Editor’s note: This is an installment in an ongoing series on industrial hemp production. In this issue we look at the market and agronomic aspects of CBD production.
For those involved in the burgeoning CBD market, opportunity abounds. So does uncertainty.
“It’s the wild West,” said Stuart Herman with the Chicago-based distributor CBD Apothecary. “But it’s getting better. This first year was crazy.”
Growers of hemp plants that produce non-narcotic CBD oil were forced to deal with excessive rainfall, competition, pests and other issues while learning to grow the plants efficiently without an instruction book.
Meanwhile, as popularity explodes, many wonder how long the high will last.
“I think it’s going to crescendo and that bubble is going to pop,” Herman said. “I think the demand outstrips the supply, because everyone wants to try it. But there is such a flood on the market and not everyone should be in it.”
Andy Houston knows a little about production. He and his brother, Frank, grew plants on 17 acres near Roseville, Illinois, in Warren County this year. They harvested 22,000 pounds of buds from which oil will be extracted. He agrees with Herman.
“I’m sure the bubble will burst,” he said. “It’s going to happen. It does with everything like this.”
Houston and others believe the market for CBD will change in three to five years. Meanwhile, regulations are on the way. The federal Food and Drug Administration is in the midst of a comment period regarding rules on quality. A limit of 0.3% THC level — the substance that provides a high in marijuana — is in place, but there is legal wiggle room.
In Illinois, a proposed bill would require that all CBD products sold within the state meet testing requirements developed by the state Department of Agriculture.
The legalization of hemp production has been a long time coming for Gary Knecht and a group of fellow farmers in the Edwardsville area near St. Louis. They recently disbanded the non-profit group Omni Ventures, which for 20 years worked on fiber crops, including kenaf.
The farmers have regrouped under an umbrella effort to conduct research and promote industrial hemp, a cousin to marijuana prized for its many uses. He sees the CBD craze more as a bridge to industrial hemp production.
“Everybody has jumped into that CBD oil,” Knecht said. “We think that market’s going to be saturated in three or four years.”
Omni Ventures would likely have been in the forefront of the hemp industry, but the group and others who have long promoted the plant were forced to let history catch up with them.
“I wish 20 years ago we had support like what’s out there now,” Knecht said. “Not that we had a crystal ball or knew more than anybody else, but we’d have a nice industry built right now.”
One concern among CBD oil distributors is the lack of quality standards. The product can be found virtually everywhere, even in convenience stores.
“The way to determine quality is through independent labs,” Herman said. “What is the best CBD? That’s up in the air. For the most part, a good-quality crop would have anywhere from 10 to 15% CBD in the actual plant itself. Right now the only standards to check against it is independent labs. There has been some dispute that some of these labs were paid off. But I think they’re pretty legitimate.
“Right now the problem that is in the industry is processing. There are a lot of guys with a lot of product out there, but there are limited people to process it. So the stuff’s rotting in the field, and they’re getting awful prices for it.”
Processing plants are few and far between, with only two in Illinois — one in the south and one in the north. Herman said one solution may be an on-site processing facility that moves from county to county. Regardless, he sees the cream rising to the top, as growers learn from the first year or production.
“There is going to be some shakeout this year because it’s not as easy as some people thought it was going to be,” Herman said. “There’s going to be big uptick.”
Houston, who grows and does some processing, believes the market will expand when the FDA relaxes its rules.
“Right now all the FDA is allowing to go into CBD products is tinctures and vape pens. No gummies or anything,” he said. “Tincture falls under guidelines of herbal supplements. It’s not heavily regulated. But when FDA gets involved, you’ll have bottled water companies, Coca-Cola, etc., with CBDs added to the product.”
Agronomically, his big takeaway from the initial production year is with irrigation.
“We learned that irrigation in Illinois is definitely not required,” he said. “We did a comparison.”