CCFB News» February 2019

Illinois Department of Agriculture (IDOA), at the end of 2018, announced its proposed rules for the production of industrial hemp. The rules were published in the Illinois Register and now have a 45-day comment period. The Cook County Farm Bureau has taken the changes that were published and posted the draft on the Cook County Farm Bureau website for member viewing.

This new law allows individuals or corporations licensed through IDOA to cultivate industrial hemp. IDOA will also register individuals or corporations that will process industrial hemp.  Jeff Cox, chief of the Bureau of Medical Plants at IDOA, said the state has been working intensely to post the rules since August when then-Governor Bruce Rauner signed the legislation that legalized the crop in the state.

As the 35^th state to legalize industrial hemp, there were plenty of examples Illinois could research when developing its state statute. In addition, the recently signed 2018 farm bill included requirements for states when it comes to regulation of industrial hemp and helped serve as a guide for the Illinois proposed rules.

The proposed rules would require a licensing application to be completed at least 90 days before cultivation. That license, once approved, would be good for three years. Operators also must complete a pre-planting report, and a harvest report, and be subject to at least one inspection each year.

“We don’t have any limits on licenses at this time,” Cox told the RFD Radio Network. “We don’t know how many applications to expect. We’ve had a lot of interest from the public over the last few months, calling about the licensing process. If everybody who called me were to apply for a license, we’d probably have 5,000 licenses this year. But I don’t know if we’ll have 50 or 5,000; it’s really hard to say at this point.”

David Williams, director of the University of Kentucky’s industrial hemp research program, recently spoke at the Illinois Specialty Crops, Agritourism and Organic Conference in Springfield. “The farm bill cleared up some issues in an industrial hemp section,” Williams noted hemp must be grown under an approved state program or a federal program yet to be developed by the USDA. By federal and state law, industrial hemp cannot contain more than 0.3 percent of tetrahydrocannabinol (THC) on a dry weight basis.

Industrial hemp crops “will be eligible for federal crop insurance. I don’t think that will be a problem with (hemp grown for) fiber and grain,” Williams said. But he questioned the crop insurance future of hemp grown for cannabidiol (CBD).

“The FDA probably intends to have regulatory oversight of cannabinoids,” the agronomy professor said. “We still don’t know the legality of cannabinoids as a commodity.”

In Illinois, much needs to be accomplished before farmers can receive mandated licenses to plant industrial hemp. The public comment period ends Feb. 11 for proposed license rules issued by the Illinois Department of Agriculture (IDOA).

IDOA staff will review the comments and may make changes to the proposed rules.

Then, the proposed rules will be published for a second notice for legislator members of the Joint Committee on Administrative Rules (JCAR). JCAR, which meets monthly, will have up to 45 days to consider the proposals. This period may include additional public input and a JCAR hearing.

Williams pointed out hemp grown for fiber is planted in early spring to produce a lot of biomass before it is harvested in late fall. Hemp is grown strictly for grain and dual-crop hemp for fiber and grain also are planted in the spring.

However, production licenses don’t resolve market questions. While Williams projected hemp fiber and grain crops “will be competitive with corn and soybeans,” he added cannabinoid economics are confusing and prices vary widely.

In 2017, licensed Kentucky hemp growers reported average prices of $1.70 per pound for grain, 34 cents per pound for fiber, and $7.20 per pound for flowers/buds for CBD, according to Williams.

For the 2019 growing season, 1,075 Kentucky growers have applied for licenses for 45,250-plus acres. Of those growers, 1,009 seek to harvest flowers, 330 for fiber (including dual-purpose crop), and 248 for grain (including dual-purpose). About 40 new hemp processors have applied for Kentucky licenses.

Williams raised concerns about potential U.S. farm production outstripping hemp demand given that global production was a record 330,000 acres, including Canadian and European Union farmland, based on USDA National Agricultural Statistics Service data.

“That (hemp economic) bubble is going to burst,” Williams said of some high flower prices. “It has to ... In 20 years, why haven’t the fiber and grain hemp markets in the world taken off?”

This article is written from excerpts from IDOA, Cook County Farm Bureau, and Illinois Farm Bureau FarmWeek articles.