The coronavirus crisis has changed legal cannabis in fundamental ways that have yet to fully manifest.
One head-scratcher that seems to remain etched in stone is the industry’s long-standing status as basically a cash business.
And now, with several legislative initiatives catapulting to the head of the Congressional priority line (additional coronavirus stimulus packages), it seems like 2020 will be another year of the same for plant-touching entities.
I hope, dear reader, that the irony of this situation — where legal cannabis has been overwhelmingly deemed essential to the day-to-day function of this country — is not lost on you. It certainly isn’t lost on industry participants tired of being treated like second-class businesses.
“It truly is ironic — and ultimately hypercritical — that cannabis can be deemed essential and yet these businesses do not have the same financial avenues that almost every other industry does,” InfiniteCAL Co-founder/CEO Josh Swider says. “Beyond that, many people are now dependent on the legal cannabis supply chain to get medicinal products. The fact is the legal cannabis industry is an important piece of our overall economy that cannot be forgotten.”
Swider, who along with fellow chemist and Co-founder David Marelius heads up the executive team at the San Diego, CA-based analytical cannabis testing lab, reached out to discuss what he saw as glaring inequities being forced upon legal cannabis business operators.
“The cannabis industry employs more than 240,000 people, roughly the size of the entire solar industry, and five times the size of the coal mining industry,” he says. “Billions of dollars are being generated for state tax agencies around the U.S. from legal cannabis, and workers are paying their fair share of employment income tax to the federal government. Yet, these financial programs and institutions leave out the plant-touching cannabis industry due to an outdated federal stance that most Americans disagree with.”
As far as advice on how growers can react and adjust to the coronavirus crisis specifically, Swider likes what he’s witnessed from his industry cohorts thus far.
“Companies are scaling back operations to meet demand, avoiding over scaling, and focusing on profitability,” he says. “And I believe this is the right plan of action to take.”
In the short term, perhaps some relief for cannabis business operators — who have admirably remained operable amidst the worst public health crisis of many of our lifetimes — is in order?
Maybe legislators can get creative with some payroll or state cannabis program tax payments so these legally operating business owners can have some assistance as well?
From where I sit, it doesn’t seem like that’s asking a whole lot …
Florida’s 2020 Hemp Pilot Program Takes Interesting Stand on Genetics
Florida’s statewide hemp pilot program released its 2020 grow season rules and regulations late last month, and the state’s Department of Agriculture and Consumer Services is now accepting grower applications under the new mandate.
Many of the rules are similar to programs already established in other states:
- 0.3% THC or less remains the standard for the crop to be considered legal industrial hemp under the pilot program.
- Growers must submit information for background tests and fingerprinting. Farmers may not have a felony drug conviction within the last 10 years on their record to be approved.
- Year round, outdoor cultivation is approved under the mandate. Indoor and greenhouse are also viable production settings.
One of the passages in Florida’s new program that should immediately grab hemp growers’ attention is a mandate that growers must produce hemp with “seed certified by a certifying agency or….seed approved by a university or institution conducting an Industrial Hemp Pilot Program.”
Furthermore, the state defines “certified seed” as “a class of hemp seed, which is the progeny of breeder, foundation, or registered hemp seed certified by an agent of the Association of Official Seed Certifying Agencies (AOSCA).”
Well, as AOSCA’s longtime director Chet Boruff explained just a couple months ago, currently AOSCA-certified seeds do not exist in the wider commercial hemp genetics marketplace. So, for the 2020 growing season, Florida hemp growers operating under the pilot program mandate will likely be using seed approved under a pilot certification project by an in-state university or institution.
“Those AOSCA standards for agricultural-certified seed are, as you know, quite vigorous. They requires multiple generations produced in the field under replicated conditions, and there’s a lot of development work, data collection and analysis that must occur before a variety becomes certified,” says David Hasenauer, a member of Florida’s Hemp Advisory Committee. “Because of how new the hemp industry is here in the U.S., we haven’t had the time to accomplish those certifications yet.”
For the 2020 grow season, hemp seed approved under the Florida university or pilot project mandate will reportedly be held to the same American Seed Trade Association (ASTA) standards that new, fast-tracked ornamental varieties are approved under and released to commercial growers prior to achieving full AOSCA-certified status, according to Hasenauer. For 2020, those seeds will be produced under a certified hemp seed breeding program at Florida International University (FIU) and will likely be distributed to growers via two as-yet-identified groups approved within the pilot program.
“That requirement will naturally sunset in 2021 once we have some of those AOSCA-certified varieties available to our growers. “It’s just to kick start the program and get us through the growing season,” Hasenauer says, noting that germination rate, inert matter content, and many of the common metrics displayed on agricultural commodity seed labels will be among the data considered by ASTA.
“We’re just using the pilot projects as a feeder pipeline for this season, long term that AOSCA certification is the goal for all seeds used to produce hemp under that pilot program,” he says. “Farmers want people to honor their word, and when they don’t get their fair shake from their genetics providers it puts a bad taste in everyone’s mouths.”
COVID-19 has also put a bad taste in farmers’ mouths in the Sunshine State. Hasenauer had anticipated about 30,000-plus acres of hemp planted in 2020 under the pilot program, but now he’s expecting that number to come in around the 15,000-acre mark.
“We differentiate between acres licensed and acres actually planted and harvested, since there can be discrepancies,” he adds. “We expect about 15,000 acres licensed, maybe around 10,000 acres of hemp will actually be planted, and then probably in the ballpark of about 7,000 acres harvested in 2020.”
Besides his seat on the Florida Hemp Council, Hasenauer is a former U.S. Army infantryman and the current CEO of Fort Lauderdale-based Green Point Research. Green Point describes itself as “a vertically integrated biotechnology company focused on phytocannabinoid-rich biomass origination.”
For 2020, Green Point will be providing some genetics to the Florida market, as well as undertaking field research pilots on different planting densities and rates, how hemp fits into various agronomic crop rotations, and what Hasenauer calls a “proprietary retuning process where you potentially get two crops from one plant.”
Hopefully we’ll hear more from Hasenauer about that intriguing research project as the group makes progress. We’ve also reached out to Boruff at AOSCA for some clarity on how this will work in Florida. We’ll have an update for you if/when we hear back from AOSCA.
USDA Announces Hemp Should be Treated as “Any Other Commodity Crop”
And lastly, in a memo discussing new guidelines for hemp producers to apply for and secure federal operating loans, USDA issued lender guidance that has been sorely needed across the ag industry as a whole since the rollout of domestic hemp production post-2018 Farm Bill.
“Hemp will be considered like any other borrower-produced commodity, if the hemp was produced under a license authorized by the 2014 or 2018 farm bills and provided the crop is not abandoned or destroyed,” the memo advises.
This new guidance confirms the availability of federal loan programs for hemp businesses for the 2020 growing season, and basically instructs lending institutions to evaluate applications for funds from hemp growers in the same fashion as if it were a corn or wheat grower in Iowa applying for the funds.
The guidance also notes that USDA’s Farm Service Agency (FSA) will not issue direct loan funds to cover the cost of “hot hemp” (i.e., more than 0.3% THC) disposal, and if a lender chooses to issue an advance of funds to a borrower to cover the cost of any guaranteed loan loss claim (i.e., to make up for lost revenue due to crop going hot and having to be destroyed) it will not be covered under FSA policy.
Cannabis News: More Coronavirus Reactions, Hemp Seed and Banking News (OPINION)