Is industrial hemp now legal in Texas?
Not yet. The process by which guidelines will be determined for Texas hemp has just begun. This process will result in proposed guidelines for Texas involving application for a license, background check, fees, inspections, what plant parts must be tested for potential THC, and reporting. These guidelines will also address required destruction of hemp from the field, during processing, or its products if found to exceed the federally mandated maximum 0.3% THC. There is no recourse to this concentration requirement. The Texas Department of Agriculture (TDA) is tasked with developing guidelines, which must be approved by USDA. Texas A&M AgriLife held a June 12 conference call with TDA assistant commissioner Dan Hunter. He noted USDA has not yet issued their own guidelines, which states must follow, in order to develop Texas guidelines. In fact, Mr. Hunter said USDA will not even consider states’ guidelines until after USDA rules are released. Once released, we expect a required public comment period on the proposed USDA guidelines. This will further delay Texas and other states formulating final hemp guidelines and submitting to USDA for approval. The federal posting for public comment, however, will give TDA a head start on developing needed guidelines to satisfy federal requirements. Once the comment period concludes, USDA will release final guidelines. Then states can submit their own plans quickly. Producers and processors wanting a head start on seed delivery, raw materials for processing, etc. must wait until full regulatory approval is granted to Texas, regulations are in place and they become licensed. No, you can’t plant a small plot of hemp seed in 2019 (or possibly even early 2020) to see how it will do.
How long until hemp guidelines are issued for Texas and license applications can begin?
We currently do not know. Realistically, the establishment process will not be complete until 2020. Southern regions of Texas might not receive approval for timely hemp planting (we will have to figure out when that will be) by spring 2020 (February or March). Overall, there must be necessary parallel hemp market development in Texas. It may be more practical to view 2021 as a likely start of significant initial Texas hemp field production. Hemp production in greenhouses can likely start any time following licensing. So, if individuals find the permitting process runs slowly and they are not able to meet a targeted field planting schedule, then greenhouse CBD hemp might become the primary Texas hemp for 2020.
When/where will viable Texas commercial markets be developed for CBD oil, fiber and grain?
The answer is unknown. There are many individuals or business entities that have stated plans to engage as hemp buyers and processors. But these entities are not yet in operation. Some are developing plans for infrastructure, and a few have started. This ranges from renovations of a large former coffee facility in Houston to conversion of multi-acre greenhouse space in West Texas that will have adjacent processing facilities. TDA’s Miller warns that Texas could easily overproduce hemp in the first year or two of licensed production. Despite enthusiasm and interest, prospective Texas hemp growers must curtail plans to initiate hemp production until readily available markets are clearly defined. Otherwise, there could be significant grower losses of capital with no place to sell hemp raw materials. One hemp industry advisor offers prospective growers this caution: Be hesitant on any agreement to grow hemp unless you see physical facilities of your buyer in place.
What agronomic and per-acre yield potential information is available to prospective hemp farmers and processors?
Like financial and budgeting concerns, Texas A&M AgriLife is not yet able to project yield per acre of CBD oil, fiber or grain. We desire simple rules of thumb to enable us to estimate what a grower might expect in terms of CBD oil yield per acre or pounds of biomass and resulting fiber production. We are not yet comfortable with making estimates though some numbers from Colorado and Kentucky may prove helpful. A private New Mexico researcher (approximately 3,000 acres licensed in 2019 under provisions from the 2014 federal Farm Bill) suggests an individual hemp plant for CBD may produce 0.5-1 lb. of flowers, or 750-1,500 lbs. per acre if CBD is 15% in the floral structures. (How soon the flowers are processed may have an effect, though, as there is believed to be a loss of CBD oil with time.) We would like similar numbers to gauge the yield and potential value of fiber per acre. But simple calculations may also need to reflect the possible time of the biomass curing in the field. Is this possibly several months? The “rhetting” process allows time for degradation or rotting of softer non-essential components, but that may require moisture, hence it could be quite different depending on your Texas location. This would potentially add costs to your production if your land remains unavailable to plant another crop. Conversely, there is also baling of hemp for fiber, but how and when that is appropriate vs. field curing, we do not yet understand for Texas environments.
