Michigan seeks to cash in on CBD craze, but hemp harvest not without hiccups

Hemp products

LANSING — Topical cannabidiol creams are competing for shelf space at Kroger and Whole Foods. Wellness sprays are sold over the counter in Walgreens and other national pharmacies. And Family Video is even selling CBD next to DVDs.

CBD has gone mainstream, and Michigan farmers hope to cash in on the craze this fall as they harvest the state’s first-ever legal hemp crops.

While farmers say there were growing pains during Michigan’s inaugural grow, David Conner of Paw Paw Hemp is expecting to turn a profit on 26 acres he and a business partner are growing on a southwest Michigan blueberry farm.

“When any type of crop is in the middle of harvest, that’s probably when you’re going to get the lowest price point,” Conner said. 

“But even at the lowest price point, it’s still better this year for us to be in hemp than corn.”

Although there are plenty of warning signs, hemp could turn out to be a bright spot in an otherwise dreary year for Michigan farmers, who have contended with heavy rains and plunging prices that prompted federal authorities to declare disasters in five counties along the Indiana border.

Conner is one of 564 hemp farmers licensed to grow hemp this season under a pilot program by the Michigan Department of Agriculture and Rural Development. The state also licensed 423 processors and handlers to help bring the inaugural crop to market.

Hemp is a strain of the cannabis sativa plant but contains no more than trace amounts of the psychoactive element of marijuana. It had been shunned for decades because of its relationship to pot, but the federal government is in the process of establishing rules for commercial processing and production allowed under a 2018 law.

Michigan is “uniquely positioned” to grow, process and manufacture industrial hemp, Gov. Gretchen Whitmer said in April as the state launched its pilot program while waiting for long-term federal rules. 

“We are one of the nation’s most agriculturally diverse states — growing 300 different commodities on a commercial basis — making it a natural fit,” Whitmer said.

States are quickly changing industrial hemp laws to reflect the changing landscape. At  least six states approved laws in 2018 to create hemp research or industrial hemp pilot programs, while farmers in at least 34 states harvested some 500,000 acres this fall. 

It hasn’t always gone smoothly. Nationwide, some experts say a “massive oversupply” of farmers planting what some billed as a miracle crop will plunge prices. 

Michigan’s first growing season also was problematic for some farmers who didn’t plant their full crop or lost significant acreage because they were experimenting with soil quality, weed maintenance, feeding schedules and harvest techniques to grow the kind of CBD flower that processors and manufacturers will want for retail products. 

“It’s all a learning process,” said hemp processor Casey Yosin, founder and CEO of Total Health Co. of Auburn Hills in Oakland County. “Everybody is kind of learning on the fly.” 

Conner and his business partner had planned to plant 40 acres of hemp on their Paw Paw farm but ended up planting just 26 acres this season because of what he called unforeseen “genetic challenges” with the crop. 

Claims that hemp would “grow like a weed” proved to be exaggerations, he said, describing hiccups with soil conservation and weed management. And harvesting the crop, an ongoing process he anticipates will take 26 days, proved “extremely labor intensive.” 

Conner said he and his partner are using a daily harvest crew of 22 workers to prepare the product for shipping and at least 10 others working the field.

The average grower will spend between $5,000 to $10,000 per acre on their fields this year, experts said Monday in a roundtable organized by the Industrial Hemp Industry of Michigan. 

But farmers are anticipating returns of between $10,000 to $12,000 an acre for the plant flowers used to create CBD oils marketed as wellness products. 

“It’s all about the supply chain,” said Yosin, who told reporters plans are in the works to build a major hemp processing facility at an undisclosed location in mid-Michigan. 

“If farmers can get in with a good processing group that actually has outlays for the product, then you’ll be able to demand a pretty good premium.” 

CBD is typically sold as a health and wellness product. But like its cousin, marijuana, former prohibitions have stymied scholarly research into its efficacy or risks.  The U.S. Food and Drug Administration has approved only one CBD prescription drug, a product used to treat rare and severe forms of epilepsy, and warns of “unanswered questions about the science, safety, and quality of products containing CBD.”

