Industrial hemp looked like it might catch fire when production was legalized a few years ago. But it is little more than an ember today.
A supply glut in the CBD market and lack of production infrastructure in the biomass segment have stunted the growth of the promising crop.
“At one time we thought this industry had such good potential. Not to be a life-saver, but some potential,” said Gary Knecht of the Illinois Industrial Hemp Association. “It got crazy, with everyone jumping in.”
Unfortunately, the market has been slow to materialize, especially for processing of fiber and grain. And while demand for the cannabidiol segment has grown, a supply glut has kept prices down.
Illinois Valley Hemp has learned the harsh truths of supply and demand. The Mendota- based company produces hemp varieties designed to produce oil used as a pain reliever. The company decided not to plant any this year because there was still a good supply from the 2019 crop.
“The CBD marketplace is flooded with people like me who are out there trying to salvage their business,” said Kyle Rex of IVH. “Everyone has a brand and they’re comfortable with their brand. We’re trying to pull customers from these bigger, national brands.”
Rex and his partners, Eddie Diaz and Eric Stark, began their business with row-crop production in mind, in which hemp is grown for its grain and fiber. But the infrastructure has been slow to develop.
“That’s in our long-term goal,” Rex said. “It’s going to happen sooner or later, but I think it has to be at the local level.”
Knecht agrees. He believes mobile processors may be the answer, at least in the short term.
“The market’s not there,” he said. “Until we can get some kind of co-op formed to put some money up for a processing plant, the industry isn’t going anywhere.
“A mobile processing plant would be something to get started with, like the old days with the threshing machines. But once you get it processed, you still to have somewhere to sell it. That’s the problem I see.”
Meanwhile, research continues on the agronomic aspects of growing industrial hemp. Four universities have joined forces in a project called the Midwestern Hemp Database. The University of Illinois, Michigan State, the University of Wisconsin-Madison and Purdue University are coordinating with growers in their respective states.
“We’re trying to get an overall picture of what’s working across the region and what is not,” said Phillip Alberti, a University of Illinois Extension educator who is involved in the project.
Members of the consortium are taking a look at the three main forms of hemp used, including CBD oil, fiber and grain production. In some ways it may be compared to the early days of soybean production in the United States, when little agronomic knowledge was available and markets were not fully mature
“It’s really interesting to gather all new information. This collaboration is good example of that,” Alberti said. “These four universities came together not only to participate, but to create protocol.”
The universities are working with 130 growers in order to collect data on varieties, weed control, fertilization and other aspects of production. Alberti is involved with the cannabinoid portion of the study.
Throughout the growing season the farmers will submit samples to a laboratory in Wisconsin, which will be published onto a database. The data is random and anonymous.
“We’ll be able to track what variety you grow, where you got it and how it’s performing, for instance,” Alberti said.
Illinois Valley Hemp was originally formed for production of row-crop hemp producing fiber. But that market has not matured. Instead, Rex and his partners are learning the ins and outs of growing plants for CBD.
“Harvest was really something that I had severely underestimated, especially the labor-intensive nature of it,” Rex said. “You have to do a lot of it by hand. It’s overwhelming. You don’t have a big time frame and you don’t have the labor. That’s the challenge we had.”
Knecht is convinced there is a future for industrial hemp. He just isn’t sure when it will arrive.
“There isn’t enough unity right now in the industry,” he said. “We need more things in place and people need more experience with it.