices can have an impact on hemp pricing and CBD prices, with the market bifurcating over processes using premium inputs and manufacturing practices and those that are not [...]
The USDA offers insurance to help protect farmers from forces they have no control over. Insurance offered by the federal government is a fundamental part of much of the farming that happens in the United States.
It allows farmers to survive in an industry that’s both unstable and provides thin margins.
Hemp, though it’s now federally legal, was not eligible for this insurance—until now.
The USDA’s multi-peril crop insurance has been around since the 1930s, and forms part of the backbone of the farm safety net.
As its name suggests, it covers multiple obstacles that farmers might face, including pests, [...]
USDA’s Risk Management Agency announced a new crop insurance option for hemp growers in select counties of 21 states in 2020. The pilot insurance program will provide Actual Production History coverage under 508(h) Multi-Peril Crop Insurance (MPCI) for eligible producers in certain counties in Alabama, California, Colorado, Illinois, Indiana, Kansas, Kentucky, Maine, Michigan, Minnesota, Montana, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Tennessee, Virginia, and Wisconsin.
The MPCI coverage is for hemp grown for fiber, grain or CBD oil for the 2020 crop year. It is in addition to the Whole-Farm Revenue Protection coverage available to hemp growers announced earlier this year.
“We are excited to offer coverage to certain hemp producers in this pilot program,” said RMA Administrator Martin Barbre. “Since this is a pilot program, we look forward to feedback from producers on the program in the coming crop year.” [...]
Nearly 50% of bank respondents who are currently not banking hemp said they will extend services to hemp-related customers in 2020 according to a recent Wisconsin Bankers Association (WBA) survey.
WBA’s annual Bank CEO Economic Conditions Survey asked three hemp-related questions in addition to more traditional economic inquiries. The responses highlighted that many Wisconsin banks have been working through the complex regulatory issue of hemp and are now better prepared to assist their customers.
“Wisconsin’s community bankers strive to help their customers and communities. The reality is that hemp is a very new and complex issue from both a regulatory and business viewpoint,” explained Rose Oswald Poels, WBA President and CEO. “It takes time to work through these complexities. Because there is no one-size-fits-all approach, each bank’s approach and timeframe will be different.” [...]
WISCONSIN DELLS – While most farmers don’t think of growing industrial hemp as a “silver bullet” for farm income, many are interested in it as a way to diversify their farming operations and add another potential income-generating enterprise to their farms.
For Wisconsin’s bankers, dealing with hemp growers poses some new challenges, which were outlined at a Wisconsin Bankers Association seminar Nov. 21 in Wisconsin Dells that attracted 145 state bankers. Scott Birrenkott, an attorney who is assistant director of legal affairs with the association, walked bankers through some of the things they might deal with if they have customers who want to grow hemp.
First, he wanted them to know what hemp is (and what it isn’t). Though admittedly not a botanist, Birrenkott said hemp is a taller, skinnier plant with most of its leaves at the top while marijuana – hemp’s psychoactive cousin – is a bushier plant with broader leaves and budding flowers.
“They come from the same ge [...]