But Michael Thue, a certified medical assistant who founded Great Lakes Hemp Supplements and the Center for Compassion in Traverse City, said he’s seen CBD prove effective for treating migraines, arthritis and other ailments in residents of all ages. 

“CBD has rapidly grown in awareness,” Thue said. “I’ve been doing CBD research for the last nine years here in Michigan under the medical marijuana law. When I would speak eight years ago, nobody knew what CBD was.”

In an online paper, Harvard University Medical School struck middle ground, writing that some providers have come under scrutiny for “wild, indefensible claims, such that CBD is a cure-all for cancer, which it is not. We need more research but CBD may be prove to be an option for managing anxiety, insomnia, and chronic pain.”

Michigan’s fledgling hemp industry remains a tiny fraction of the state’s agricultural portfolio. By comparison, Michigan farmers harvested 1.9 million acres of corn in 2018, according to the National Agricultural Statistics Service. 

The state began licensing medical marijuana growers in July 2018, but limits for that crop are based on total plants, not acres. There are currently 127 medical marijuana growers authorized to cultivate up to a combined 175,500 plants, according to state data. Michigan is set to begin licensing recreational marijuana businesses in November.

While most first-time Michigan farmers are expected to sell flowers for CBD products, advocates say the hemp plant has multiple uses and that could provide a secondary revenue source in future years. 

The seeds could be used for foods, animal feeds, shampoos or paints. The stalks can be used to make paper materials, clothing and other textiles or building materials. 

“The entire plant has a revenue opportunity,” said Gary Schuler, founder and chief executive officer of GTF LLC based in Grand Rapids. “This could be life-changing for those farmers. And I’m talking about even the roots. There’s value in that root material."

Hemp plastic

Gary Schuler of GTF LLC shows off plastic made with hemp his firm used to make a prototype water bottle. (Bridge photo by Jonathan Oosting)

Schuler’s firm is working with another West Michigan company on new technology to dry and pulverize hemp and other plant-based materials into smaller forms that could be used in a variety of applications. 

Tiny hemp particles can be used to replace polypropylene in plastics, creating a less carbon-intensive version of the product that does not rely on petroleum-based fossil fuels, he said. “Just think about the environmental impact of that.”

Schuler and his partners have already worked to create a water bottle prototype made from the clean plastic that is antimicrobial and won’t melt at high temperatures.

While farmers are completing their first legal harvest, Michigan is in the process of sending license renewal notices for its pilot program, which could continue for a second growing season if the federal government hasn’t finalized national rules by the spring.

Michigan will likely need to update state law once those federal rules are announced, and it will be required to submit a commercial hemp plan to the U.S. Department of Agriculture for review, said Gina Allessandri, industrial hemp program director for the Michigan Department of Agriculture and Rural Development. 

In the meantime, farmers can still apply for year two of the pilot. 

“We have not restricted the number of participants or the amount of acreage,” Allessandri said. “We wanted to let as many people in and learn as were interested. We didn’t want to restrict anybody from it.”

Like what you’re reading in Bridge? Please consider a donation to support our work!

We are a nonprofit Michigan news site focused on issues that impact all citizens. In an era of click bait and biased news, we focus on taking the time to learn both sides of a story before we post it. Bridge stories are always free, but our work costs money. If our journalism helps you understand and love Michigan more, please consider supporting our work. It takes just a moment to donate here.

Pay with VISA Pay with MasterCard Pay with American Express Donate now

Comment Form

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Comments

Rosemary Edgar
Mon, 10/07/2019 - 9:34pm

Widespread hemp cultivation in Michigan may become an enormous problem for growers of medical and recreational marijuana. Cannabis is a wind pollinated plant. Imagine a hemp field next to a medical marijuana grow. Pollination of the medical crop by hemp may destroy or highly degrade the quality and quantity of that medical crop.

Jonathan Oosting
Tue, 10/08/2019 - 5:00pm

Interesting, thank you. I had not heard or considered that. 

middle of the mit
Tue, 10/08/2019 - 8:22pm

You should at least not consider it.

All cannabis medical or otherwise, will be grown indoors. If for no other reason than safety. Let alone bugs and disease. It is far too valuable to be left in fields.

Not to mention that grown in a field, you will get one MAJOR crop per year. Inside? As much as you can fit you can grow and it only takes 4 months to grow a crop to completion.

