Kentucky got off to a quick start toward putting its oversight strategy in place for hemp production on Thursday when its agriculture commissioner filed a plan with federal regulators — the same day hemp was legalized as a farm commodity.
State Agriculture Commissioner Ryan Quarles submitted the regulatory plan to the U.S. Department of Agriculture on the same day President Donald Trump signed the new federal farm bill into law. The measure that cleared Congress removes hemp from the list of federally controlled substances. It treats the low-THC version of the cannabis plant like any other agricultural crop. THC is the cannabis compound that gives marijuana its high.
"Kentucky's regulatory framework perfectly aligns with the requirements spelled out in the farm bill," Quarles said. "Hemp growers, processors and manufacturers deserve swift action so they can proceed with confidence."
He and other state leaders hope to make Kentucky the center of U.S. hemp production and processing, he said.
Hemp is deeply rooted in Kentucky's past. The crop was historically used for rope but has many other uses, including clothing and mulch from the fiber; hemp milk and cooking oil from the seeds; and soap and lotions. Other uses include building materials, animal bedding and biofuels. Hemp-derived cannabidiol, or CBD oil, has become increasingly popular as a health product.
Federal legalization could triple the overall hemp market to $2.5 billion by 2022, with $1.3 billion of those sales from hemp-derived CBD products, according to New Frontier Data, a cannabis market research firm.
Hemp-related provisions inserted into the new farm bill give state agriculture departments primary authority for oversight of the crop. The measure sets minimum regulatory requirements that states must meet to win USDA approval. Quarles' action puts Kentucky at the front of the line in seeking USDA approval for its hemp program.
Growers and processors would continue to undergo background checks and be licensed under the new regulatory framework, state agriculture officials said.
Law enforcement agencies would know where the crop is grown, stored or processed locally in case they want to do inspections. That provision is meant to alleviate concerns that marijuana could be mingled with hemp. Kentucky's agriculture department will continue its THC testing and inspection program to ensure the crop is compliant, officials said.
Hemp advocate Jonathan Miller, general counsel to the U.S. Hemp Roundtable, a coalition of hemp companies, said Quarles' quick action in seeking USDA approval for the state's regulatory plan is another sign Kentucky is "open for business" for the emerging hemp industry.
Miller said Kentucky is poised to become a leader in "an exciting, emerging, multi-billion-dollar hemp industry" being unleashed in the U.S.
Senate Majority Leader Mitch McConnell, R-Ky., helped push Congress to legalize hemp. Another Kentuckian, U.S. Rep. James Comer, was an early hemp advocate when he was the state's agriculture commissioner.
"I am confident the ingenuity of Kentucky's farmers and producers will find new and creative uses for this exciting crop," McConnell said Thursday. "We are at the beginning of a new era, and I cannot wait to see what comes next."
Hemp's comeback started with the 2014 federal farm bill. McConnell helped push for a provision allowing states to pursue hemp research and development. That allowed the crop to be grown on an experimental basis. A mere 33 acres (13 hectares) of hemp were planted in Kentucky in 2014.
In 2018, Kentucky farmers planted more than 6,700 acres (2,710 hectares) of hemp — more than twice last year's production, according to the state's agriculture department. More than 70 Kentucky processors are turning the plant into products. Those processors paid $7.5 million to Kentucky growers in 2017 to help supply hemp and reported $16.7 million in gross product sales, the state agriculture department said.
That's barely a blip on the radar for Kentucky's diversified agriculture sector.
But the state's agriculture department received more than 1,000 applications from farmers and processors looking to participate in the 2019 hemp program. In another sign of hemp's growing popularity, an informational and networking session in October in Elizabethtown drew about 750 farmers, processors, manufacturers and others interested in hemp, the department said.
Last week, Kentucky-based hemp processor GenCanna Global USA Inc. announced plans to build a $40 million processing plant at Mayfield in western Kentucky. The venture is expected to create 80-plus jobs and a new market for area hemp producers.