What is the status of potential crop insurance?
We have read the federal intent may be to view hemp as a program crop. We are not sure. Whether hemp is a potential program crop or not, federally approved or supported crop insurance normally requires a feasibility study, pilot test program, revisions, etc. before it is offered to the public, if at all. This would be several years away. A few private insurance policies on farm-scale hemp have been issued in Kansas. But the cost was high, in the range of several hundred dollars per acre.
Depending on the type of hemp grown, how soon would farmers expect payment for a CBD, fiber or grain crop?
We are not currently aware of the norm in states like Kentucky or Colorado. Due to different post-harvest requirements like storage, time to CBD extraction, curing of fiber, etc. we understand the commercial “sale” of hemp might not occur for months after harvest. Will farmers accept this when they are often accustomed to payment within a few days or at most 30 days after a crop is delivered? This would be a criterion to define in a legally binding production contract with a buyer/processor. We do not understand yet how quickly processing for CBD oil or fiber may occur after harvest, but it appears there can be a significant delay. Likewise, buyers/processors may find they will need to pay the producer prior to the sale of their processed hemp products. This may require their own bridge financing until sale to a wholesaler or end user occurs.
Does hemp truly require only one half the water of Texas cotton?
This comment is noted among several sources online. However, growers and irrigation personnel who work with hemp in nearby states suggest numbers for hemp water use do not support this claim. Hemp can readily use if not require over 2” of water per week. It has been documented that drought stress can cause physiological changes that increase THC levels above 0.3%, thus requiring crop destruction. It remains to be seen if hemp will be a viable dryland crop without irrigation in drier regions of Texas where rainfall is less than 25” a year and especially less than 20”/year. This is a potential area of initial hemp research for Texas A&M AgriLife.
What will Texas A&M AgriLife’s role be in the future of hemp farming and hemp processing in Texas?
Texas A&M AgriLife will not be involved in development or enforcement of regulatory processes for industrial hemp in Texas. As an agency, our employees will generally be required to follow the same regulatory guidelines as producers and processors for permitting, licensing, testing, etc.
The first task for AgriLife Extension will be to develop and provide a training program, in conjunction with TDA, to help hemp industry clientele, especially farmers, understand the regulatory requirements if they choose to try growing hemp. This training program could mirror the partnership between TDA and Texas A&M AgriLife for auxin herbicide trainings that are required for application of dicamba or 2,4-D herbicides specific to their respective herbicide tolerant cotton varieties.
Further AgriLife activity will include helping prospective producers evaluate the pros and cons— the benefits and risks—of hemp farming and if it is suitable relative to other cropping. This could include developing production budgeting templates to help initial hemp farmers estimate costs and revenue. Unfortunately, it will be uncertain how to populate these budgets with realistic numbers until hemp has been grown in Texas for at least two years.
Thirdly, with the leadership of Dr. Redmon, our state AgriLife hemp program coordinator, AgriLife is investigating potential partnerships and funding sources to initiate an agricultural research program on hemp. Hemp research will cost much more than other Texas crops. We do not know yet how this effort may be focused among CBD oil, fiber or grain. This initial effort may include the testing of genetic materials to ascertain suitability for Texas production environments, if they meet the requirements under Texas production conditions to maintain ≤0.3% THC, etc. Hemp production regulations are expected to require use of approved domestic certified genetic varieties (clones, feminized seeds, conventional seeds). This could include varieties certified by the Association of Seed Certifying Agencies (http://www.aosca.org). Texas A&M AgriLife may assist establishing a recommended or approved variety list as we review research conducted in other regional states in conjunction with our own research.