Fields? That is for hemp.

middle of the mit
Tue, 10/08/2019 - 10:17pm

Not to mention the fact that NO grower wants their female plants pollinated!

That means seeds, more volume, but customers get mad and the price goes down. They want sensimillia. That is cannabis flowers without seeds.

This person doesn't know what they are talking about and doing what Matt doesn't like, spreading crap without any proof.

Where is my proof?

Common sense work for ya?

middle of the mit
Wed, 10/09/2019 - 3:52am

This is not to mention that law states that all medical and recreational has to be grown in a controlled environment.

Forgot that important detail.

Anonymous
Tue, 10/08/2019 - 5:39pm

I think that may be why the majority of recreational marijuana is grown inside.

Jim Vanbeaver
Tue, 10/08/2019 - 8:09am

Watch as the vape stores suddenly become CBD boutiques, and the cycle repeats.

middle of the mit
Tue, 10/08/2019 - 8:26pm

The only problem I have heard from CBD or cannabis is through vaping.

No vaping you are left with oils.

Do you have proof that oils or smoking joints hurts you enough for teenagers to die from?

middle of the mit
Tue, 10/08/2019 - 8:45pm

[[“When any type of crop is in the middle of harvest, that’s probably when you’re going to get the lowest price point,” Conner said.

“But even at the lowest price point, it’s still better this year for us to be in hemp than corn.”]]

But supply and demand says you have to have a product before you can get a price point. And even then, your price is should be lowest when you have the most product. Depending on your demand. How can have a price before you have a product?

[[Conner is one of 564 hemp farmers licensed to grow hemp this season under a pilot program by the Michigan Department of Agriculture and Rural Development. The state also licensed 423 processors and handlers to help bring the inaugural crop to market.]]

Inaugural product? https://news.medicalmarijuanainc.com/history-hemp-america/

[[Long before the cultivation of hemp was criminalized in the United States, the versatile and sustainable crop played a major role in the building of a new nation. One of the oldest plants to be cultivated by human civilization, hemp is a sustainable crop grown for food, oil, and fiber.

Congress passed a law in 1841 that ordered the Navy to purchase hemp from domestic farmers.

Throughout the 20th century, individual states and the U.S. federal government began to criminalize all cannabis. Because of hemp’s familial relationship to marijuana and a lack of understanding about the plants’ differences, laws were implemented restricting or prohibiting all cannabis growth.

Domestic hemp’s dominance in the U.S. took a significant downturn in 1937 when, in an effort to regulate the intoxicating varieties of cannabis, the U.S. government passed the Marijuana Tax Act. While the law didn’t prohibit the growing of hemp, it did turn over the regulation of licensing hemp production to the Department of Revenue and added a $100 transfer tax on sales that significantly hindered domestic farmers.

With the United States entering World War II in 1941, the nation’s hemp cultivation efforts were resurrected. Japan cut off supplies of hemp from the Philippines, forcing the U.S. to turn to its own farmers for hemp production.

Between 1942 and 1946, American farmers from Wisconsin to Kentucky produced 42,000 tons of hemp fiber annually.

In 2004, the 9th Circuit Court of Appeals ruled that the Drug Enforcement Administration did not have the authority to regulate these specific parts of hemp under the Controlled Substances Act. Hemp could therefore still be imported and those parts of the plant used for products.

After nearly a century of prohibition on the cultivation of hemp, the versatile plant is starting to again take root in America. With the passing of the 2014 Farm Bill, which featured Section 7606, states became allowed to implement laws allowing state departments of agriculture and universities to grow hemp for research or pilot programs.]]

[[It hasn’t always gone smoothly. Nationwide, some experts say a “massive oversupply” of farmers planting what some billed as a miracle crop will plunge prices. ]]

LOOK! Supply and demand in action!

Matt! LOOK at this!

[[CBD is typically sold as a health and wellness product. But like its cousin, marijuana, former prohibitions have stymied scholarly research into its efficacy or risks. The U.S. Food and Drug Administration has approved only one CBD prescription drug, a product used to treat rare and severe forms of epilepsy, and warns of “unanswered questions about the science, safety, and quality of products containing CBD.”]]