DELTA COUNTY — On a sunny fall day at the tail end of harvest season, wagons piled high with what looks like bushy, green tumbleweeds are rolling in caravans past a dry, rattling cornfield, heading toward a new hemp-processing plant near Delta.
These loads are piled high with hopes. Growers are banking on hemp to bring a payday that outstrips any other crop grown in the fertile Uncompahgre Valley. The shift to hemp is obvious in this valley: more than 250 registered hemp fields have replaced traditional crops like corn, soybeans and alfalfa. They fan out along U.S. 50 and line up on the mesas next to grain and vegetables.
Since December, when the federal 2018 Farm Bill moved hemp out of a controlled-substances drug classification and deemed it to be an ordinary commodity, growers around Delta and in all of Colorado’s agricultural regions have been racing to get in on the ground-level of a hemp frenzy.
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It is driven by a big demand for the all-purpose, officially-unproven magic elixir of CBD oil. Consumers are snapping it up to treat everything from eczema to depression, and in the process, pushing the outer limits of profits for growers as sky high as $60,000 an acre.
The promise of hemp riches that far outstrip the going rate for traditional crops has unleashed what growers are referring to as a modern version of the Gold Rush. This rush has the same outsized get-rich-quick dreams, the naivete, the flimflam profiteers and the downright crooks.
The payoffs are big for some who have learned to navigate the still-murky complexities of the newly legal status of hemp while also beating the traditional gamble involved in any farm crop. The failures can be huge for others.
“This started out as the Wild, Wild West. It evolved into a full-on 1894 Gold Rush. And it’s about to turn into a full-on Chicago fire,” said Matt Miles, a Uncompahgre Valley entrepreneur who recently opened the General Processing hemp plant in Delta.
Acres planted in hemp up by 50,000
Colorado now has five years of hemp-growing experience and leads the nation in production. In the past year, more than 80,000 acres have been planted by more than 2,500 registrants (the term the state uses in its accounting for those trying their hand at hemp growing.) That is a 50,000-acre jump from last year.
Or, as Tom Lipetzky, with the Colorado Department of Agriculture, puts it, that is 50,000 acres of other crops that have been converted to hemp. Fifty-two of Colorado’s 64 counties now have registered hemp crops.
Like the Uncompahgre Valley, the state’s other big agricultural areas around Greeley and Pueblo are welcoming hemp as a new-kid-on-the-block economic development driver.
Greeley is hosting increasingly popular hemp roundtables where management improvements and hoped-for state regulations are discussed by farmers who not that long ago were dead set against anything remotely related to cannabis.
A $30 million hemp processing plant is slated to open there by the end of the year.
Pueblo County has created hemp-friendly zoning and planning regulations and is offering tax credits and cash grants for hemp operations that meet certain job quotas. Colorado City, a tiny Pueblo County community, just became home to the nation’s largest hemp processing facility. The 250,000-square-foot plant is projected to employ 250 people, a big deal in a town of fewer than 2,500.
The Colorado Department of Agriculture is jumping in to help the emerging hemp industry by partnering with nine other Colorado agencies and departments to create a hemp-help initiative called the Colorado Hemp Advancement and Management Plan.
Covers everything from seed to sale
That plan, which builds on Gov. Jared Polis’ priority of promoting this high-value commodity, is examining the entire hemp supply chain – from cultivation to market. In the spring of 2020, the hemp advancement group is expected to have a management plan that will cover everything from seed procurement to selling hemp products.
But growers are complaining that is not quick enough: the state and federal governments are moving too slowly to accommodate the hemp rush and have not done enough to make it easier to grow what amounts to a new crop after a 48-year spell of prohibition. Quality controls on the final product – the CBD oil – are sorely lacking.
“I am Mr. Anti-regulation, trust me,” Miles said. “But we need some rules to level the playing field.”
