CBD Flower

Michigan seeks to cash in on CBD craze, but hemp harvest not without hiccups

LANSING — Topical cannabidiol creams are competing for shelf space at Kroger and Whole Foods. Wellness sprays are sold over the counter at Walgreens and other national pharmacies. And Family Video even sells CBD along with the DVD.

CBD has gone mainstream, and Michigan farmers are hoping to cash in on the craze this fall as they harvest the state’s first legal hemp.

While farmers say there have been growth problems during the initial growing season in Michigan, David Connor of Paw Paw Hemp expects to turn a profit on the 26 acres he and a business partner grow on a blueberry farm in southwest Michigan.

“When any type of crop is in the middle of harvest, that’s probably when you’re going to get the lowest price,” Connor said.

“But even at the lowest price point, it’s still better to be in hemp than corn this year.”

While there are plenty of warning signs, hemp could prove to be a bright spot in an otherwise bleak year for Michigan farmers battling heavy rains and falling prices that have prompted federal officials to declare disasters in five counties along the Indiana border.

Connor is one of 564 hemp farmers licensed to grow hemp this season under a Michigan Department of Agriculture and Rural Development pilot program. The state also licensed 423 processors and handlers to help bring the first crop to market.

Hemp is a strain of the cannabis sativa plant, but contains no more than traces of the psychoactive element of marijuana. It was shunned for decades because of its association with pot, but the federal government is in the process of establishing rules for commercial processing and production, allowed under a 2018 law.

Michigan is in a “unique position” to grow, process and manufacture industrial hemp, Gov. Gretchen Whitmer said in April as the state launched its pilot program while awaiting long-term federal rules.

“We are one of the most agriculturally diverse states in the country — we grow 300 different commodities commercially — which makes it a natural fit,” Whitmer said.

States are rapidly changing industrial hemp laws to reflect the changing landscape. At least six states approved laws in 2018 to create pilot hemp research or industrial hemp programs, while farmers in at least 34 states harvested about 500,000 acres this fall.

It hasn’t always been smooth sailing. Nationally, some experts say a “huge oversupply” of farmers planting what some are billing as a miracle crop will crash prices.

The first growing season in Michigan was also problematic for some farmers who did not plant their full crop or lost significant acreage as they experimented with soil quality, weed management, feeding schedules and harvesting techniques to grow the CBD strain flower that processors and manufacturers will make you want retail products.

“It’s all a learning process,” said hemp processor Casey Yossin, founder and CEO of Total Health Co. of Auburn Hills in Oakland County. “Everyone learns on the go.”

Connor and his business partner planned to plant 40 acres of hemp on their Paw Paw farm, but ended up planting only 26 acres this season due to what he called unforeseen “genetic challenges” with the crop.

Claims that hemp would “grow like a weed” turned out to be exaggerated, he said, describing problems with soil conservation and weed management. And harvesting, an ongoing process he expects to take 26 days, has proven to be “extremely labor-intensive.”

Connor said he and his partner use a daily crew of 22 harvest workers to prepare the product for shipment, and at least 10 others work in the fields.

The average grower will spend between $5,000 and $10,000 per acre in their fields this year, experts said Monday at a roundtable hosted by the Michigan Industrial Hemp Industry.

But farmers expect a return of between $10,000 and $12,000 per acre for the flowers of the plants used to create CBD oils sold as wellness products.

“It’s all about the supply chain,” said Yossin, who told reporters that plans are in the works to build a large hemp processing facility at an undisclosed location in mid-Michigan.

“If farmers can come in with a good processing group that actually has product costs, then you’ll be able to command a pretty good premium.”

CBD is commonly marketed as a health and wellness product. But like its cousin, marijuana, previous bans have hindered scientific research into its efficacy or risks. The US Food and Drug Administration has approved only one prescription drug for CBD, a product used to treat rare and severe forms of epilepsy, and warns of “unanswered questions about the science, safety and quality of products containing CBD.”

But Michael Tue, a medical assistant who founded Great Lakes Hemp Supplements and the Compassion Center in Traverse City, said he has seen CBD prove effective for treating migraines, arthritis and other ailments in residents of all ages.

“Awareness of CBD has grown rapidly,” Tue said. “I have been doing CBD research for the past nine years here in Michigan under the medical marijuana law. When I spoke eight years ago, no one knew what CBD was.”

In an online paper, Harvard University Medical School struck a middle ground, writing that some providers have come under scrutiny for “wild, indefensible claims like CBD is a cure-all for all cancers, which it is not. More research is needed, but CBD may prove to be an option for managing anxiety, insomnia, and chronic pain.

Michigan’s fledgling hemp industry remains a small part of the state’s agricultural portfolio. By comparison, Michigan farmers harvested 1.9 million acres of corn in 2018, according to the National Agricultural Statistics Service.

The state began licensing medical marijuana growers in July 2018, but limits for that crop are based on the total number of plants, not acres. There are currently 127 medical marijuana growers authorized to grow up to a total of 175,500 plants, according to state data. Michigan is set to begin licensing recreational marijuana businesses in November.

While most Michigan farmers are expected to sell flowers for CBD products for the first time, advocates say the hemp plant has multiple uses and could provide a secondary source of income for years to come.

The seeds can be used for food, animal feed, shampoos or paints. The stalks can be used to produce paper materials, clothing and other textile or construction materials.

“The whole plant has a revenue opportunity,” said Gary Shuler, founder and CEO of Grand Rapids-based GTF LLC. “This could change the lives of these farmers. And I’m even talking about the roots. There is value in this root material.”

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