Eric Simo was excited to harvest his first hemp crop after installing an indoor growing operation in Crothersville in 2019. The greenhouse contained a couple hundred plants grown primarily for their smokeable hemp flower.
But before the harvest could happen, state lawmakers passed a new regulation. Craft hemp flower – a product made legal in the 2018 Farm Bill that is by far the most profitable part of the plant – would now be illegal to manufacture or sell in Indiana.
The Indiana State Police pushed for the ban, arguing officers couldn’t distinguish between hemp flower and marijuana. Legal hemp includes less than 0.3% Delta-9 THC, the chemical that makes a user feel high, and doesn’t impair users like marijuana does.
For Simo, the new law turned what would have been a $200,000 smokeable flower crop into a $15,000 harvest used for CBD oil. In December, a pound of raw hemp plant with 10% CBD content sold for around $3. If that same crop contained craft hemp flower, the price skyrocketed to $395.
Today, smokeable hemp is still illegal in Indiana, but Hoosiers can order it from out of state and have it shipped right to their door. It’s easy to find at gas stations or smoke shops due to a lack of enforcement.
But if Simo, who has a license from the state to grow and sell hemp products, decided to manufacture the flower, his license would be revoked and he could face misdemeanor charges.
“Every day I send people away in my store because they want the flower,” said Simo, who owns a store in Columbus called Hempin. “And then they go three blocks down to my competitor and buy it.”
‘SHACKLES ON OUR FARMERS’ The prohibition on smokeable hemp is just one of many state regulations that has farmers across Indiana abandoning the industry in droves.
That’s evidenced by the number of permits issued by the Office of Indiana State Chemist. In 2020, the first year any farmer was allowed to grow hemp, 400 farmers received permits. That dropped to 133 in 2021. Today, less than 40 hold a permit, according to Justin Swanson, president of the Midwest Hemp Council.
The chemist office did not respond to emails and voice messages asking for current and historic data on the number of hemp permits issued or acreage being grown in Indiana.
Now, what many Indiana growers saw in 2019 as a major new cash crop to diversify their farms view hemp as a risky industry with paltry profits. That’s all because of state policy, argues Swanson.
“Everyone’s scratching their heads wondering why our hemp program isn’t taking off, because we are an ag state and we’re a logistics state,” he said. “It’s because we have these shackles on our farmers and small businesses.”
That includes forcing companies who produce CBD oil to dilute the product to ensure it stays below the 0.3% THC limit just to legally ship it to a processor. The processor then has to un-dilute it – a inefficient and time-consuming process.
Growers are banned from selling the raw hemp plant out of state and can only ship it to one of the handful of licensed processors in the state, which stifles competition and allows those companies to charge more, argued Swanson.
Farmers whose crops exceed the THC limit are forced to burn their fields. That happened to around 20% of the state’s entire hemp crop in 2020.
Simo said the only reason he’s staying in the industry is because of the large upfront investment he made to get his seed-to-product operation started. Now, he’s trying to make ends meet despite what he says are heavy-handed and inconsistent regulations.
That includes the state permitting the sale of Delta-8 and Delta-10 products, which contain THC compounds derived from hemp that can make a user feel high, while banning the raw hemp flower with less than 0.3% THC, Simo argued.
“We have people in the state who have invested their livelihood in this business,” he said. “And it just seems like at every step we try to go forward, the state and our governor continues to try to hamper and hurt us.”
‘WE SHRUG OUR SHOULDERS’ State lawmakers from both sides of the aisle have submitted bills every year since 2021 that would re-legalize hemp flower or soften other rules around the industry. Every year, those bills fail.
The most recent attempt came this year in the form of Senate Bill 293, which would have implemented a slew of new policies aimed at bolstering the state’s hemp industry while regulating who can buy and sell craft hemp flower.
The bill would have created testing and packaging requirements for the distribution and sale of hemp flower products, including banning it for anyone under 21. Right now, someone as young as 14 could buy Delta-8 or Delta-10 products.
Farmers would have been allowed to ship the raw hemp plants, known as CBD biomass, across state lines for processing under the bill. Companies could also ship hemp extract with more than 0.3% THC to a processor without first having to dilute it.
The legislation made it through committee and passed on its first reading, but did not get called up for a second reading last month, leading the bill to die. Still, that’s the furthest a major hemp bill has made it in the senate.
Republican Sen. Travis Holdman, who authored the bill with Sen. Kyle Walker, said the GOP caucus couldn’t find consensus on the bill following an opinion issued last month by Indiana Attorney General Todd Rokita on the legality of Delta-8 and Delta-10 derivatives.
The opinion says the compounds should be classified as Schedule 1 controlled substances under Indiana law, whether they are synthetic or in the hemp plant itself. Other Schedule 1 controlled substances include meth, heroin and ecstasy.
The U.S. Drug Enforcement Agency also issued an opinion letter last month saying lab-created substances used to synthetically derive Delta-8 and Delta-9 THC were also controlled substances and therefore illegal.
“Since it’s classified as a Schedule 1 drug under (Rokita’s) analysis of the federal legislation, and with what the DEA is saying, it put us in sort of a tough spot to try to bring this to fruition in the senate,” Holdman said.
It’s those kinds of opinions issued by prosecuting agencies that only muddy the waters on craft hemp flower, which Congress clearly made legal in the 2018 Farm Bill, argued Swanson with the Midwest Hemp Council.
“I think it’s just another manifestation of the DEA … doing their very best to frustrate the program and really trying to stifle it as much as they can,” he said.
Austin Rhodus, CEO and founder of Kokomo-based DREEM Nutrition, which makes CBD products, agrees. His business launched in 2019 and relied heavily on growing craft hemp flower. When lawmakers made that illegal, Rhodus was forced to overhaul his business model and move much of his operation out of state.
“I think some of our legislators have been very supportive and understand the impact on our farmers and the industry,” he said. “But I think overall, the state has been extremely restrictive and overbearing on something that has been deemed federally legal in the Farm Bill.”
Sen. Rodney Pol, a Democrat who co-authored SB 293, argued the legislation could have set up common-sense policies that made the rules clear for growers and sellers. Now, confusion and uncertainty remain in the industry due to some Republican legislators unwilling to take action.
Source:https://www.newsandtribune.com/news/hindering-hemp-indiana-growers-say-states-restrictive-rules-are-killing-industry/article_9b113a28-b9d9-11ed-a0d6-9f74674826c5.html
Categories: Indiana, Crops