Hemp’s most complicated wrinkle is that it must have less than 0.3% of THC, the psychoactive ingredient that is what differentiates hemp from marijuana. If a hemp crop climbs over that limit, state regulations demand that it be destroyed. Growers would like to have the level of allowed THC raised to 1% – an easier mark to hit, but one still far below the 10% that is the threshold for getting a buzz from marijuana.
That increase has been discussed at Hemp Advancement meetings. But it would not be a quick fix. It would require an amended bill along with more trials and additional funding, said Colorado Department of Agriculture Hemp Program Manager Brian Koontz.
That is not what Delta hemp grower Bert Groda wants to hear.
“There is a bureaucratic load that doesn’t need to be there. We are out here beating our heads against the wall on that arbitrary number. We need to raise it to 1% and it would relieve us of a great deal of sleepless nights,” said Groda, who has been farming for 56 years.
Groda added hemp to his crop lineup five years ago and this year will be harvesting about 400 acres. Groda expects to make, at minimum, three times what he will earn on his corn. It could be 10 times the corn profit if he looks at a reasonably high profit of $10,000 per acre.
But, even with a good harvest this year, Groda does not have a pie-in-the-sky attitude about hemp growing. He has seen too many fail.
“I see a bright future in it, but I would say, ‘Just don’t invest more in it than you can afford to lose. Don’t sell the farm to put in an extra 20 acres of hemp,’” Groda said.
State Sen. Don Coram, a Montrose Republican who is growing 25 acres of hemp near Delta with partners, agrees.
“Unfortunately, I think a lot of people will lose the farm,” he said. “There is a good possibility a half of hemp farmers will lose money this year. A lot of people got into this not aware of what it would require. A lot of good farmers don’t know anything about cannabis. And a lot of cannabis growers don’t know anything about farming.”
Hemp is much more complicated than crops like wheat or alfalfa. Because of its marijuana association, multiple reports must be filed throughout the planting, growing and harvesting process. There are random inspections to make sure the hemp is not “hot” – that it hasn’t inched over that 0.3%.
Growers need to plant feminized seed because plants grown from that seed produce the most oil and resin. If they are around male pollinator plants, the oil production plunges. The problems, growers say, is that not all seed dealers are reputable. Black-market profiteers and hucksters have tended to gravitate to this end of the business because the potential profits are high. Seed can go for as much as $8,000 per pound.
At the other end of the hemp commodity chain, some growers have been ripped off when they deliver hemp to processors but are not paid for it.
“There are a lot of great whites and piranhas in the water that will take your money,” Groda said.
Hollis Glenn, the agriculture department’s director of Inspection and Consumer Services, said hemp dealers are supposed to be licensed with his office just as other commodity dealers are.
“One thing we want farmers to know is that they should make sure they sell their product to a licensed and bonded dealer,” he said.
If a dealer doesn’t pay, the agriculture department can investigate, Glenn said. Failure to pay a farmer for product is a felony.
Miles, who opened his processing plant late this summer, said unscrupulous CBD processors are another point of potential harm in the hemp industry. He said some process hemp that hasn’t been grown correctly and has high levels of pesticides and herbicides.
That puts bad products on the market and taints consumer confidence. He said he has seen what he terms “miraculous” effects on health problems with good products.
“The FDA needs to give clear guidance on what is allowed. The Department of Agriculture needs to pay attention to how stuff is grown. Ultimately, there needs to be a chain of custody with hemp grown for CBD kind of like there is for milk in the dairy industry,” he said. “No one is watching now. There is no accountability.”
“The vast majority of growers are well-intentioned,” he said. “As you get into extractors and retailers, some don’t care.”
Coram said he would like to see comprehensive background checks for providers of hemp clones, for processors, and for those who offer to plant hemp fields for growers.
Groda said he expects this somewhat lawless, Wild West aspect of hemp and the potential for Gold Rush profits will last for another three to five years. Then, it will be just another farm crop, albeit one that is still in big demand because CBD oil will still be a sought-after natural cure-all. Those who have learned to navigate the system and grow good crops will remain.
“I see a bright future in it,” Groda said. “But I just don’t invest more in it than I can afford to lose.”