Vermont Hemp Harvest Brings In Less Green Than Farmers Hoped For

Oct 22, 2019

In Vermont, the number of farmers growing hemp has more than doubled since last year. 

That's because the Agriculture Improvement Act of 2018 made it more legit to grow the crop, which is closely related to marijuana but has far less of the pyschoactive THC. 

Hemp can be used to create increasingly popular CBD products — and farmers hoped that would bring a big paycheck. But that's been far from the case.

VTDigger reporter Anne Wallace Allen has been looking into this, and joined us to discuss the outsized expectations.

Anne Wallace Allen, VTDigger: A lot of people came into the state and leased land, and many [real estate agents] told me that people from as far away as India were buying land in remote areas of Vermont to grow hemp.

And even back then, many farmers and people in the industry were saying there are too many people getting into this who are not prepared. They don't have contracts with buyers. They don't have contracts with processors. And also, there's a lot more hand work than people expect when it comes time to harvest.

So many people were saying if you don't have the equipment and the farm, it's not worth doing this, because you shouldn't invest any capital in it, because you might not get any return.

Carrie Healy, NEPR: What was it that attracted so many people to start growing this agricultural crop?

There were a lot of things. First of all, milk prices have been low for a very long time — four or five years. There were a lot of dairy farms going out of business. So there were people who have fields, they have equipment, they know how to grow things. They were looking for ways to diversify, and hemp has a lot of promise.

And then, last year when the market wasn't glutted, there were a lot of success stories of people selling their hemp and making a lot of money. That, along with the passage of the farm bill, was another thing that motivated people to just flood into hemp-growing this year.

The federal farm bill opened up the hemp market, but the FDA still regulates a byproduct: CBD. Are folks feeling government regulations are hampering what they're doing, or does that worry them at all?

That is a huge gray area. So it really depends on who you talk to.

I talked to Lake Champlain Chocolates the other day. They're basically the only food product I can think of that hasn't put hemp in their food. And they said, "We would not do something without full permission from the FDA."

Most of the people who have rushed into the hemp market are very comfortable with the idea of taking the financial risk, knowing that CBD is such a popular juggernaut at this point, that it almost doesn't matter what the FDA comes out and says.

Hemp seedlings growing in a greenhouse at Green Mountain CBD.
Credit JACOB GOLDSTEIN / VPR

Are farmers going to be able to make it after they see the harvest rot in the fields, because they didn't have contracts signed early enough? What are they saying?

Most of the farmers I talked to said that the only way that you can possibly make money this summer, given how much hemp is being grown — not only in Vermont, but around the country — is if you had a contract with a processor lined up before you planted.

The only exception to that is some of the big companies that are completely vertically integrated.

I went up to Hyde Park, Vermont, and visited one of those. It's way out in the middle of nowhere. They have a 20,000-foot drying shed that they heat up to 140 degrees every night so they can dry all of the hemp. They're growing 100 acres, which is an immense amount by this summer's standards, because it requires a colossal amount of hand work.

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Zoom in to see the smiles. We have an awesome team and had an amazing season. . . #teamwork #vermont #organic #hemp #cbd #organichemp #cbdoil #vthemp #foliage #farming #team #sunsoil

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Oct 15, 2019 at 9:01am PDT

They have 100 employees that they're paying $20 an hour onsite — just temporary employees who are bringing the hemp in off the fields — sort of threshing it by hand, to get the flowers and the buds off — and then putting it in plastic bags after it's dried.

It's an enormous operation. And the owners of that say the only way that you can make money, as they expect to do, is by having that vertical integration. They also have a processing facility to turn it into CBD and to bottle it.

What kind of numbers are we talking about for for money that that enticed people into this?

That is a really good question, because it's all over the place.

CBD is sold by the milligram, although there were reports of people making, you know, $100,000 off of 10 acres last summer.

There wasn't a lot of data, or reports that were corroborated, to know exactly how well people did. But certainly, by this spring — when it came time to start the seeds in greenhouses — there was a gold rush mentality where people were saying, "This is the way I might be able to turn my farm into something that actually pays for the first time in years."

Also, a lot of people moved in from states like Colorado, where they had been growing, and they had experience, because they expected to make a lot of money this fall.

So far, it's not clear who's going to make money. But the company that I visited in Hyde Park — it's called Sunsoil — they got a $7 million capital investment last fall. So clearly, somebody expects that there's gonna be money in this crop.