The industrial hemp industry in the United States has seen major growth in the last few years, and with the passage of the 2018 Farm Bill, this industry is projected to continue to boom.  Now Alabama farmers, producers, universities, and processors have their first opportunity to take part in the expanding market for this agricultural commodity.

The Alabama Department of Agriculture and Industries (ADAI) is now accepting applications from potential industrial hemp growers and processors to participate in the Alabama Industrial Hemp Pilot Program.  The application period opened on January 22, 2019, and will close on February 22, 2019. 

What is the Alabama Industrial Hemp Pilot Program?

In 2014, the U.S. Legislature passed the Agricultural Act of 2014, often called the 2014 Farm Bill, which allowed institutions of higher education or a State department of agriculture to grow or cultivate industrial hemp for research purposes under an agricultural pilot program.  In 2016, the State of Alabama passed laws allowing for the Alabama Industrial Hemp Research Program, and in 2018, the ADAI adopted regulations which provide guidance for the implementation of the program.  Currently, to grow or process hemp in Alabama, a grower or processor must apply and be approved to participate in the Alabama Industrial Hemp Pilot Program.

The Agriculture Improvement Act of 2018, also known as the 2018 Farm Bill, defined industrial hemp as an agricultural commodity and removed it from the Controlled Substances Act.  Industrial hemp will now be regulated by the United States Department of Agriculture (USDA).  Notably, this new designation will give farmers protection under the Federal Crop Insurance Act which assists in crop losses.  This is an important detail for farmers who will be learning about and growing a “new” product.

The 2018 Farm Bill also allows a state to apply for primary regulatory authority over the production of hemp in that state.  For states that choose not to regulate the production of hemp, USDA regulations will apply.  Alabama intends to apply for primary regulatory authority over hemp production once the USDA finalizes its regulations and application process.  Until then, Alabama’s Industrial Hemp Pilot Program will operate under the 2014 Farm Bill.

What is industrial hemp?

The 2018 Farm Bill defines hemp as any part of the plant species Cannabis sativa L. with a delta-9 tetrahydrocannabinol (THC) concentration of not more than 0.3 percent.  Cannabis sativa L. is a plant species that has many subspecies and varieties, and some of those subspecies and varieties contain low levels of THC, making them hemp.  In the U.S. and in Alabama, “marijuana” is the plant Cannabis sativa L. that contains a concentration of more than 0.3 percent THC, and those subspecies and varieties of Cannabis sativa L. are not legal in the state of Alabama.

What are the uses for industrial hemp?

States that have already implemented industrial hemp research programs have learned that hemp produces three different types of crops: fiber, grain, and cannabidiol (CBD).  The three main harvestable components of hemp are the grain or seeds, which can be used for human food or future planting; the floral material, which is used for the extraction of plant resin for use in health and wellness products; and fiber and stalks, which can be used in clothing, construction materials, paper, plastic composites and more.

Why should farmers in Alabama be interested in industrial hemp?

In 2017, the hemp market generated over $820 million in sales in the U.S. and is expected to reach $1.9 billion by 2022.  Alabama is already a step ahead of its neighbors in Mississippi and Georgia since, unlike those states, it has already developed an Industrial Hemp Pilot Program under the 2014 Farm Bill.  Growers and processors in Alabama will have a market advantage over growers and processors in these other states since they can begin growing, processing, and establishing their businesses earlier.  For example, Kentucky is already reaping the benefits of its Industrial Hemp Pilot Program, which it began in 2014.  In 2017, $7.5 million was paid to Kentucky growers, 81 full-time jobs were created, and $16.7 million was generated in gross product sales.

What steps should an interested Alabama farmer take to get involved?

The first step any interested grower or processor should take before planning to grow or process industrial hemp is to clearly understand the laws and regulations, both federal and state, governing industrial hemp.  While the new laws have broadened the ability of farmers to grow this crop, it is still a highly regulated area from seed all the way to a finished product.  Failure to comply with the applicable rules and regulations could result in fines, rejection of applications to grow or process, or, in worst cases, criminal charges. 

The next step is to obtain the appropriate license from the Alabama Department of Agriculture and Industries.  The forms are available on the ADAI website.

Contact us to learn more and for advice on compliance with the current rules and regulations.